Dow jumped up 80, advancers slightly ahead of decliners & NAZ added 47. The MLP index was little changed in the 301s. Junk bond funds inched higher & Treasuries were sold again. Oil went up in the 65s & gold dropped another 13 to 1349.
AMJ (Alerian MLP Index tracking fund)
The $ resumed its march to the worst week in 10 months, with tepid US growth last qtr adding to pressure on the greenback. Stocks pushed to records as earnings continue to top estimates. The greenback fell to a 3-year low, wiping out the boost from Pres Trump's endorsement of a strong currency, as investors seek higher returns abroad. The latest example was UK data showing a faster-than-expected gain, boosting the £. Treasuries pared losses after American growth slowed to 2.6% last qtr. The € & ¥ gained. West Texas crude oil traded near $65 a barrel. The S&P 500 headed for its 5th rise in 6 days, getting a boost from technology shares & European stocks climbed. The greenback has been under pressure this week as the US stepped up protectionist measures & Treasury Secretary Steve Mnuchin said a weak $ was good for American trade. Mnuchin said his comments weren't meant to intervene in the market & a strong currency would be a sign of the US economy's success, echoing Trump's strong-$ comments. Trump told an audience at Davos trade must be “fair” & reciprocal.
The US economy expanded at a slower-than-projected pace in Q4 on drags from trade & inventories, offsetting strength in consumer spending & business investment that signals solid momentum entering 2018. GDP rose at a 2.6% annualized rate after 3.2% in the prior period, Commerce Dept data showed. The forecast called for 3%. Consumer spending, the biggest part of the economy, rose 3.8%, the best in more than a year & business equipment investment grew at the fastest pace in 3 years. While the report dashed expectations for the longest streak of 3%-or-better growth since 2005, a key measure of underlying demand delivered the strongest performance since 2014 & inflation picked up, which will help keep the Federal Reserve on track to raise interest rates in coming months. Pres Trump's move to cut taxes may give the economy an additional boost in 2018, though reaching his goal of sustained 3% GDP growth will prove challenging, in part because household purchases are projected to cool. Weak productivity & slow labor-force expansion will also pose hurdles in the longer term, & higher borrowing costs could crimp gains as well. GDP was dragged down mainly because the trade deficit widened, as imports rose at double the pace of exports. Net exports subtracted 1.13 percentage points from GDP growth, the most in a year. A change in inventories subtracted 0.67 percentage point, the most since early 2017. For a better sense of underlying domestic demand, economists look at final sales to domestic purchasers, which strip out inventories & trade, the 2 most volatile components of GDP. Such sales grew 4.3% last qtr, the most since 2014, after a 1.9% increase. For the full year, GDP, the value of all goods & services produced, grew 2.5% in Q4 from a year earlier. On that basis, it was the strongest annual performance since 2014's 2.7%. The expansion is now in its 9th year & is poised to become the country's 2nd-longest on record later in 2018.
U.S. GDP Grows Below-Forecast 2.6% on Trade, Inventory Drags
Pres Trump said that US economic growth promoted by his policies would help the world, seeking to square his “America First” agenda with globalism. “When the United States grows, so does the world,” Trump said in a speech in Davos. “American prosperity has created countless jobs around the globe and the drive for excellence, creativity and innovation in the United States has led to important discoveries that help people everywhere live more prosperous and healthier lives.” Trump is the first US pres to visit the conference in 18 years & he made his gov's presence felt with a large delegation of Cabinet secretaries & top White House aides. His plenary address, though, was largely boilerplate. Trump boasted of US economic performance under his leadership & urged cooperation with the American effort to curb North Korea's nuclear & missile weapons programs & combat terrorism -- routine themes of his speeches, especially to intl audiences. He told the audience that the US still supports free trade as long as it is “fair and reciprocal.” “The United States is prepared to negotiate mutually beneficial, bilateral trade agreements with all countries,” he said. But he then suggested an exception for Pacific Rim countries that were part of the Trans-Pacific Partnership he abandoned last year. The US already has trade agreements with some of those 11 countries, he added, & “we would consider negotiating with the rest, either individually or perhaps as a group, if it is in the interests of all.” After taking questions, Trump left Davos. He faces a number of domestic challenges back home, difficult negotiations with Congress on an immigration overhaul & new reports that he sought last year to fire the special counsel investigating.
Trump Tells Davos ‘America First’ Will Benefit the World
The stock market keeps humming along with the buyers in command. Market breadth was modest, but earnings reports are generally getting positive reviews which encourages buying. There will be 2 more revisions for GDP in Feb & Mar. Gold was down for a 2nd day. Some of that selling has to come from disappointed investors who had been making negative bets on the stock market. The bulls are thinking about taking the Dow to 27K, the next milestone which is only 525 away.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 65.82 | +0.31 | +0.5% |
| GC=F | Gold | 1,352.00 | -10.90 | -0.8% |
The $ resumed its march to the worst week in 10 months, with tepid US growth last qtr adding to pressure on the greenback. Stocks pushed to records as earnings continue to top estimates. The greenback fell to a 3-year low, wiping out the boost from Pres Trump's endorsement of a strong currency, as investors seek higher returns abroad. The latest example was UK data showing a faster-than-expected gain, boosting the £. Treasuries pared losses after American growth slowed to 2.6% last qtr. The € & ¥ gained. West Texas crude oil traded near $65 a barrel. The S&P 500 headed for its 5th rise in 6 days, getting a boost from technology shares & European stocks climbed. The greenback has been under pressure this week as the US stepped up protectionist measures & Treasury Secretary Steve Mnuchin said a weak $ was good for American trade. Mnuchin said his comments weren't meant to intervene in the market & a strong currency would be a sign of the US economy's success, echoing Trump's strong-$ comments. Trump told an audience at Davos trade must be “fair” & reciprocal.
Dollar Stays Lower After GDP, Trump; Stocks Gain: Markets Wrap
The US economy expanded at a slower-than-projected pace in Q4 on drags from trade & inventories, offsetting strength in consumer spending & business investment that signals solid momentum entering 2018. GDP rose at a 2.6% annualized rate after 3.2% in the prior period, Commerce Dept data showed. The forecast called for 3%. Consumer spending, the biggest part of the economy, rose 3.8%, the best in more than a year & business equipment investment grew at the fastest pace in 3 years. While the report dashed expectations for the longest streak of 3%-or-better growth since 2005, a key measure of underlying demand delivered the strongest performance since 2014 & inflation picked up, which will help keep the Federal Reserve on track to raise interest rates in coming months. Pres Trump's move to cut taxes may give the economy an additional boost in 2018, though reaching his goal of sustained 3% GDP growth will prove challenging, in part because household purchases are projected to cool. Weak productivity & slow labor-force expansion will also pose hurdles in the longer term, & higher borrowing costs could crimp gains as well. GDP was dragged down mainly because the trade deficit widened, as imports rose at double the pace of exports. Net exports subtracted 1.13 percentage points from GDP growth, the most in a year. A change in inventories subtracted 0.67 percentage point, the most since early 2017. For a better sense of underlying domestic demand, economists look at final sales to domestic purchasers, which strip out inventories & trade, the 2 most volatile components of GDP. Such sales grew 4.3% last qtr, the most since 2014, after a 1.9% increase. For the full year, GDP, the value of all goods & services produced, grew 2.5% in Q4 from a year earlier. On that basis, it was the strongest annual performance since 2014's 2.7%. The expansion is now in its 9th year & is poised to become the country's 2nd-longest on record later in 2018.
U.S. GDP Grows Below-Forecast 2.6% on Trade, Inventory Drags
Pres Trump said that US economic growth promoted by his policies would help the world, seeking to square his “America First” agenda with globalism. “When the United States grows, so does the world,” Trump said in a speech in Davos. “American prosperity has created countless jobs around the globe and the drive for excellence, creativity and innovation in the United States has led to important discoveries that help people everywhere live more prosperous and healthier lives.” Trump is the first US pres to visit the conference in 18 years & he made his gov's presence felt with a large delegation of Cabinet secretaries & top White House aides. His plenary address, though, was largely boilerplate. Trump boasted of US economic performance under his leadership & urged cooperation with the American effort to curb North Korea's nuclear & missile weapons programs & combat terrorism -- routine themes of his speeches, especially to intl audiences. He told the audience that the US still supports free trade as long as it is “fair and reciprocal.” “The United States is prepared to negotiate mutually beneficial, bilateral trade agreements with all countries,” he said. But he then suggested an exception for Pacific Rim countries that were part of the Trans-Pacific Partnership he abandoned last year. The US already has trade agreements with some of those 11 countries, he added, & “we would consider negotiating with the rest, either individually or perhaps as a group, if it is in the interests of all.” After taking questions, Trump left Davos. He faces a number of domestic challenges back home, difficult negotiations with Congress on an immigration overhaul & new reports that he sought last year to fire the special counsel investigating.
Trump Tells Davos ‘America First’ Will Benefit the World
The stock market keeps humming along with the buyers in command. Market breadth was modest, but earnings reports are generally getting positive reviews which encourages buying. There will be 2 more revisions for GDP in Feb & Mar. Gold was down for a 2nd day. Some of that selling has to come from disappointed investors who had been making negative bets on the stock market. The bulls are thinking about taking the Dow to 27K, the next milestone which is only 525 away.
Dow Jones Industrials
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