Dow gave back 94 (but off the lows at the opening), decliners over advancers 2-1 & NAZ added 10. The MLP index fell 1+ to 281. Junk bond funds dipped lower & Treasuries were steady with the yield on the 10 year Treasury at 2.85%. Oil slipped to the 64s (more below) & gold went up 6 to 1338.
AMJ (Alerian MLP Index tracking fund)
Global stocks extended the biggest selloff since 2016, with US shares continuing last week's decline & European & Asian equities slumping. Treasuries & the $ stabilized while oil fell & gold rose. The S&P 500 & Dow opened lower, as the Stoxx Europe 600 Index retreated for a 6th day, its longest losing streak since Nov, following similar moves across Asia as both regions took their cue from the US rout on Fri. Yields on core gov bonds in Europe fell, while those of 10-year Treasuries were little changed. The £ slumped after data & the ¥ gained with other safe-haven assets. Equity investors are looking for confirmation that recent declines represent the healthy correction many had expected after the stellar start to the year, but moves today suggest the selloff isn't done yet. The fresh downward move was sparked by US wage data on Fri that pointed to quickening inflation, which would lead to higher rates & therefore rising borrowing costs for companies. Oil extended declines after US explorers raised the number of rigs drilling for crude to the most since Aug.
U.S. Markets Tumble for the Second Straight Day
America's service industries expanded in Jan at the fastest pace in at least a decade as a surge in orders led to a pickup in hiring, figures from the Institute for Supply Management showed. Non-factory index jumped to 59.9 (est 56.7), exceeding all forecasts, from 56 (readings above 50 indicate expansion). Employment gauge rose to 61.6, the strongest in records to 1997, from 56.3. Measure of new orders surged to a 7-year high of 62.7 last month from 54.5. Faster growth at the non-manufacturing industries that make up almost 90% of the economy, combined with robust ISM readings on factory activity, signal sustained demand at the start of the year. The month-over-month advance in orders was the 2nd-biggest in data going back to 1997 & suggests businesses are responding to the passage of tax-cut legislation & boosting capital spending. In addition, a gauge of export orders edged up to a 3-month high as global economic growth picks up. The results are good news for the nation's workforce, as the ISM’s employment index soared. That’s consistent with a gov report last week that showed net hiring at service producers in Jan was the strongest in 3 months. The improvement in service-related employment, a gain in orders & stronger business activity bode well for future economic growth, supporting forecasts that the Federal Reserve will raise interest rates at least 3 times in 2018. The ISM index of business activity, which parallels the ISM's measure of factory production, increased to 59.8 from 57.8 & the measure of export orders rose to 58 from 56.5.
Oil's rally is unraveling on fears over an increase in US production & as a deepening slump in equities undermines market support. Benchmark Brent fell to its lowest level in a month after Baker Hughes data showed American explorers last week raised the number of rigs drilling for crude to the highest in almost 6 months. A global slump in equities deepened, removing another pillar of support for the oil market. Brent has broken $70 a barrel this year, extending a rally driven by the extension of an output deal until the end of 2018 by OPEC & its allies. While crude's strong start to the year was also helped by falling US inventories, strong gains in equities & a weaker $, analysts have been cautioning about the potential for a surge in US shale production. Brent for Apr settlement lost as much as 98¢ to $67.60 a barrel. WTI for Mar delivery dropped 61¢ to $64.84 a barrel & volume traded was about 73% above the 100-day average. US drillers last week added 6 rigs to raise the number of machines drilling for crude to 765, the highest since Aug 11. That may lead to a further increase in US crude production, which breached 10M barrels a day to the highest level in more than 4 decades in Nov.
Selling continues in what is an ugly time fort the stock market. There is not much to say.. Traders are nervous about upcoming interest rate hikes by the Fed even though they have to be expected when the economy is expanding. Continued selling brings lower stock prices & higher yields. This time can be used to research stocks, especially those with higher yields. Further prices declines will bring buying opportunities.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 64.66 | -0.79 | -1.2% |
| GC=F | Gold | 1,336.10 | +2.40 | +0.2% |
Global stocks extended the biggest selloff since 2016, with US shares continuing last week's decline & European & Asian equities slumping. Treasuries & the $ stabilized while oil fell & gold rose. The S&P 500 & Dow opened lower, as the Stoxx Europe 600 Index retreated for a 6th day, its longest losing streak since Nov, following similar moves across Asia as both regions took their cue from the US rout on Fri. Yields on core gov bonds in Europe fell, while those of 10-year Treasuries were little changed. The £ slumped after data & the ¥ gained with other safe-haven assets. Equity investors are looking for confirmation that recent declines represent the healthy correction many had expected after the stellar start to the year, but moves today suggest the selloff isn't done yet. The fresh downward move was sparked by US wage data on Fri that pointed to quickening inflation, which would lead to higher rates & therefore rising borrowing costs for companies. Oil extended declines after US explorers raised the number of rigs drilling for crude to the most since Aug.
U.S. Markets Tumble for the Second Straight Day
America's service industries expanded in Jan at the fastest pace in at least a decade as a surge in orders led to a pickup in hiring, figures from the Institute for Supply Management showed. Non-factory index jumped to 59.9 (est 56.7), exceeding all forecasts, from 56 (readings above 50 indicate expansion). Employment gauge rose to 61.6, the strongest in records to 1997, from 56.3. Measure of new orders surged to a 7-year high of 62.7 last month from 54.5. Faster growth at the non-manufacturing industries that make up almost 90% of the economy, combined with robust ISM readings on factory activity, signal sustained demand at the start of the year. The month-over-month advance in orders was the 2nd-biggest in data going back to 1997 & suggests businesses are responding to the passage of tax-cut legislation & boosting capital spending. In addition, a gauge of export orders edged up to a 3-month high as global economic growth picks up. The results are good news for the nation's workforce, as the ISM’s employment index soared. That’s consistent with a gov report last week that showed net hiring at service producers in Jan was the strongest in 3 months. The improvement in service-related employment, a gain in orders & stronger business activity bode well for future economic growth, supporting forecasts that the Federal Reserve will raise interest rates at least 3 times in 2018. The ISM index of business activity, which parallels the ISM's measure of factory production, increased to 59.8 from 57.8 & the measure of export orders rose to 58 from 56.5.
Service Industries in U.S. Grow by Most in at Least 10 Years
Oil's rally is unraveling on fears over an increase in US production & as a deepening slump in equities undermines market support. Benchmark Brent fell to its lowest level in a month after Baker Hughes data showed American explorers last week raised the number of rigs drilling for crude to the highest in almost 6 months. A global slump in equities deepened, removing another pillar of support for the oil market. Brent has broken $70 a barrel this year, extending a rally driven by the extension of an output deal until the end of 2018 by OPEC & its allies. While crude's strong start to the year was also helped by falling US inventories, strong gains in equities & a weaker $, analysts have been cautioning about the potential for a surge in US shale production. Brent for Apr settlement lost as much as 98¢ to $67.60 a barrel. WTI for Mar delivery dropped 61¢ to $64.84 a barrel & volume traded was about 73% above the 100-day average. US drillers last week added 6 rigs to raise the number of machines drilling for crude to 765, the highest since Aug 11. That may lead to a further increase in US crude production, which breached 10M barrels a day to the highest level in more than 4 decades in Nov.
Selling continues in what is an ugly time fort the stock market. There is not much to say.. Traders are nervous about upcoming interest rate hikes by the Fed even though they have to be expected when the economy is expanding. Continued selling brings lower stock prices & higher yields. This time can be used to research stocks, especially those with higher yields. Further prices declines will bring buying opportunities.
Dow Jones Industrials
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