Dow sank 299 (closing at the lows), decliners over advancers 3-1 & NAZ gave back 91. The MLP index fell 2+ to the 263s. Junk bond funds slid lower & Treasuries were sold with the yield on the 10 year Treasury jumping up 5 basis points to 2.91% (more below). Oil fell to the high 62s (more below) & gold declined a very big 13 to 1319.
AMJ (Alerian MLP Index tracking fund
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.5757923431826819)
US consumer confidence jumped to a 17-year high as optimism about employment prospects grew & Americans began seeing additional money in their paychecks from recently enacted tax cuts, data from the Conference Board showed. The confidence index rose to 130.8 (est 126.5), highest since 2000, from downwardly revised 124.3 in Jan. Present conditions measure climbed to 162.4, highest since 2001, from 154.7. Consumer expectations gauge increased to 3-month high of 109.7 from 104. The report reflects increased confidence in employment & incomes, which could support consumer spending. The labor differential, which measures the gap between respondents saying jobs are plentiful & those who say they’re hard to get, rose to 24.7 percentage points, the highest since 2001. Recent tax legislation signed in Dec may have also buoyed sentiment, as many Americans saw bigger after-tax paychecks in Feb due to the law. That may have helped consumers shrug off the early Feb 10% decline in stock prices, which have since recovered most of their losses. “Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects,” Lynn Franco, the Conference Board's director of economic indicators, said. “Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.” Share of respondents expecting stock prices to increase in the year ahead fell to 41.3% from a record 51%. 25.8% of consumers said they expect better business conditions in next 6 months, up from 21.5% in previous month. The share of households who expect incomes to rise in next 6 months rose to 23.8%, highest since 2001, from 20.6% & buying plans for homes, major appliances & new cars increased.
U.S. Consumer Confidence Is at 17-Year High
Jerome Powell opened the door to the Federal Reserve raising US interest rates 4 times this year as he acknowledged strengthening economic growth & inflation may prompt policy makers to rethink their plan for 3 hikes. “My personal outlook for the economy has strengthened since December,” Powell said in response to a question about what would cause the FOMC to step up the pace of policy tightening during his first testimony as Fed chairman before Congress. “We’ve seen continuing strength in the labor market,” Powell told the House Financial Services Committee. “We’ve seen some data that will in my case add some confidence to my view that inflation is moving up to target. We’ve also seen continued strength around the globe, and we’ve seen fiscal policy become more stimulative.” Investors marked up the probability of a Fed rate hike in Q4 to about 50% following Powell's remarks. Odds of increases in Q2 & Q3 ticked up to about 80% & 70%, respectively, while the chances of a boost when the Fed next meets in Mar remained near 100%. Powell is taking over the rate-setting FOMC at a time when the world's largest economy may be shifting gear to faster growth & declining unemployment, though inflation remains below the central bank's 2% goal. Adding to the momentum are tax cuts & spending increases signed into law in Dec. When pressed on how such an improving assessment would affect the path of interest rates, Powell deferred to the FOMC's upcoming meeting on Mar 20-21, saying he wouldn't “want to prejudge” economic & rate-hike projections that will be drawn up for that gathering. Powell’s remarks caused yields on 10-year notes to jump to their highest levels of the day as they touched 2.91% after closing at 2.86% yesterday. Stocks slipped into losses, with the S&P 500 down 0.4%. The Fed chief's opening comments were also positive on the outlook for growth. He said “some of the headwinds the U.S. economy faced in previous years have turned into tailwinds.” He added that monetary policy will try to strike a balance between “avoiding an overheated economy” & bringing inflation back to 2% on a sustained basis. The recent correction in the stock market & rising rates on gov debt shouldn't hamper growth, he said. “We do not see these developments as weighing heavily on the outlook for economic activity, the labor market, and inflation,’’ Powell said. “Indeed, the economic outlook remains strong.’’ Powell repeated the FOMC’s Jan message, saying “further gradual increases’’ in the Fed's policy rate “will best promote’’ the attainment of the central bank's objectives of maximum employment & stable prices.
Crude fell the most in more than 2 weeks as the International Energy Agency warned about seemingly unstoppable US shale production. Futures in New York dropped about 2% after IEA Executive Director Fatih Birol said "explosive growth" in US output may extend beyond this year. Investors were also bracing for a gov tally tomorrow that's expected to show American crude inventories rose to the highest since 2017. A strengthening $ further eroded the appeal of commodities. As OPEC works to trim output, producers are committed to bringing supply & demand into balance, UAE Energy Minister Suhail Al Mazrouei said. Strong US shale growth is a risk factor that could delay those efforts, Birol said. West Texas Intermediate for Apr delivery tumbled 98¢ to $62.93 a barrel. Brent for Apr settlement, which expires tomorrow, declined 88¢ to $66.62 & the global benchmark crude traded at a $3.69 premium to WTI. Strength in the $ weighed on crude prices as a rising greenback diminishes the appeal of commodities priced in the US currency. A gauge of the currency against 10 major peers, rose as much as 0.7% as Federal Reserve Chairman Jerome Powell said the economic outlook has strengthened. A survey ahead of the release of Energy Information Administration data showed US crude inventories increased 3M barrels last week. Still, at the Cushing, Oklahoma, pipeline hub, crude inventories probably dropped by 1.2M barrels making for a 10th straight week of declines. US crude output has surged above 10M barrels a day & the oil rig count climbed for a 5th straight week.
Macy's broke out of its 3-year sales funk, reporting a healthy sales gain at existing stores for the holiday period as it benefited from an improving economy & its own initiatives like an overhauled customer loyalty program. The department store chain also posted sharply higher earnings for Q4, boosted by the sale of certain real estate assets & issued an upbeat outlook. Macy's & other department stores are trying to regroup as shoppers spend more online & on items other than the clothing on which the chains are very dependent. That has forced retailers to revamp their businesses, from closing poorly performing stores to changing their product lineups to expanding their online services. Sales at established stores rose 1.4%, which includes sales in licensed departments like jewelry, well above the 0.4% increase analysts expected & reversed nearly 3 years of quarterly declines in that measure. For the year, that figure was down 1.9%. CEO Jeff Gennette, who took over nearly a year ago, says the company's focus has been expanding online, stabilizing its stores & laying the foundation for growth. Macy's had said earlier in the year it will close another 11 stores, cut jobs & streamline non-store functions to save about $300M. The chain, which has 140K employees, said those changes will affect 5K jobs. Macy's is seeing many of its initiatives starting to bear fruit, & said that it's using the windfall from the corp tax reform law to accelerate some of them. The company is adding its off-price concept called Backstage to another 100 stores. For the first time, it will be adding them to stores located in premium malls. Macy's execs said that existing shoppers are spending more in stores that have a Backstage, which is currently in 45 stores. The company has also been testing new initiatives like mobile checkout, new lighting & fixtures at its Woodbridge, New Jersey store. Those elements will be rolled out to 50 more stores this year. It's also been trying to get more value out of its real estate holdings & said asset sales in the latest fiscal year, stores & other facilities like warehouses & parking garages, came to $411M. EPS was $4.31 in Q4. EPS adjusted for pretax gains were $2.82, easily beating expectations of $2.69. Revenue of $8.67B was just short of expectations. Macy's expects full-year EPS of $3.55-3.75. Analysts expected EPS of $3.05. The stock gained 95¢.
If you would like to learn more about Macy's, click on this link:
club.ino.com/trend/analysis/stock/M?a_aid=CD3289&a_bid=6ae5b6f7
Consumer confidence data looks great, but traders are more concerned with the prospects of a 4th rate hike this year. The worriers are missing the connection that more rate hikes will be related to a strong economy. That's what the consumer confidence data is talking about. Today's decline is not really significant after the rise off lows in early Feb. But more negative thoughts from the worriers will drag stocks lower & the Dow closing at the lows today is very chilling.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund
US consumer confidence jumped to a 17-year high as optimism about employment prospects grew & Americans began seeing additional money in their paychecks from recently enacted tax cuts, data from the Conference Board showed. The confidence index rose to 130.8 (est 126.5), highest since 2000, from downwardly revised 124.3 in Jan. Present conditions measure climbed to 162.4, highest since 2001, from 154.7. Consumer expectations gauge increased to 3-month high of 109.7 from 104. The report reflects increased confidence in employment & incomes, which could support consumer spending. The labor differential, which measures the gap between respondents saying jobs are plentiful & those who say they’re hard to get, rose to 24.7 percentage points, the highest since 2001. Recent tax legislation signed in Dec may have also buoyed sentiment, as many Americans saw bigger after-tax paychecks in Feb due to the law. That may have helped consumers shrug off the early Feb 10% decline in stock prices, which have since recovered most of their losses. “Despite the recent stock market volatility, consumers expressed greater optimism about short-term prospects for business and labor market conditions, as well as their financial prospects,” Lynn Franco, the Conference Board's director of economic indicators, said. “Overall, consumers remain quite confident that the economy will continue expanding at a strong pace in the months ahead.” Share of respondents expecting stock prices to increase in the year ahead fell to 41.3% from a record 51%. 25.8% of consumers said they expect better business conditions in next 6 months, up from 21.5% in previous month. The share of households who expect incomes to rise in next 6 months rose to 23.8%, highest since 2001, from 20.6% & buying plans for homes, major appliances & new cars increased.
U.S. Consumer Confidence Is at 17-Year High
Jerome Powell opened the door to the Federal Reserve raising US interest rates 4 times this year as he acknowledged strengthening economic growth & inflation may prompt policy makers to rethink their plan for 3 hikes. “My personal outlook for the economy has strengthened since December,” Powell said in response to a question about what would cause the FOMC to step up the pace of policy tightening during his first testimony as Fed chairman before Congress. “We’ve seen continuing strength in the labor market,” Powell told the House Financial Services Committee. “We’ve seen some data that will in my case add some confidence to my view that inflation is moving up to target. We’ve also seen continued strength around the globe, and we’ve seen fiscal policy become more stimulative.” Investors marked up the probability of a Fed rate hike in Q4 to about 50% following Powell's remarks. Odds of increases in Q2 & Q3 ticked up to about 80% & 70%, respectively, while the chances of a boost when the Fed next meets in Mar remained near 100%. Powell is taking over the rate-setting FOMC at a time when the world's largest economy may be shifting gear to faster growth & declining unemployment, though inflation remains below the central bank's 2% goal. Adding to the momentum are tax cuts & spending increases signed into law in Dec. When pressed on how such an improving assessment would affect the path of interest rates, Powell deferred to the FOMC's upcoming meeting on Mar 20-21, saying he wouldn't “want to prejudge” economic & rate-hike projections that will be drawn up for that gathering. Powell’s remarks caused yields on 10-year notes to jump to their highest levels of the day as they touched 2.91% after closing at 2.86% yesterday. Stocks slipped into losses, with the S&P 500 down 0.4%. The Fed chief's opening comments were also positive on the outlook for growth. He said “some of the headwinds the U.S. economy faced in previous years have turned into tailwinds.” He added that monetary policy will try to strike a balance between “avoiding an overheated economy” & bringing inflation back to 2% on a sustained basis. The recent correction in the stock market & rising rates on gov debt shouldn't hamper growth, he said. “We do not see these developments as weighing heavily on the outlook for economic activity, the labor market, and inflation,’’ Powell said. “Indeed, the economic outlook remains strong.’’ Powell repeated the FOMC’s Jan message, saying “further gradual increases’’ in the Fed's policy rate “will best promote’’ the attainment of the central bank's objectives of maximum employment & stable prices.
Crude fell the most in more than 2 weeks as the International Energy Agency warned about seemingly unstoppable US shale production. Futures in New York dropped about 2% after IEA Executive Director Fatih Birol said "explosive growth" in US output may extend beyond this year. Investors were also bracing for a gov tally tomorrow that's expected to show American crude inventories rose to the highest since 2017. A strengthening $ further eroded the appeal of commodities. As OPEC works to trim output, producers are committed to bringing supply & demand into balance, UAE Energy Minister Suhail Al Mazrouei said. Strong US shale growth is a risk factor that could delay those efforts, Birol said. West Texas Intermediate for Apr delivery tumbled 98¢ to $62.93 a barrel. Brent for Apr settlement, which expires tomorrow, declined 88¢ to $66.62 & the global benchmark crude traded at a $3.69 premium to WTI. Strength in the $ weighed on crude prices as a rising greenback diminishes the appeal of commodities priced in the US currency. A gauge of the currency against 10 major peers, rose as much as 0.7% as Federal Reserve Chairman Jerome Powell said the economic outlook has strengthened. A survey ahead of the release of Energy Information Administration data showed US crude inventories increased 3M barrels last week. Still, at the Cushing, Oklahoma, pipeline hub, crude inventories probably dropped by 1.2M barrels making for a 10th straight week of declines. US crude output has surged above 10M barrels a day & the oil rig count climbed for a 5th straight week.
Macy's broke out of its 3-year sales funk, reporting a healthy sales gain at existing stores for the holiday period as it benefited from an improving economy & its own initiatives like an overhauled customer loyalty program. The department store chain also posted sharply higher earnings for Q4, boosted by the sale of certain real estate assets & issued an upbeat outlook. Macy's & other department stores are trying to regroup as shoppers spend more online & on items other than the clothing on which the chains are very dependent. That has forced retailers to revamp their businesses, from closing poorly performing stores to changing their product lineups to expanding their online services. Sales at established stores rose 1.4%, which includes sales in licensed departments like jewelry, well above the 0.4% increase analysts expected & reversed nearly 3 years of quarterly declines in that measure. For the year, that figure was down 1.9%. CEO Jeff Gennette, who took over nearly a year ago, says the company's focus has been expanding online, stabilizing its stores & laying the foundation for growth. Macy's had said earlier in the year it will close another 11 stores, cut jobs & streamline non-store functions to save about $300M. The chain, which has 140K employees, said those changes will affect 5K jobs. Macy's is seeing many of its initiatives starting to bear fruit, & said that it's using the windfall from the corp tax reform law to accelerate some of them. The company is adding its off-price concept called Backstage to another 100 stores. For the first time, it will be adding them to stores located in premium malls. Macy's execs said that existing shoppers are spending more in stores that have a Backstage, which is currently in 45 stores. The company has also been testing new initiatives like mobile checkout, new lighting & fixtures at its Woodbridge, New Jersey store. Those elements will be rolled out to 50 more stores this year. It's also been trying to get more value out of its real estate holdings & said asset sales in the latest fiscal year, stores & other facilities like warehouses & parking garages, came to $411M. EPS was $4.31 in Q4. EPS adjusted for pretax gains were $2.82, easily beating expectations of $2.69. Revenue of $8.67B was just short of expectations. Macy's expects full-year EPS of $3.55-3.75. Analysts expected EPS of $3.05. The stock gained 95¢.
club.ino.com/trend/analysis/stock/M?a_aid=CD3289&a_bid=6ae5b6f7
Macy's tops expectations, optimistic outlook sends shares up
Consumer confidence data looks great, but traders are more concerned with the prospects of a 4th rate hike this year. The worriers are missing the connection that more rate hikes will be related to a strong economy. That's what the consumer confidence data is talking about. Today's decline is not really significant after the rise off lows in early Feb. But more negative thoughts from the worriers will drag stocks lower & the Dow closing at the lows today is very chilling.
Dow Jones Industrials
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