Monday, March 12, 2018

Higher markets as trade war fears ease

Dow added 19, advancers over decliners about 2-1 & NAZ went up 32 to another record.  The MLP index gained 1+ to the 261s & the REIT index rose 2 to the 327s.  Junk bond funds were mixed & Treasuries crawled higher.  Oil slid back to the 61s & gold dropped 5 to 1318.

AMJ (Alerian MLP Index tracking fund)

CL=FCrude Oil61.35

GC=FGold  1,317.90

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Stocks advanced, tracking gains across European & Asian markets as trade-war concerns took a back seat to economic optimism following a report Fri of stronger US jobs growth.  Treasuries were steady while the $ & most commodities fell.  The S&P 500 opened higher, anchored by consumer & tech shares.  The Stoxx Europe 600 Index was poised for the longest winning streak since Oct, as utility companies set the pace, while gauges from Tokyo to Sydney jumped.  Strong economic indicators seem to have given fresh impetus to the 9-year-old bull market in global equities, which was roiled in recent weeks as Pres Trump raised the prospect of a full-fledged trade war.  With data due from China this week as well as readings on US inflation & retail sales, investors will be looking for more reasons to keep the party going.  The ¥ strengthened as political clouds gathered around Japan's Finance Ministry, run by a stalwart ally of Prime Minister Shinzo Abe.  Finance Minister Taro Aso is under pressure after his ministry altered documents tied to a controversial land sale.  Aso has been Abe's deputy since he took office in 2012 & is seen as a key backer of the Abenomics program, part of which focuses on weakening the ¥ to boost the exports.   West Texas crude nudged lower after last week's advance & emerging-market stocks surged.

Stocks Climb on Upbeat Outlook; Dollar Declines: Markets Wrap

Pres Trump says his commerce secretary will be talking to the EU about tariffs Trump argues have been unfair to the US.  Trump Tweeted: "Secretary of Commerce Wilbur Ross will be speaking with representatives of the European Union about eliminating the large Tariffs and Barriers they use against the U.S.A. Not fair to our farmers and manufacturers."   The pres announced last week that the US would impose heavy tariffs on imported steel & aluminum, with some countries potentially exempted.  Amid fears of a global trade war, the EU is among those seeking exemptions.  Over the weekend, Trump argued that the US has been abused economically by the EU, saying they were "wonderful countries who treat the U.S. very badly on trade."

Trump says Commerce Secretary will talk tariffs with EU

Oil prices fell on expectations that US output will rise this year, erasing earlier gains buoyed by lower weekly US rig counts & falling US unemployment.  Brent crude futures were at $64.93 per barrel, down 56¢ from their previous close.  West Texas Intermediate (WTI) crude futures fell 52¢ to $61.52 a barrel.  Helping the dip, hedge funds & money managers cut their bullish wagers on US crude oil for the first time in 3 weeks.  The reduction came as gross short positions on the New York Mercantile Exchange climbed to their highest level in nearly a month.  Crude prices had risen on Fri & today after the US economy added the biggest number of jobs in more than 1½ years in Feb.  In oil markets, US energy companies last week cut oil rigs for the first time in almost 2 months, with drillers cutting back four rigs, to 796.  Despite the lower rig count, which is an early indicator of future output, activity remains much higher than a year ago.  Then, 617 rigs were active & most analysts expect US crude oil production, which has already risen by over a 5th since mid-2016 to 10.37M barrels per day (bpd), to expand further.  The US has become the #2 crude oil producer, ahead of top exporter Saudi Arabia.  Only Russia pumps more, at nearly 11M bpd.  OPEC, together with other producers, has been limiting production since the start of 2017 to prop up prices.

Oil, briefly up on lower rig counts, falls on US output outlook

The bulls have returned & are taking stocks higher.  The jobs report on Fri was a biggie, even the doubters took notice.  Easing tensions with North Korea are helping to bring a sense of calm to investors.  However numerous uncertainties are about, stating on the trade front.

Dow Jones Industrials

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