Dow tumbled 335 (but 150 above the lows), decliners over advancers about 4-1 & NAZ plunged a whopping 137. The MLP index sank 8+ to the 244s. Junk bond funds slid lower & Treasuries were about even with the yield on the 10 year Treasury holding at 2.85%. Oil was off pennies in the 62s & gold gained 5 to 1317 as stocks were being sold.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.941898673366142)
Stocks declined globally as a technology selloff sent NAZ to the steepest losses in 6 weeks. Gov bonds pared losses, while the £ jumped on a Brexit breakthrough. US stocks slumped as tech companies were roiled by reports of a Facebook (FB) data breach & Apple (AAPL, a Dow & NAZ stock) efforts to develop its own screens. That sapped Asian equities, while tech also led a retreat for the Stoxx Europe 600 Index. FB fell the most since 2015. The tech rout added to pressure that had mounted over the weekend in DC, as speculation grew that Pres Trump could be prepared to fire Robert Mueller. Meanwhile, large digital companies operating in the EU, could face a 3% tax on their gross revenues based on where their users are located, according to a draft proposal by the European Commission.
Tech Selloff Hits U.S. Stocks; Dow Tumbles More Than 450 Points
club.ino.com/trend/analysis/stock/FB?a_aid=CD3289&a_bid=6ae5b6f7
Global finance ministers meeting this week in Buenos Aires were planning to focus on topics like the workforce in an age of automation & how to boost infrastructure investment. Instead, their attention has turned to US tariffs on steel & aluminum. Finance ministers & central bankers are meeting under the auspices of the Group of 20 summit, a gathering of leaders who represent 80% of the world's economy. The US would like an agenda focused on its concerns about China. Instead this year's summit will involve much of the world trying to pressure the US, with French, German & Brazilian officials identifying the latest US tariff moves as a focus of discussion. "We are all very concerned about the possibility of a trade war," said Marcello Estevão, the Brazilian Finance Ministry's secretary of intl affairs. He said Brazil planned to highlight protectionism as a risk to the global economic outlook, adding that "a majority of countries are with us" in taking this view. German Finance Minister Olaf Scholz said the G-20 was the right body to discuss trade. "I believe the world is growing together and should remain together. Free trade is a very important resource," he said. Protectionism, he said, "has, of course, to be discussed." His French counterpart, Bruno Le Maire struck a similar line. "We don't believe in protectionism, and that we need to have a firm, united and European response to the latest decisions taken by our American partner and ally." German Chancellor Angela Merkel & Chinese Pres Xi Jinping spoke by phone & both agreed to deepen their strategic partnership & discussed global overcapacity in the steel sector. The leaders of the 2 countries facing US tariffs "agreed to continue working for solutions within the framework of the G-20 Global Forum," Ms Merkel's spokesman said.
Crude slipped for the first time in 4 sessions as equities declined around the world against the backdrop of surging oil-production growth from US shale drillers. Futures dropped more than 1.6%. Investors dumped stocks as risky holdings fell out of favor across the globe. The anxiety rippled thru a crude market already unsettled by an increase in drilling activity by American explorers as well as inventories in US tanks & terminals that have expanded in 6 of the past 7 weeks. Oil has stalled out this month after registering its worst Feb drop in ½ a decade. The uplift in US crude production has tempered OPEC's efforts to shrink a global glut. Yesterday, Russian Energy Minister Alexander Novak said his country remains committed to the OPEC-led pact to curb supplies, a campaign that may need to be extended into 2019. West Texas Intermediate for Apr delivery, which expires tomorrow, dropped 36¢ to $61.98. Front-month futures traded at a 9¢ discount to the 2nd-month WTI contract, on track to close at the deepest discount since Nov. When upfront supplies sell for less than later-dated barrels, a market condition known as contango, it's typically a bearish signal because it makes it more profitable to stow crude in storage. Brent for May settlement fell 15¢ to $66.06 & the global benchmark held a $3.95 premium to WTI for the same month. OPEC Secretary-General Mohammad Barkindo said the cartel & allied oil producers are focused on a full implementation of supply curbs intended to clear excess supplies. The special group appointed to monitor implementation of the curbs estimated an overall compliance rate of 138% for Feb. “We started to see the light at the end of the tunnel, but there’s still some work to do,” Barkindo said. “Inventories are still higher than the five-year average.” Stockpiles at the key pipeline hub in Cushing, Oklahoma, probably rose last week for a 2nd straight week, according to a current forecast. After falling by ½ since late Nov, inventories held at Cushing may be poised for restocking as traders take advantage of the contango.
This was another ugly day which has become common in the last couple of months (shown clearly in the Dow chart below). FB & other high profile tech companies have been in the lead on the way up. Now they are serious trouble, at least for the short term. Good times were not meant to last without hiccups along the way. It is difficult to make sense of days like these with their wild swings. It's best to wait & see what a sense of calm brings. Besides tech problems, Wed is the FOMC meetings & tariff issues are not going away anytime soon.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Stocks declined globally as a technology selloff sent NAZ to the steepest losses in 6 weeks. Gov bonds pared losses, while the £ jumped on a Brexit breakthrough. US stocks slumped as tech companies were roiled by reports of a Facebook (FB) data breach & Apple (AAPL, a Dow & NAZ stock) efforts to develop its own screens. That sapped Asian equities, while tech also led a retreat for the Stoxx Europe 600 Index. FB fell the most since 2015. The tech rout added to pressure that had mounted over the weekend in DC, as speculation grew that Pres Trump could be prepared to fire Robert Mueller. Meanwhile, large digital companies operating in the EU, could face a 3% tax on their gross revenues based on where their users are located, according to a draft proposal by the European Commission.
Tech Selloff Hits U.S. Stocks; Dow Tumbles More Than 450 Points
FB shares were under pressure over concerns about how the company manages 3rd-party access to user information. The stock had its worst daily
performance in 4 years. The
company said on Fri it was suspending Strategic Communication
Laboratories (SCL), including their political data analytics firm,
Cambridge Analytica. According to FB, SCL & Cambridge Analytica improperly kept user data, despite telling
the Silicon Valley behemoth they had destroyed them. FB drew some harsh criticism from US &
British lawmakers over the weekend for not providing more information
about how the data firm came to access the information. Meanwhile, the
attorney general in Massachusetts said in social media posts
that her office would launch an investigation. The company
added more clarity to its decision, noting that, “the claim
that this is a data breach is completely false,” reiterating that it
was an issue with how the company used the information that it had
accessed through the proper channels. Major
tech companies were also under pressure from a report
claiming that the EU is set to put a 3% tax on revenue from
the big digital companies. The stock plunged 12.53 (7%).
If you would like to learn more about FB, click on this link:club.ino.com/trend/analysis/stock/FB?a_aid=CD3289&a_bid=6ae5b6f7
Facebook shares tumble over data privacy concern
Global finance ministers meeting this week in Buenos Aires were planning to focus on topics like the workforce in an age of automation & how to boost infrastructure investment. Instead, their attention has turned to US tariffs on steel & aluminum. Finance ministers & central bankers are meeting under the auspices of the Group of 20 summit, a gathering of leaders who represent 80% of the world's economy. The US would like an agenda focused on its concerns about China. Instead this year's summit will involve much of the world trying to pressure the US, with French, German & Brazilian officials identifying the latest US tariff moves as a focus of discussion. "We are all very concerned about the possibility of a trade war," said Marcello Estevão, the Brazilian Finance Ministry's secretary of intl affairs. He said Brazil planned to highlight protectionism as a risk to the global economic outlook, adding that "a majority of countries are with us" in taking this view. German Finance Minister Olaf Scholz said the G-20 was the right body to discuss trade. "I believe the world is growing together and should remain together. Free trade is a very important resource," he said. Protectionism, he said, "has, of course, to be discussed." His French counterpart, Bruno Le Maire struck a similar line. "We don't believe in protectionism, and that we need to have a firm, united and European response to the latest decisions taken by our American partner and ally." German Chancellor Angela Merkel & Chinese Pres Xi Jinping spoke by phone & both agreed to deepen their strategic partnership & discussed global overcapacity in the steel sector. The leaders of the 2 countries facing US tariffs "agreed to continue working for solutions within the framework of the G-20 Global Forum," Ms Merkel's spokesman said.
U.S. tariffs to be in spotlight at G-20 summit
The EU's top trade official says the
28-nation bloc should be excluded from Pres Trump's new
steel & aluminum tariffs, which enter force this week. EU
Trade Commissioner Cecilia Malmstrom said that "the EU should be
excluded as a whole" & that she would convey this message to US
representatives in talks in DC tomorrow. Malmstrom added that the EU is willing to address the problem of steel overproduction,
which she says is the real cause of pain for the US & European
industries. The EU has drawn up a list of "rebalancing" duties to slap on US products if it is not exempted.
EU trade chief demands exemption from US steel tariffs
Crude slipped for the first time in 4 sessions as equities declined around the world against the backdrop of surging oil-production growth from US shale drillers. Futures dropped more than 1.6%. Investors dumped stocks as risky holdings fell out of favor across the globe. The anxiety rippled thru a crude market already unsettled by an increase in drilling activity by American explorers as well as inventories in US tanks & terminals that have expanded in 6 of the past 7 weeks. Oil has stalled out this month after registering its worst Feb drop in ½ a decade. The uplift in US crude production has tempered OPEC's efforts to shrink a global glut. Yesterday, Russian Energy Minister Alexander Novak said his country remains committed to the OPEC-led pact to curb supplies, a campaign that may need to be extended into 2019. West Texas Intermediate for Apr delivery, which expires tomorrow, dropped 36¢ to $61.98. Front-month futures traded at a 9¢ discount to the 2nd-month WTI contract, on track to close at the deepest discount since Nov. When upfront supplies sell for less than later-dated barrels, a market condition known as contango, it's typically a bearish signal because it makes it more profitable to stow crude in storage. Brent for May settlement fell 15¢ to $66.06 & the global benchmark held a $3.95 premium to WTI for the same month. OPEC Secretary-General Mohammad Barkindo said the cartel & allied oil producers are focused on a full implementation of supply curbs intended to clear excess supplies. The special group appointed to monitor implementation of the curbs estimated an overall compliance rate of 138% for Feb. “We started to see the light at the end of the tunnel, but there’s still some work to do,” Barkindo said. “Inventories are still higher than the five-year average.” Stockpiles at the key pipeline hub in Cushing, Oklahoma, probably rose last week for a 2nd straight week, according to a current forecast. After falling by ½ since late Nov, inventories held at Cushing may be poised for restocking as traders take advantage of the contango.
This was another ugly day which has become common in the last couple of months (shown clearly in the Dow chart below). FB & other high profile tech companies have been in the lead on the way up. Now they are serious trouble, at least for the short term. Good times were not meant to last without hiccups along the way. It is difficult to make sense of days like these with their wild swings. It's best to wait & see what a sense of calm brings. Besides tech problems, Wed is the FOMC meetings & tariff issues are not going away anytime soon.
Dow Jones Industrials
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