Dow tumbled 327, decliners over advancers 2-1 & NAZ dropped 73. The MLP index lost 1+ to the 241s & the REIT index was even in the 229s. Junk bond funds were off slightly & Treasuries rose, taking the yield on the 10 year Treasuring down to 2.8%. Oil slid lower in the 63s & gold went up 6 to 1335 while stocks were sold.
AMJ (Alerian MLP Index tracking fund)
US hiring cooled in Mar following a strong Feb while wages picked up, returning labor-market progress to a more sustainable pace that keeps the Federal Reserve on track for further interest-rate increases. Payrolls rose 103K, compared with the estimate for 185K, after an upwardly revised 326K advance, Labor Dept figures showed. The jobless rate was 4.1% for a 6th month, bucking forecasts for a decline, while average hourly earnings increased 2.7% from a year earlier, matching projections. The results follow strong hiring in 2017 & show an average pace of payrolls growth this year that’s still sufficient to push down the unemployment rate, which remains the lowest since 2000 & below Fed estimates of levels sustainable in the long run. A pickup in wages, which has remained elusive in this expansion, would support consumer spending, though some economists worry it may also spark inflation. The specter of a trade war with China is a wild card for the outlook, particularly after Pres Trump raised tensions by ordering his administration to consider imposing tariffs on an additional $100B in Chinese imports. The slowdown in payroll gains reflected reversals in construction & retail. Construction payrolls fell by 15K, the first decline since Jul, following a gain of 65K in Feb. Retailers cut 4400 workers, following a rise of 47K in Feb. The weather may have played a role, economists said before the report. Snowstorms in the Northeast probably restricted hours worked & kept people away from their jobs & Mar may also have seen some payback after warmer temperatures boosted employment in Feb. While the average workweek for all private employees was unchanged at 34.5 hours, hours edged down for production & nonsupervisory workers, as well as those in manufacturing. A shorter workweek has the effect of boosting average hourly pay. The participation rate, or share of working-age people in the labor force, decreased to 62.9% after jumping 0.3 percentage point to 63% in the prior month. The rate, still hovering near the lowest level since the 1970s, will continue facing downward pressure as older workers retire. At the same time, improving job prospects are helping attract many people from the sidelines. Even with the smaller payroll gain, the report is largely in sync with the view of Fed policy makers that the labor market is tight. They see the unemployment rate reaching 3.6% at the end of next year.
U.S. Payrolls Rise Below-Forecast 103,000 as Wages Pick Up
Pres Trump said the US markets could face some “pain’’ from the trade standoff with China & other countries but claimed that Americans would be better off in the long-run due to his protectionist actions. “I’m not saying there won’t be a little pain,” Trump said. “ So we might lose a little of it but we’re going to have a much stronger country when we’re finished, and that’s what I’m all about.’’ Trump ordered his administration last evening to consider tariffs on an additional $100B in Chinese imports, sending US stock futures tumbling. Trump cited “China’s unfair retaliation” in response to his list of proposed tariffs earlier this week covering $50B in Chinese products. Stocks have fluctuated drastically for much of the past month as Trump has intensified punitive trade actions against several countries. Trump, who in the past has hailed the rising stock prices during his tenure, has spoken less about the markets as they have retreated from record highs this year. Trump claimed that “the market’s gone up 40 percent or 42 percent.” Since Trump was inaugurated, the S&P 500 is up 17%, the Dow up 24% & NAZ up 27%. Since his election, the S&P 500 is up 33%, the Dow up 44% & the NAZ up 44% , even with recent losses. “We have to do things that other people wouldn’t do. So we may take a hit, but you know what, ultimately we’re going to be much stronger for it,’’ Trump said. “It’s something we had to do, and ultimately if you take a look it’s not only trade with China -- it’s everybody." Responding to Trump's action, China said it would counter US protectionism "to the end, and at any cost," as a war of words over Trump’s proposed tariffs on Chinese imports escalated. "The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people,” the Commerce Ministry said.
Trump Warns U.S. Investors of ‘a Little Pain’ in Trade Standoff
China called on the EU to aid the Asian nation in rejecting protectionism from the US & upholding the intl trade order. China & the EU “need to stand up together with a clear-cut position against protectionism, and need to work with each other to uphold the rules-based multilateral trade order,” Zhang Ming, the head of the Chinese Mission to the EU, said. Recent US actions go “completely against the fundamental principles & values of the World Trade Organization,” he said. China is in the midst of an escalating trade dispute with DC & said on Wed it would levy an additional 25% tariff on about $50B of US imports including soybeans, automobiles, chemicals & aircraft. That was in response to the release by the US of a list of proposed tariffs a day earlier, covering $50B in Chinese products. Pres Trump yesterday increased the pressure by threatening additional levies on $100B in Chinese goods. “China and the EU have kept positive, sound and timely communication following the U.S. move,” according to China's head of mission. China & the EU need to work together to “sustain the sound momentum of global economic growth,” he added. The European Commission, the EU's executive arm, has said it's currently in high-level talks seeking to alleviate the situation. “The EU believes that measures should always be taken within the WTO framework, which provides numerous tools to effectively deal with trade differences,” Commission Spokesman Daniel Rosario said this week. “We call on the relevant parties to ensure WTO compliance of their trade actions.”
The jobs report wasn't really all that bad, the overall economy continues to be strong. But trade tensions are getting worse & there are no quick & easy solutions. The 60 days in which the administration is asking for comments will drag out worries about where changes in the trade picture will take the economy of the US & the world. As I write, more selling is taking the averages lower. The Dow may not be able to hold above 24K by the close.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 63.52 | -0.02 | -0.0% |
| GC=F | Gold | 1,334.10 | +5.60 | +0.4% |
US hiring cooled in Mar following a strong Feb while wages picked up, returning labor-market progress to a more sustainable pace that keeps the Federal Reserve on track for further interest-rate increases. Payrolls rose 103K, compared with the estimate for 185K, after an upwardly revised 326K advance, Labor Dept figures showed. The jobless rate was 4.1% for a 6th month, bucking forecasts for a decline, while average hourly earnings increased 2.7% from a year earlier, matching projections. The results follow strong hiring in 2017 & show an average pace of payrolls growth this year that’s still sufficient to push down the unemployment rate, which remains the lowest since 2000 & below Fed estimates of levels sustainable in the long run. A pickup in wages, which has remained elusive in this expansion, would support consumer spending, though some economists worry it may also spark inflation. The specter of a trade war with China is a wild card for the outlook, particularly after Pres Trump raised tensions by ordering his administration to consider imposing tariffs on an additional $100B in Chinese imports. The slowdown in payroll gains reflected reversals in construction & retail. Construction payrolls fell by 15K, the first decline since Jul, following a gain of 65K in Feb. Retailers cut 4400 workers, following a rise of 47K in Feb. The weather may have played a role, economists said before the report. Snowstorms in the Northeast probably restricted hours worked & kept people away from their jobs & Mar may also have seen some payback after warmer temperatures boosted employment in Feb. While the average workweek for all private employees was unchanged at 34.5 hours, hours edged down for production & nonsupervisory workers, as well as those in manufacturing. A shorter workweek has the effect of boosting average hourly pay. The participation rate, or share of working-age people in the labor force, decreased to 62.9% after jumping 0.3 percentage point to 63% in the prior month. The rate, still hovering near the lowest level since the 1970s, will continue facing downward pressure as older workers retire. At the same time, improving job prospects are helping attract many people from the sidelines. Even with the smaller payroll gain, the report is largely in sync with the view of Fed policy makers that the labor market is tight. They see the unemployment rate reaching 3.6% at the end of next year.
U.S. Payrolls Rise Below-Forecast 103,000 as Wages Pick Up
Pres Trump said the US markets could face some “pain’’ from the trade standoff with China & other countries but claimed that Americans would be better off in the long-run due to his protectionist actions. “I’m not saying there won’t be a little pain,” Trump said. “ So we might lose a little of it but we’re going to have a much stronger country when we’re finished, and that’s what I’m all about.’’ Trump ordered his administration last evening to consider tariffs on an additional $100B in Chinese imports, sending US stock futures tumbling. Trump cited “China’s unfair retaliation” in response to his list of proposed tariffs earlier this week covering $50B in Chinese products. Stocks have fluctuated drastically for much of the past month as Trump has intensified punitive trade actions against several countries. Trump, who in the past has hailed the rising stock prices during his tenure, has spoken less about the markets as they have retreated from record highs this year. Trump claimed that “the market’s gone up 40 percent or 42 percent.” Since Trump was inaugurated, the S&P 500 is up 17%, the Dow up 24% & NAZ up 27%. Since his election, the S&P 500 is up 33%, the Dow up 44% & the NAZ up 44% , even with recent losses. “We have to do things that other people wouldn’t do. So we may take a hit, but you know what, ultimately we’re going to be much stronger for it,’’ Trump said. “It’s something we had to do, and ultimately if you take a look it’s not only trade with China -- it’s everybody." Responding to Trump's action, China said it would counter US protectionism "to the end, and at any cost," as a war of words over Trump’s proposed tariffs on Chinese imports escalated. "The Chinese side will follow suit to the end and at any cost, and will firmly attack, using new comprehensive countermeasures, to firmly defend the interest of the nation and its people,” the Commerce Ministry said.
Trump Warns U.S. Investors of ‘a Little Pain’ in Trade Standoff
China called on the EU to aid the Asian nation in rejecting protectionism from the US & upholding the intl trade order. China & the EU “need to stand up together with a clear-cut position against protectionism, and need to work with each other to uphold the rules-based multilateral trade order,” Zhang Ming, the head of the Chinese Mission to the EU, said. Recent US actions go “completely against the fundamental principles & values of the World Trade Organization,” he said. China is in the midst of an escalating trade dispute with DC & said on Wed it would levy an additional 25% tariff on about $50B of US imports including soybeans, automobiles, chemicals & aircraft. That was in response to the release by the US of a list of proposed tariffs a day earlier, covering $50B in Chinese products. Pres Trump yesterday increased the pressure by threatening additional levies on $100B in Chinese goods. “China and the EU have kept positive, sound and timely communication following the U.S. move,” according to China's head of mission. China & the EU need to work together to “sustain the sound momentum of global economic growth,” he added. The European Commission, the EU's executive arm, has said it's currently in high-level talks seeking to alleviate the situation. “The EU believes that measures should always be taken within the WTO framework, which provides numerous tools to effectively deal with trade differences,” Commission Spokesman Daniel Rosario said this week. “We call on the relevant parties to ensure WTO compliance of their trade actions.”
The jobs report wasn't really all that bad, the overall economy continues to be strong. But trade tensions are getting worse & there are no quick & easy solutions. The 60 days in which the administration is asking for comments will drag out worries about where changes in the trade picture will take the economy of the US & the world. As I write, more selling is taking the averages lower. The Dow may not be able to hold above 24K by the close.
Dow Jones Industrials
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