Dow recovered 110, advancers over decliners 4-3 & NAZ inched up 1. The MLP index fell 4 to 234, extending its bearish run shown below, & the REIT index dropped 4+ to the 323s. Junk bond funds crawled higher & Treasuries pulled back after yesterday's gains. Oil climbed in the 63s & gold was flattish at 1337.
AMJ (Alerian MLP Index tracking fund)
Stocks bounced back from yesterday's selloff as the rout in technology selloff eased & carmakers rallied on strong sales reports. Treasuries & gold retreated. The S&P 500 climbed from the lowest level since early Feb after closing below the 200-day moving average for the first time since the Brexit vote almost 2 years ago. General Motors (GM) jumped almost 4%. The 10-year Treasury yield pushed above 2.76%, while the $ was steady. The Stoxx Europe 600 Index headed for its first decline in 4 days as markets reopened after the long weekend. Investors sifted through the rubble of the latest selloff in US shares, with some of the hardest hit stocks rising again. A host of issues still confront the market, from trade angst as Pres Trump looks for a quick win on Nafta negotiations to concern that high-flying technology shares have further to retreat. The fluctuations in mood come as investors prepare for earnings season. They still anticipate a strong showing, but will be watchful for any more signs of a slowdown in the synchronized global expansion.
U.S. Stocks Rebound With Tech, Treasuries Weaken
Major automakers reported a bigger-than-expected bump in Mar sales as more aggressive industry discounting gave carmakers a boost. “It was a blockbuster month and beyond what was anticipated,” Michelle Krebs, a senior analyst with Autotrader, said. “This could blow past the forecast. There were some incentives, but tax refunds are coming in and the economy is good.” General Motors (GM) said Mar sales surged 16%, triple the gain that had been expected. Ford's (F) light-vehicle sales rose 3.5%, outpacing the 0.8% gain that had been forecasted. Most automakers were expected to report small increases for Mar, which had one more selling day than the year-earlier month. The annualized pace of sales, adjusted for seasonal trends, was probably about 16.8M vehicles, matching the rate in Mar 2017 & would be the weakest since Hurricane Harvey ravaged dealerships across the Texas Gulf Coast in Aug. Fiat Chrysler (FCAU) boosted car & light truck deliveries by 14%, beating the estimate for a 1.9% increase. Sales for the Jeep sport utility vehicle brand soared 45%, driven by a more than 6-fold surge for the compact Compass. GM is throwing a wrench in the industry sales reporting process by announcing a plan to end a 25-year-long practice of disclosing monthly results & shifting to quarterly releases. Kurt McNeil, US VP of sales operations, said the move will better separate “real” demand trends from “short-term fluctuations.” The switch by GM comes as analysts widely expect industrywide deliveries to slump for the 2nd year in a row after an unprecedented 7-year growth spurt. Incentive spending likely helped buoy sales last month, with average discounts rising $74 from a year ago to $3849. That was driven by deeper discounting on trucks & SUVs, up $160 per vehicle from a year ago, in an increasingly crowded market.
Detroit Automakers' March Deliveries Trounce Analyst Estimates
China will respond to any tariffs imposed by the US against alleged violations of intellectual property rights with the same proportion, scale & intensity, said its US ambassador Cui Tiankai. Cui's comments, in an interview with state-run CGTN English news channel yesterday, are the first to indicate that China will retaliate on a scale that matches US plans for additional duties on Chinese imports. The US is readying duties on $50B of Chinese products as punishment for what DC sees as widespread violations of intellectual property rights. US Trade Representative Robert Lighthizer (USTR) has until Fri to propose a list of Chinese products to be targeted to compensate for what he said was harm caused to the US economy by China's policies. American companies doing business in China have long argued that China uses a range of tactics to force them to transfer intellectual property, & that Chinese entities engage in widespread theft of US trade secrets. Following an investigation into China's intellectual property practices, the USTR said the US will “confront China over its state-led, market-distorting” practices in these areas. “If they do, we will certainly take counter measures of the same proportion and of the same scale, same intensity,” Cui said. He said China has made good progress strengthening protection of intellectual property rights & is ready to look at cases where violations have occurred. After announcing that tariffs on 128 kinds of imported goods from the US would take effect yesterday, China urged trade talks with the US to prevent greater damage to relations. The reciprocal tariffs, a response to US tariffs on metals announced in Mar on national security grounds, are imposed on goods valued at about $3B, a tiny fraction of its US imports.
China to Respond to New U.S. Duties With Same Scale, ‘Intensity,’ Ambassador
Today's "rally" is hardly impressive. Considering all the selling yesterday, this barely qualifies as a recovery. Tech stocks remain under selling pressure with a host of problems starting with the biggest of the biggies. If possible, more importantly are trade disputes. The US is applying pressure on China while it is negotiating with most other major partners for better terms. The Dow chart below still has a lot of underlying selling pressure because the bulls are having a difficult time making their case for higher stock prices. As soon as this PM, selling may resume in force.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 63.48 | +0.47 | +0.8% |
| GC=F | Gold | 1,338.30 | -8.60 | -0.6% |
Stocks bounced back from yesterday's selloff as the rout in technology selloff eased & carmakers rallied on strong sales reports. Treasuries & gold retreated. The S&P 500 climbed from the lowest level since early Feb after closing below the 200-day moving average for the first time since the Brexit vote almost 2 years ago. General Motors (GM) jumped almost 4%. The 10-year Treasury yield pushed above 2.76%, while the $ was steady. The Stoxx Europe 600 Index headed for its first decline in 4 days as markets reopened after the long weekend. Investors sifted through the rubble of the latest selloff in US shares, with some of the hardest hit stocks rising again. A host of issues still confront the market, from trade angst as Pres Trump looks for a quick win on Nafta negotiations to concern that high-flying technology shares have further to retreat. The fluctuations in mood come as investors prepare for earnings season. They still anticipate a strong showing, but will be watchful for any more signs of a slowdown in the synchronized global expansion.
U.S. Stocks Rebound With Tech, Treasuries Weaken
Major automakers reported a bigger-than-expected bump in Mar sales as more aggressive industry discounting gave carmakers a boost. “It was a blockbuster month and beyond what was anticipated,” Michelle Krebs, a senior analyst with Autotrader, said. “This could blow past the forecast. There were some incentives, but tax refunds are coming in and the economy is good.” General Motors (GM) said Mar sales surged 16%, triple the gain that had been expected. Ford's (F) light-vehicle sales rose 3.5%, outpacing the 0.8% gain that had been forecasted. Most automakers were expected to report small increases for Mar, which had one more selling day than the year-earlier month. The annualized pace of sales, adjusted for seasonal trends, was probably about 16.8M vehicles, matching the rate in Mar 2017 & would be the weakest since Hurricane Harvey ravaged dealerships across the Texas Gulf Coast in Aug. Fiat Chrysler (FCAU) boosted car & light truck deliveries by 14%, beating the estimate for a 1.9% increase. Sales for the Jeep sport utility vehicle brand soared 45%, driven by a more than 6-fold surge for the compact Compass. GM is throwing a wrench in the industry sales reporting process by announcing a plan to end a 25-year-long practice of disclosing monthly results & shifting to quarterly releases. Kurt McNeil, US VP of sales operations, said the move will better separate “real” demand trends from “short-term fluctuations.” The switch by GM comes as analysts widely expect industrywide deliveries to slump for the 2nd year in a row after an unprecedented 7-year growth spurt. Incentive spending likely helped buoy sales last month, with average discounts rising $74 from a year ago to $3849. That was driven by deeper discounting on trucks & SUVs, up $160 per vehicle from a year ago, in an increasingly crowded market.
Detroit Automakers' March Deliveries Trounce Analyst Estimates
China will respond to any tariffs imposed by the US against alleged violations of intellectual property rights with the same proportion, scale & intensity, said its US ambassador Cui Tiankai. Cui's comments, in an interview with state-run CGTN English news channel yesterday, are the first to indicate that China will retaliate on a scale that matches US plans for additional duties on Chinese imports. The US is readying duties on $50B of Chinese products as punishment for what DC sees as widespread violations of intellectual property rights. US Trade Representative Robert Lighthizer (USTR) has until Fri to propose a list of Chinese products to be targeted to compensate for what he said was harm caused to the US economy by China's policies. American companies doing business in China have long argued that China uses a range of tactics to force them to transfer intellectual property, & that Chinese entities engage in widespread theft of US trade secrets. Following an investigation into China's intellectual property practices, the USTR said the US will “confront China over its state-led, market-distorting” practices in these areas. “If they do, we will certainly take counter measures of the same proportion and of the same scale, same intensity,” Cui said. He said China has made good progress strengthening protection of intellectual property rights & is ready to look at cases where violations have occurred. After announcing that tariffs on 128 kinds of imported goods from the US would take effect yesterday, China urged trade talks with the US to prevent greater damage to relations. The reciprocal tariffs, a response to US tariffs on metals announced in Mar on national security grounds, are imposed on goods valued at about $3B, a tiny fraction of its US imports.
China to Respond to New U.S. Duties With Same Scale, ‘Intensity,’ Ambassador
Today's "rally" is hardly impressive. Considering all the selling yesterday, this barely qualifies as a recovery. Tech stocks remain under selling pressure with a host of problems starting with the biggest of the biggies. If possible, more importantly are trade disputes. The US is applying pressure on China while it is negotiating with most other major partners for better terms. The Dow chart below still has a lot of underlying selling pressure because the bulls are having a difficult time making their case for higher stock prices. As soon as this PM, selling may resume in force.
Dow Jones Industrials
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