Thursday, May 10, 2018

Higher markets after inflation data was released

Dow jumped up 123, advancers over decliners 2-1 & NAZ gained 39.  The MLP index added 1+ to 261 & the REIT index rose over 2 to the 336s Junk bond funds fell & Treasuries rose, taking the yield on the 10 Treasury under 3%.  Oil slipped below 71 & gold went up 5 to 1318.

AMJ (Alerian MLP Index tracking fund)

CL=FCrude Oil70.91

GC=FGold   1,320.00

3 Stocks You Should Own Right Now - Click Here!

US consumer prices rebounded less than expected in Apr as rising costs for gasoline & rental accommodation were tempered by a moderation in health-care prices, pointing to a steady buildup of inflation.  The Labor Dept said its Consumer Price Index rose 0.2% after slipping 0.1% in Mar.  In the 12 months thru Apr, the CPI increased 2.5%, the biggest gain since Feb 2017, after rising 2.4% in Mar.  Excluding the volatile food and energy components, the CPI edged up 0.1% after 2 straight monthly increases of 0.2%.  The core CPI rose 2.1% year-on-year in Apr, matching the Mar increase.  The forecast called for the CPI to rebound 0.3% in Apr & the core CPI climbing 0.2%.  The Federal Reserve tracks a different inflation measure, which is now flirting with the central bank's 2% target.  The personal consumption expenditures price index excluding food & energy accelerated to 1.9%  year-on-year in Mar as last year's big declines in the price of cell phone service plans dropped out of the calculation.  The core PCE price index, which had increased 1.6 percent in Feb, was expected to breach its target in May.  Gasoline prices rebounded 3.0% in Apr after tumbling 4.9% in Mar.  Further increases are likely after crude oil prices jumped to 3½-year highs yesterday in the wake of Pres Trump's decision to pull the US out of an international nuclear deal with Iran.

US consumer prices rose a modest 0.2 percent in April, while core prices tick up just 0.1 pct

New applications for US unemployment benefits unexpectedly held near a 48-year low last week, pointing to a further tightening of labor market conditions.  Initial claims for state unemployment benefits were unchanged at a seasonally adjusted 211K, the Labor Dept said.  Claims dropped to 209K during the latest week,  the lowest level since 1969.  Economists had forecast claims rising to 218K.  The labor market is considered to be near or at full employment, leading to a slowdown in job growth as employers struggle to find skilled workers.  A gov report on Tues showed job openings rising to a record 6.6M in Mar.  The 4-week moving average of initial claims, viewed as a better measure of labor market trends as it irons out week-to-week volatility, fell 5K to 216K last week, the lowest level since 1969.  The claims report also showed the number receiving benefits after an initial week of aid rose 30K to 1.79M.  The 4-week moving average of continuing claims dropped 22K to 1.81M, the lowest level since 1973.  Hiring moderated in Mar & Apr after surging in Feb.  The unemployment rate dropped to near a 17-year low of 3.9% in Apr from 4.1% in Mar.  The jobless rate is within striking distance of the Federal Reserve's forecast of 3.8% by the end of this year.

US weekly jobless claims hover near 48-year low

Trade negotiations between US & Chinese leaders are focused in part on getting China to buy more goods rather than getting it to ship less, Commerce Sec Wilbur Ross said.  Fresh from a high-level meeting in China between members of both nations, Ross said there was progress made but that barriers remain.  "The Chinese are very good at the rhetoric of free trade, but in fact they are probably the most protectionist country of the major countries," he added.  Despite the criticism, he was at least pleased with China's willingness to listen & respond to US concerns over a growing trade gap that Pres Trump has pledged to bridge.  "It was the right level of people," Ross said.  "There's a considerable gap between what they put on the table and what we feel we need. But that's OK, you sort of expect that at this stage in the game."  The US has provided a list of products, such as soybeans, that it wants China to buy more of.  Before leaving for the trip, the US delegation had set a list  of demands, which the Chinese officials had responded to by the time Americans arrived.  While Ross said that much is progress, more remains to be done.  "Us selling more to them has more bang for the buck for our economy to begin with, and it's probably less intrusive into their economy," he said.  The China trade situation was part of a broader discussion.  He also discussed the recent tariffs the US has threatened to impose globally, particularly on aluminum & steel.  While the US has delayed implementation as it continues negotiating with affected parties, a Jun 1 deadline approaches.  Ross cautioned countries, particularly those in the EU, to get serious about resolving the issue.  "The president is not a man of great patience, and so I wouldn't count on further extensions," he said.

Commerce Secretary Ross: We're trying to get China to buy more US goods, 'gaps' remain in talks

Stocks are rising again taking the Dow near breakeven YTD.  Not sure that is saying much since it's also near where it was about 6 months ago (on the way up).  Economic data continues to look good but trade negotiations are a soft spot & that is pretty much the #1 news story these days.  The bulls are able to breathe easier, helped by the 10 year Treasury yield dipping below 3%.  Their challenge is to take the Dow into the black YTD & then extend this rally.

Dow Jones Industrials

No comments: