Dow dropped 127, decliners over advancers 3-2 & NAZ lost 47. The MLP index gave back 1+ to the 246s & the REIT index was off 1+ to the 366s. Junk bond funds remained weak & Treasuries rose in price. Oil rebounded 1+ to the 57s & gold fell 3 to 1325.
AMJ (Alerian MLP Index tracking fund)
Stocks trade lower as Fed's Powell testimony continues
The US trade deficit in goods jumped to end 2018 amid a surge in imports, a move that could cause Q4 economic growth estimates to be lowered, according to an advanced look from the Census Bureau. Dec saw a $79.5B goods deficit, up 12.8% from the $70.5B in Nov. The move came amid a $4B decline in exports, to $135.7B & a $5B increase in imports, to $215.2B. The Census report does not include services. Trade deficits continued to grow throughout the year for the US despite Pres's aids to curb the shortfall through tariffs. The White House & China are in the middle of negotiations aimed at beating a Mar 1 deadline after which more aggressive tariffs could take effect. Trump, however, said it's unlikely the US would ramp up the tariffs if the deadline isn't met. These numbers could lead economists to trim their estimates for Q4 GDP (to be released tomorrow). Expectations currently are for growth to come in around 1.8%, according to the Atlanta Federal Reserve. Trade deficits subtract from GDP. The quarterly calculation, though, could get a boost from inventories, which rose 1.1% at the wholesale level & 0.9% in retail, according to the advanced estimate.
Trade deficit in goods jumps 12.8 percent amid tariff battle
US Trade Representative Robert Lighthizer told said that "much remains to be done" with China on hammering out a trade deal but cited "real progress" towards that goal. Pres Trump's trade negotiator testified before the House Ways & Means Committee after Trump delayed a planned increase in tariffs on Chinese goods scheduled for the end of this week. Asked if there would be a single deal solving all problems with China, Lighthizer said he wasn't "foolish" enough to think there'd be just one negotiation. The Dow was off more than 100 as Lighthizer spoke & Trump's former lawyer Michael Cohen separately testified to another panel.
Thoughts about the US-China trade deal are driving the stock market & they have grown negative. More work is needed which means talks could drag on for weeks, maybe months. Today's trade deficit data did not help. The chart below shows that the Dow is only up a smidgen since Feb 15 & has slipped below 26K. With sluggish US economic data, bulls will need help on the trade front to extend this year's rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 56.52 | +1.02 | +1.8% |
| GC=F | Gold | 1,325.60 | -2.90 | -0.2% |
Stocks traded modestly lower following the latest earnings & ahead of day 2 of Fed Chair Jerome Powell's testimony before congress. Yesterday, Powell addressed the Senate Banking Committee & said that
the central bank would remain "patient" in deciding on further interest
rate hikes & that rising risks & recent soft data should not prevent
solid growth for the economy this year. The 2nd summit between North Korean leader Kim Jong Un & Pres
Trump is underway as the 2 leaders shook hands in Hanoi. Investors will be looking for developments there. In Asian markets. China's Shanghai
composite added 0.4%, Hong Kong's Hang Seng slipped pennies & Japan's Nikkei added 0.5%. In Europe, London's FTSE fell 0.7%, Germany's DAX fell 0.3% & France's CAC was off 0.2%.
Stocks trade lower as Fed's Powell testimony continues
Contracts to buy previously owned homes rose in Jan, the National Association of Realtors (NAR) said. The NAR's pending home sales index increased to a reading of 103.2, up 4.6% from the prior month. Dec's index was revised to 98.7 from 99.0. The forecast called for pending home sales rising 0.4% last month. Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales 1-2 months later.
US pending home sales increase by 4.6% in January
The US trade deficit in goods jumped to end 2018 amid a surge in imports, a move that could cause Q4 economic growth estimates to be lowered, according to an advanced look from the Census Bureau. Dec saw a $79.5B goods deficit, up 12.8% from the $70.5B in Nov. The move came amid a $4B decline in exports, to $135.7B & a $5B increase in imports, to $215.2B. The Census report does not include services. Trade deficits continued to grow throughout the year for the US despite Pres's aids to curb the shortfall through tariffs. The White House & China are in the middle of negotiations aimed at beating a Mar 1 deadline after which more aggressive tariffs could take effect. Trump, however, said it's unlikely the US would ramp up the tariffs if the deadline isn't met. These numbers could lead economists to trim their estimates for Q4 GDP (to be released tomorrow). Expectations currently are for growth to come in around 1.8%, according to the Atlanta Federal Reserve. Trade deficits subtract from GDP. The quarterly calculation, though, could get a boost from inventories, which rose 1.1% at the wholesale level & 0.9% in retail, according to the advanced estimate.
Trade deficit in goods jumps 12.8 percent amid tariff battle
US Trade Representative Robert Lighthizer told said that "much remains to be done" with China on hammering out a trade deal but cited "real progress" towards that goal. Pres Trump's trade negotiator testified before the House Ways & Means Committee after Trump delayed a planned increase in tariffs on Chinese goods scheduled for the end of this week. Asked if there would be a single deal solving all problems with China, Lighthizer said he wasn't "foolish" enough to think there'd be just one negotiation. The Dow was off more than 100 as Lighthizer spoke & Trump's former lawyer Michael Cohen separately testified to another panel.
Lighthizer says much remains to be done on China trade deal
Thoughts about the US-China trade deal are driving the stock market & they have grown negative. More work is needed which means talks could drag on for weeks, maybe months. Today's trade deficit data did not help. The chart below shows that the Dow is only up a smidgen since Feb 15 & has slipped below 26K. With sluggish US economic data, bulls will need help on the trade front to extend this year's rally.
Dow Jones Industrials
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