Dow jumped up 85 (but off earlier highs), advancers over decliners about 3-2 & NAZ gained 35. The MLP index did little in the 246s & the REIT index crawled up to the 365s. Junk bond funds fluctuated & Treasuries slid lower in price. Oil retreated to the 56s & gold dropped 8 to 1308.
AMJ (Alerian MLP Index tracking fund)
Stocks come into March roaring like a lion
US manufacturing activity expanded at a slower-than-expected pace last month & reached its lowest level in more than 2 years. The ISM Manufacturing Index slipped to 54.2 in Feb from 56.6 in Jan, the Institute for Supply Management said. The forecast called for the index to slip to 55.5 in Feb. The index's print was also the weakest since Nov 2016. A decline in new orders, production, employment & prices all contributed to the broader index's decline. "Comments from the panel reflect continued expanding business strength, supported by notable demand and output, although both were softer than the prior month," Timothy Fiore, chair of the Institute for Supply Management, said. "Consumption (production and employment) continued to expand but fell a combined 8.9 points from the previous month's levels."
ISM manufacturing index hits lowest level since November 2016
A surprise jump in business spending boosted Q4 growth to 2.6%, but economists say Q1 could expand at ½ that pace due to the gov shutdown & a sluggish consumer. Q4 GDP topped the 2.3% expected, due in part to a 6.7% increase in equipment spending & a 13.1% jump in intellectual property, which includes software. The pickup was a surprise after weak durable goods spending data in the qtr. While business expenditures look better, the sharp drop in retail sales in Dec could signal a weaker consumer at the start of the year. That will make for a tougher comparison, & even before the Q4 report, economists were looking for Q1 growth below 2% with a pickup in H2. Consumers at the end of 2018 were facing the stock market's sharp holiday season decline, the prospect of a gov shutdown & rising interest rates. The gov remained shutdown for most of Jan, but consumers are now showing signs of a rebound with an unexpected jump in consumer confidence in Feb. The Bureau of Economic Analysis said 2018 growth was 2.9%, a calculation derived by averaging growth in each qtr, but economists who measure growth on a Q4-over-Q4 basis say growth was 3.1% for 2018, up from 2.5% for 2017. By either measure, the growth rate was close to the 3% the Trump administration promised would be generated by its economic policies. But H1-2019 already looks to be well below that pace, even if Q2 picks back up, as expect. The final GDP number for Q4 will be released on Mar 28 & it could be revised in either direction. The pickup in business spending, therefore, is critical. If it continues, it could dispel some doubts that corps are not using tax proceeds for investment but for things like stock buybacks & divs. It also suggests there may have been less delayed spending because of uncertainty surrounding trade.
Trump got a strong economy in 2018, but first quarter of this year looks weak
A private survey on China's manufacturing sector showed that factory activity shrank for a 3rd straight month in Feb. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) came in at 49.9 for Feb — higher than Jan's reading of 48.3 & better than the 48.5 that was expected. However, it showed that manufacturing activity remained around contractionary levels not seen since early 2016. A reading below 50 signals contraction, while a reading above that level indicates expansion. The Caixin PMI is a private survey focused on smaller businesses & offers a first glimpse into the operating environment. It is closely watched as an alternative to the official PMI. "Domestic manufacturing demand improved significantly, and foreign demand was not deteriorating as quickly as last year," the CEBM Group, a subsidiary of Caixin, said. Still, new export orders slipped back into contractionary territory. The results of the private survey came on the heels of official PMI China released yesterday which showed manufacturing activity fell for the 3rd straight month, dropping to 49.2 in Feb from 49.5 in Jan, according to data released by the country's National Bureau of Statistics. The official manufacturing gauge also hit a 3-year low. The 2 surveys offered mixed signals about the strength of the manufacturing cycle in Feb as the private poll offered some hope that there was uptick in activity from the month before.
Chinese manufacturing shrinks for third straight month in February, survey shows
Buyers came out in force at the opening, hoping to reverse recent sluggishness in the stock market. But they gave up quickly & selling has pared early gains. More so-so economic data, & that's being kind, is weighing on the minds of traders. Currently, the Dow is trying to hold above the 26K level, a key psychological floor.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 57.29 | +0.07 | +0.1% |
| GC=F | Gold | 1,311.20 | -4.90 | -0.4% |
Stocks are posting gains to start the new month on optimism about a US-China trade deal. The major averages finished Feb higher, with the Dow, S&P & NAZ up 3 of the last 4 months. Trade negotiators are reportedly preparing a
final deal between the US & China, which could be signed in the
coming weeks. Treasury
Secretary Steve Mnuchin said that a 150-page document is being
readied, but cautioned there's "more work to do." In Asian markets, China's Shanghai
closed up 1.8%, but rose 6.8% for the biggest weekly gain
in 4 years. Hong Kong's Hang Seng added 0.5% for the day &
Japan's Nikkei added 1% for the session & 0.8% for a 3rd weekly gain. In Europe, London's FTSE was higher by 0.5%, Germany’s DAX jumped 1.2% & France's CAC added 0.6%.
Stocks come into March roaring like a lion
US manufacturing activity expanded at a slower-than-expected pace last month & reached its lowest level in more than 2 years. The ISM Manufacturing Index slipped to 54.2 in Feb from 56.6 in Jan, the Institute for Supply Management said. The forecast called for the index to slip to 55.5 in Feb. The index's print was also the weakest since Nov 2016. A decline in new orders, production, employment & prices all contributed to the broader index's decline. "Comments from the panel reflect continued expanding business strength, supported by notable demand and output, although both were softer than the prior month," Timothy Fiore, chair of the Institute for Supply Management, said. "Consumption (production and employment) continued to expand but fell a combined 8.9 points from the previous month's levels."
ISM manufacturing index hits lowest level since November 2016
A surprise jump in business spending boosted Q4 growth to 2.6%, but economists say Q1 could expand at ½ that pace due to the gov shutdown & a sluggish consumer. Q4 GDP topped the 2.3% expected, due in part to a 6.7% increase in equipment spending & a 13.1% jump in intellectual property, which includes software. The pickup was a surprise after weak durable goods spending data in the qtr. While business expenditures look better, the sharp drop in retail sales in Dec could signal a weaker consumer at the start of the year. That will make for a tougher comparison, & even before the Q4 report, economists were looking for Q1 growth below 2% with a pickup in H2. Consumers at the end of 2018 were facing the stock market's sharp holiday season decline, the prospect of a gov shutdown & rising interest rates. The gov remained shutdown for most of Jan, but consumers are now showing signs of a rebound with an unexpected jump in consumer confidence in Feb. The Bureau of Economic Analysis said 2018 growth was 2.9%, a calculation derived by averaging growth in each qtr, but economists who measure growth on a Q4-over-Q4 basis say growth was 3.1% for 2018, up from 2.5% for 2017. By either measure, the growth rate was close to the 3% the Trump administration promised would be generated by its economic policies. But H1-2019 already looks to be well below that pace, even if Q2 picks back up, as expect. The final GDP number for Q4 will be released on Mar 28 & it could be revised in either direction. The pickup in business spending, therefore, is critical. If it continues, it could dispel some doubts that corps are not using tax proceeds for investment but for things like stock buybacks & divs. It also suggests there may have been less delayed spending because of uncertainty surrounding trade.
Trump got a strong economy in 2018, but first quarter of this year looks weak
A private survey on China's manufacturing sector showed that factory activity shrank for a 3rd straight month in Feb. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) came in at 49.9 for Feb — higher than Jan's reading of 48.3 & better than the 48.5 that was expected. However, it showed that manufacturing activity remained around contractionary levels not seen since early 2016. A reading below 50 signals contraction, while a reading above that level indicates expansion. The Caixin PMI is a private survey focused on smaller businesses & offers a first glimpse into the operating environment. It is closely watched as an alternative to the official PMI. "Domestic manufacturing demand improved significantly, and foreign demand was not deteriorating as quickly as last year," the CEBM Group, a subsidiary of Caixin, said. Still, new export orders slipped back into contractionary territory. The results of the private survey came on the heels of official PMI China released yesterday which showed manufacturing activity fell for the 3rd straight month, dropping to 49.2 in Feb from 49.5 in Jan, according to data released by the country's National Bureau of Statistics. The official manufacturing gauge also hit a 3-year low. The 2 surveys offered mixed signals about the strength of the manufacturing cycle in Feb as the private poll offered some hope that there was uptick in activity from the month before.
Chinese manufacturing shrinks for third straight month in February, survey shows
Buyers came out in force at the opening, hoping to reverse recent sluggishness in the stock market. But they gave up quickly & selling has pared early gains. More so-so economic data, & that's being kind, is weighing on the minds of traders. Currently, the Dow is trying to hold above the 26K level, a key psychological floor.
Dow Jones Industrials
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