Dow dropped 237, decliners over advancers 2-1 & NAZ lost 66. The MLP index added 3+ to the 249s & the REIT index puled back 1+ to the 365s. Junk bond funds were sold & Treasuries went up in price while stock declined. Oil climbed higher in the 56s & gold was about even at 1287.
AMJ (Alerian MLP Index tracking fund)
Stocks fall as ECB slashes growth forecasts
The € fell sharply against the $ after the ECB unveiled a series of market-friendly policies amid a slew of rising risks. The euro zone's central bank slashed its growth forecast for 2019 to 1.1% from an earlier forecast of 1.7% made in Dec. ECB Pres Mario Draghi said that there had been a "sizable moderation in economic expansion that will extend into the current year." "The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment," Draghi said. The 19-member region has been overshadowed by political developments in Italy, which entered a technical recession at the end of 2018 & the UK, where its departure from the EU has yet to be finalized. There are also concerns about a potential slowdown in the Chinese economy, given its reliance on exports to the country. Recent manufacturing data have also indicated weaker activity, especially in Germany, the traditional growth engine of the region. "The impact of these factors is turning out to be somewhat longer-lasting, which suggests that the near-term growth outlook will be weaker than previously anticipated," Draghi also said. Given the worsening economic conditions, the ECB also lowered its inflation forecasts for 2019. Annual inflation is set to hit 1.2% this year. The Dec forecasts had pointed to a headline inflation target of 1.6%. The central bank is positive that its new set of measures will help bring inflation closer to its target of "close but below 2 percent." The ECB's interest rates remain at record lows & are set to remain at these levels at least until the end of the year. The central bank also announced a fresh set of loans to euro banks, aimed at boosting the real economy.
Euro sinks as ECB slashes growth forecasts and warns of the ‘threat of protectionism’
The US and China are reaching greater mutual understanding on trade, says ex-Beijing official
The number of people who applied for unemployment benefits in early Mar fell slightly, keeping jobless claims near the lowest levels in a ½-century. Jobless claims, a rough measure of layoffs, fell 3K to 223K last week. The forecast called for a 225K reading. The number of people already collecting unemployment benefits (continuing claims) declined 50K to 1.76M. The number of layoffs in the economy is still extremely low, but they no longer appear to be falling. New claims had sunk to as low as 200K in early Jan & continuing claims bottomed out at a 46-year trough of 1.64M last fall. The US economy slowed toward the end of 2018 & got off to a sluggish start in the new year, hurt by the partial gov shutdown & a festering trade dispute with China. Growth is likely to pick up in the spring, but probably not as rapidly as it did last year. The early effects of the Trump tax cuts have faded & a global economic slowdown is another headwind.
The Dow has fallen 600 in the last 4 trading days. The reality of so-so economic data & an uncertain trade deal is getting thru to traders. At the same time, the VIX (volatility index) has jump up from the mid 13s to mid 17s, a very big move. Risk is viewed as a negative today. The rally for 2019 which has pretty much gone straight up has stumbled & more selling may lie ahead. However the bulls will point to the Dow is still within 1400 of setting a new record.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 56.32 | +0.10 | +0.2% |
| GC=F | Gold | 1,285.80 | -1.80 | -0.1% |
Stocks dropped after the ECB slashed its growth & inflation forecasts for 2019 & lowered 2020 & 2021 as well.
that raised concerns about the economic slowdown. The central bank also prepared new measures to stimulate the eurozone's economy. Earlier, stock futures were boosted by the ECB leaving its interest
rates unchanged & delaying its first post-crisis rate hike to next
year. In Europe, London's FTSE slipped 0.4%, Germany's DAX was off 0.3% & France's CAC fell 0.2%. In
Asia, China's Shanghai Composite inched higher, Hong
Kong's Hang Seng fell 0.9% & Japan's Nikkei ended the day down 0.7%. The number of Americans filing applications for unemployment benefits unexpectedly fell last week by 3K to a seasonally adjusted 223K. This comes ahead of tomorrow's big monthly jobs report. The forecast is calling for 180K workers to have been added to payrolls in Feb, which & would
be down from the 304K added in Jan & the unemployment rate may
slip to 3.9% from the uptick in the prior month to 4%.
Stocks fall as ECB slashes growth forecasts
The € fell sharply against the $ after the ECB unveiled a series of market-friendly policies amid a slew of rising risks. The euro zone's central bank slashed its growth forecast for 2019 to 1.1% from an earlier forecast of 1.7% made in Dec. ECB Pres Mario Draghi said that there had been a "sizable moderation in economic expansion that will extend into the current year." "The persistence of uncertainties related to geopolitical factors, the threat of protectionism and vulnerabilities in emerging markets appears to be leaving marks on economic sentiment," Draghi said. The 19-member region has been overshadowed by political developments in Italy, which entered a technical recession at the end of 2018 & the UK, where its departure from the EU has yet to be finalized. There are also concerns about a potential slowdown in the Chinese economy, given its reliance on exports to the country. Recent manufacturing data have also indicated weaker activity, especially in Germany, the traditional growth engine of the region. "The impact of these factors is turning out to be somewhat longer-lasting, which suggests that the near-term growth outlook will be weaker than previously anticipated," Draghi also said. Given the worsening economic conditions, the ECB also lowered its inflation forecasts for 2019. Annual inflation is set to hit 1.2% this year. The Dec forecasts had pointed to a headline inflation target of 1.6%. The central bank is positive that its new set of measures will help bring inflation closer to its target of "close but below 2 percent." The ECB's interest rates remain at record lows & are set to remain at these levels at least until the end of the year. The central bank also announced a fresh set of loans to euro banks, aimed at boosting the real economy.
Euro sinks as ECB slashes growth forecasts and warns of the ‘threat of protectionism’
The US & China are reaching greater consensus on trade issues, a former official at the Chinese commerce ministry said. "Within the last nine months, we had
three rounds of consultations; I think we have more and more consensus
about it," said Jin Xu, a former senior commerce ministry official. Jin
was also previously a diplomat to the US, UK & Turkey. According to leakers, DC & Beijing are approaching the finish
line on trade negotiations that could end later this month. "Both countries agree to have
more and more mutual understanding and also want to build much better
relations for business people for the two countries," Jin added. "If we have more and more
consensus, the world will benefit from it," said Jin, emphasizing that
China is the world's largest developing country & the US is the
world's largest developed country. Jin, who is now the
chairman of China Intl Trade Association, said he was hopeful
for a positive outcome from the talks & that China will make policy
adjustments accordingly. China is currently in the midst of a 2-week annual parliamentary meeting, the National People's Congress, which kicked off on Tues & ends next Fri (Mar 5-15). At the opening,
Premier Li Keqiang said the Chinese economy will likely slow this year, & revealed that the official economic growth target for 2019 will be
6-6.5%. That compares to an expansion of 6.6% in 2018 — its slowest growth since 1990. Li also said the
country's months-long tariff war with the US has hurt business
activities, but he reiterated Beijing's commitment to "safeguarding
economic globalization" & pledged to promote China-US trade
negotiations while advancing negotiations on other trade agreements.
The US and China are reaching greater mutual understanding on trade, says ex-Beijing official
The number of people who applied for unemployment benefits in early Mar fell slightly, keeping jobless claims near the lowest levels in a ½-century. Jobless claims, a rough measure of layoffs, fell 3K to 223K last week. The forecast called for a 225K reading. The number of people already collecting unemployment benefits (continuing claims) declined 50K to 1.76M. The number of layoffs in the economy is still extremely low, but they no longer appear to be falling. New claims had sunk to as low as 200K in early Jan & continuing claims bottomed out at a 46-year trough of 1.64M last fall. The US economy slowed toward the end of 2018 & got off to a sluggish start in the new year, hurt by the partial gov shutdown & a festering trade dispute with China. Growth is likely to pick up in the spring, but probably not as rapidly as it did last year. The early effects of the Trump tax cuts have faded & a global economic slowdown is another headwind.
Jobless claims dip to 223,000 in early March, reinforcing signs of strong labor market
The Dow has fallen 600 in the last 4 trading days. The reality of so-so economic data & an uncertain trade deal is getting thru to traders. At the same time, the VIX (volatility index) has jump up from the mid 13s to mid 17s, a very big move. Risk is viewed as a negative today. The rally for 2019 which has pretty much gone straight up has stumbled & more selling may lie ahead. However the bulls will point to the Dow is still within 1400 of setting a new record.
Dow Jones Industrials
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