Dow dropped 302, decliners over advancers 3-1 & NAZ gave back 106. The MLP index fell 3+ to the 255s & the REIT index jumped up 6+ to the 377s. Junk bond funds were mixed & Treasuries had a rally, taking the yield on the 10 year bond down to 2.44%. Oil fell 1 to the 58s & gold added 5 to 1312.
AMJ (Alerian MLP Index tracking fund)
Pres Trump said that while Federal Reserve policies have impeded economic growth, the nation's financial status continues to outpace its global counterparts. “The world is slowing, but we’re not slowing,” Trump said during an interview. “And frankly, if we didn't have somebody that would raise interest rates and do quantitative tightening, we would have been at over 4 [percent] instead of at 3.1 [percent].” The pres has been a harsh critic of the central bank for being too aggressive on interest rate hikes. On Wed the Fed voted to hold the benchmark federal funds rate steady. The FOMC unanimously agreed to keep interest rates unchanged at 2.25-2.5%. The policy setting board also signaled it won’t see any future rate hikes this year, a move Trump denies may have been influenced by his outspoken criticism of the Fed. “I hope I didn't influence, frankly, but it doesn't matter. I don't care if I influenced or not,” he said. “One thing, I was right. But we would be over four [percent] if they didn't do all of the interest rate hikes, and they tightened. They did $50 billion a month. I said, ‘What are we doing here?’” The administration's policies on tax cuts, deregulation & trade reform have generated a booming economy, according to the White House. More than 5.3M jobs have been created since Trump's election. The ongoing trade war between China & the US has taken its toll on both economies. Top US trade & economic officials are headed to Beijing this weekend for another round of negotiations. Trump has imposed US tariffs on $250B of Chinese exports & warns that tariffs are going to stay in place for “a substantial period of time.” However, the pres said keeping tariffs in place won't be a snag on the current trade negotiations with China. “I think a lot of people are waiting for the deal with China. I think that’s going to have a very bit impact, maybe bigger than people know,” Trump said. “As to whether or not it makes it, I think it will. I think we’re getting very close. That doesn’t mean we get there, but I think we’re getting very close.” The Commerce Dept is looking at imported cars & auto parts to determine whether or not they pose a national security risk. “Well, no,” Trump said when asked if foreign-made cars & auto parts pose a national security threat. “What poses a national security risk is our balance sheet. We have to have -- we need a strong balance sheet. Otherwise you don’t have national security.” Trump also noted that the EU has treated America as badly as China, costing the US $150B a year over the course of the last 5-7 years. “They don’t take our product. They tax us tremendously. They tariff us tremendously. Almost every country has taken advantage of the United States -- and we’re straightening it out,” he added.
Germany's 10-year gov bond yields slipped into negative territory for the first time since Oct 2016. Hitting a low of -0.001%, the 10-year bond yield's downturn comes amid rising concern about the direction of the euro zone's largest economy, with a string of weak data in recent months fueling speculation that Germany could be heading for recession. IHS Markit's PMI survey published today revealed that Germany's manufacturing sector contracted for the 3rd consecutive month in Mar, with output growth nearing a 6-year low. German gov 10-year bond, an important benchmark for European fixed income assets, is viewed as a safe-haven for investors. In times of uncertainty & challenging market environment, investors tend to move their investments from riskier assets into safe-havens like gold & German gov bonds. The bond yields hitting negative territory shows there is a rising demand for the 10-year paper due to the ongoing uncertainty in the euro zone economy being fueled from a slowdown in Germany, a deadlock among politicians on Brexit among others. Meanwhile, data from Germany's federal statistics office in Feb showed that the country narrowly avoided a recession in Q4, with the economy growing 0.0+% from the prior qtr. In Jan, German GDP grew 1.5% in 2018, compared with 2.2% growth in 2017. Although it was Germany's weakest growth in 5 years, the statistics office noted that the economy had still grown for the 9th year in a row. Adding to the slowdown in Germany is the uncertainty surrounding Britain's exit from the EU. In the latest, the EU agreed to an extension to the date of the UK's withdrawal from the bloc, but said the length of the delay would depend on whether Parliament approves Prime Minister Theresa May's Brexit deal next week.
German 10-year bond yield turns negative for first time since 2016 amid fears of a recession
Existing-home sales ran at a 5.51M seasonally-adjusted annual rate in Feb, the National Association of Realtors said. That was an increase of 11.8% for the month. Sales of previously-owned homes shook off the winter blahs as mortgage rates remained subdued, incomes kept growing & more inventory helped the housing market regain some balance. The month-over-month increase was the biggest since Dec 2015, when sales rebounded after a regulation-induced slump. It handily beat the forecast of a 5.12M pace. The Feb pace of sales was 1.8% lower than a year ago & the median sales price during the month was $249K, 3.6% higher compared to a year ago. First-time buyers accounted for 32% of sales in Feb, still well below their long-time average of 40% & making zero progress since the crisis. A little more inventory is helping, as are tame mortgage rates &, perhaps, a little more certainty about personal tax situations. Still, the housing market remains very constrained. At the current pace of sales, it would take 3.5 months to exhaust available supply, & demand remains clearly very strong. The long-term average has been 6 months. Sales in the Northeast were unchanged compared to Jan, while they were 9.5% higher in the Midwest. In the South, sales surged 14.9%, & in the West, they were 16% higher.
Sellers came out in force as negative thoughts dominate thinking today. There are an abundance of problems, with a growing feeling by investors that economic growth will continue to slow. The Dow stumbled once again when it failed to crack thru the 26K ceiling on the Dow. As I write, continued selling is dragging the Dow even lower. Money raised by selling stocks is being reinvested in safe haven investments, gold & Treasuries.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 58.73 | -1.25 | -2.1% |
| GC=F | Gold | 1,313.50 | +6.20 | +0.5% |
Stocks traded lower following weak economic data from Europe. Preliminary surveys showed that manufacturing in Germany, France & the wider eurozone had slowed in Mar. News that the EU offered to only briefly extend the Brexit deadline added to uncertainty. EU leaders have agreed to delay Brexit until May 22, the eve of the
EU elections, instead of next Fri as previously planned. The preliminary Markit manufacturing purchasing
managers' index for Germany fell to 44.7
in Mar from 47.6 in the previous month. In France, the reading fell to
49.8 from 51.5 in Feb & a similar report for the wider eurozone
also retreated to 47.6 from 49.3. Readings for services in all 3 surveys fell, also. Numbers below 50 indicate contraction on the index's 100-point scale. US & Chinese officials will meet in Beijing next Thurs & Fri for
high-level trade talks, aimed at ending a tariffs battle between the
world's 2 biggest economies. Asian
indices reversed early losses on optimism surrounding the talks. The
Shanghai Composite index finished up a smidgen, Hong Kong's Hang
Seng also inched higher & Japan's Nikkei 225 index, reopening after a
market holiday, edged slightly higher. In Europe, London's FTSE shed 0.8%, Germany's DAX lost 0.6% & France's CAC gave up 0.8%.
US stocks lower on global growth worries
Pres Trump said that while Federal Reserve policies have impeded economic growth, the nation's financial status continues to outpace its global counterparts. “The world is slowing, but we’re not slowing,” Trump said during an interview. “And frankly, if we didn't have somebody that would raise interest rates and do quantitative tightening, we would have been at over 4 [percent] instead of at 3.1 [percent].” The pres has been a harsh critic of the central bank for being too aggressive on interest rate hikes. On Wed the Fed voted to hold the benchmark federal funds rate steady. The FOMC unanimously agreed to keep interest rates unchanged at 2.25-2.5%. The policy setting board also signaled it won’t see any future rate hikes this year, a move Trump denies may have been influenced by his outspoken criticism of the Fed. “I hope I didn't influence, frankly, but it doesn't matter. I don't care if I influenced or not,” he said. “One thing, I was right. But we would be over four [percent] if they didn't do all of the interest rate hikes, and they tightened. They did $50 billion a month. I said, ‘What are we doing here?’” The administration's policies on tax cuts, deregulation & trade reform have generated a booming economy, according to the White House. More than 5.3M jobs have been created since Trump's election. The ongoing trade war between China & the US has taken its toll on both economies. Top US trade & economic officials are headed to Beijing this weekend for another round of negotiations. Trump has imposed US tariffs on $250B of Chinese exports & warns that tariffs are going to stay in place for “a substantial period of time.” However, the pres said keeping tariffs in place won't be a snag on the current trade negotiations with China. “I think a lot of people are waiting for the deal with China. I think that’s going to have a very bit impact, maybe bigger than people know,” Trump said. “As to whether or not it makes it, I think it will. I think we’re getting very close. That doesn’t mean we get there, but I think we’re getting very close.” The Commerce Dept is looking at imported cars & auto parts to determine whether or not they pose a national security risk. “Well, no,” Trump said when asked if foreign-made cars & auto parts pose a national security threat. “What poses a national security risk is our balance sheet. We have to have -- we need a strong balance sheet. Otherwise you don’t have national security.” Trump also noted that the EU has treated America as badly as China, costing the US $150B a year over the course of the last 5-7 years. “They don’t take our product. They tax us tremendously. They tariff us tremendously. Almost every country has taken advantage of the United States -- and we’re straightening it out,” he added.
Trump EXCLUSIVE: US economic growth hindered by Fed rate hikes
Germany's 10-year gov bond yields slipped into negative territory for the first time since Oct 2016. Hitting a low of -0.001%, the 10-year bond yield's downturn comes amid rising concern about the direction of the euro zone's largest economy, with a string of weak data in recent months fueling speculation that Germany could be heading for recession. IHS Markit's PMI survey published today revealed that Germany's manufacturing sector contracted for the 3rd consecutive month in Mar, with output growth nearing a 6-year low. German gov 10-year bond, an important benchmark for European fixed income assets, is viewed as a safe-haven for investors. In times of uncertainty & challenging market environment, investors tend to move their investments from riskier assets into safe-havens like gold & German gov bonds. The bond yields hitting negative territory shows there is a rising demand for the 10-year paper due to the ongoing uncertainty in the euro zone economy being fueled from a slowdown in Germany, a deadlock among politicians on Brexit among others. Meanwhile, data from Germany's federal statistics office in Feb showed that the country narrowly avoided a recession in Q4, with the economy growing 0.0+% from the prior qtr. In Jan, German GDP grew 1.5% in 2018, compared with 2.2% growth in 2017. Although it was Germany's weakest growth in 5 years, the statistics office noted that the economy had still grown for the 9th year in a row. Adding to the slowdown in Germany is the uncertainty surrounding Britain's exit from the EU. In the latest, the EU agreed to an extension to the date of the UK's withdrawal from the bloc, but said the length of the delay would depend on whether Parliament approves Prime Minister Theresa May's Brexit deal next week.
German 10-year bond yield turns negative for first time since 2016 amid fears of a recession
Existing-home sales ran at a 5.51M seasonally-adjusted annual rate in Feb, the National Association of Realtors said. That was an increase of 11.8% for the month. Sales of previously-owned homes shook off the winter blahs as mortgage rates remained subdued, incomes kept growing & more inventory helped the housing market regain some balance. The month-over-month increase was the biggest since Dec 2015, when sales rebounded after a regulation-induced slump. It handily beat the forecast of a 5.12M pace. The Feb pace of sales was 1.8% lower than a year ago & the median sales price during the month was $249K, 3.6% higher compared to a year ago. First-time buyers accounted for 32% of sales in Feb, still well below their long-time average of 40% & making zero progress since the crisis. A little more inventory is helping, as are tame mortgage rates &, perhaps, a little more certainty about personal tax situations. Still, the housing market remains very constrained. At the current pace of sales, it would take 3.5 months to exhaust available supply, & demand remains clearly very strong. The long-term average has been 6 months. Sales in the Northeast were unchanged compared to Jan, while they were 9.5% higher in the Midwest. In the South, sales surged 14.9%, & in the West, they were 16% higher.
Existing-home sales roar back in February, hitting an 11-month high
Sellers came out in force as negative thoughts dominate thinking today. There are an abundance of problems, with a growing feeling by investors that economic growth will continue to slow. The Dow stumbled once again when it failed to crack thru the 26K ceiling on the Dow. As I write, continued selling is dragging the Dow even lower. Money raised by selling stocks is being reinvested in safe haven investments, gold & Treasuries.
Dow Jones Industrials
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