Dow dropped 141, decliners slightly ahead of advancers & NAZ crawled up 5. The MLP index added 1 to 257 & the REIT index lost 1+ to the 369s. Junk bond funds were higher & Treasuries jumped up in price, taking the yield on the 10 Year Treasury down to 2.53%. Oil rose 1+ to go over 60 & gold rose 7 to 1314 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Pres Trump says if the US gets a trade deal with China, tariffs could stay in place for some time to ensure Beijing "lives by the deal." Trump added that the White House was discussing keeping tariffs for a "substantial period of time," & that China has had "problems living by certain deals." Trump said administration officials are set to visit China for more negotiations, declaring the deal is "coming along nicely." Business lobbyists say a sticking point in the talks is what type of enforcement mechanism will be included. The Trump administration, they say, wants to have the option to impose tariffs on Chinese goods if China doesn't abide by the terms of the pact. The US also wants China to promise not to retaliate against those tariffs.
Top US CEOs reported that their economic outlook weakened in the first 3 months of the year although it remains above its historical average. The Business Roundtable, a lobbying organization of major companies' chief execs, also said its Q1 survey of CEOs showed strong support for Congress to create a new national law governing consumer data privacy. The group's economic outlook index for the Jan-Mar qtr fell to 95.2, down from 104.4 in Q4. The lower reading, however, far exceeded the index's historical average of 82.4 for the 9th straight qtr. The new survey showed that companies' plans for capital investment in the next 6 months fell 6.9 percentage points since Q4, while sales expectations dropped 9.6 percentage points. Hiring plans for the next 6 months showed an even more dramatic decrease of 11.3 percentage points. A slowdown in manufacturing & retail, sluggish housing & construction activity & global pressures, including an ongoing trade war with China, have dampened expectations for economic growth. Still, experts say, the economy remains on strong ground as its expansion. the 2nd-longest on record, continues. The economy, as measured by the GDP, grew 2.9% last year, the fastest pace since 2015. In the new survey, 80% of the CEOs said it was "somewhat" or "very" important for Congress to craft & enact a national data privacy law. As public concerns have risen over scandals & aggressive use of personal data at tech companies, European regulators have slapped huge penalties on US tech companies. California is putting in a tough measure, set to take effect next year, that will let the state's consumers request the data collected from them & opt out of future collection. The tech industry is pushing for what it sees as the lesser of the evils: a new federal privacy law that would be less stringent than California's & take national precedence over it. "This crazy patchwork quilt of different privacy regulations ... is a big impediment to business and to innovation," Josh Bolten, pres of the CEO organization said. The organization is proposing legislation that would establish a basic standard for users' individual privacy rights added give businesses a common set of rules, Bolten said.
Fed Chair Powell says Chinese and European economies have slowed ‘substantially’
Oil prices rose, with US crude topping $60 a barrel for the first time in about 4 months, after gov data showed the American stockpiles of crude oil & refined fuels plunged last week. WTI has rallied 32% this year after losing nearly ½ of its value in the final months of 2018. Brent is also up more than 27% year to date, boosted by production cuts from OPEC & US sanctions against Iran & Venezuela. West Texas Intermediate crude futures settled 80¢ higher at $59.83 per barrel, after earlier topping $60 & hitting its highest level since Nov 12. The more heavily traded WTI contract for May delivery peaked at $60.20 a barrel. Brent crude futures were up 87¢ (1.3%) at $68.48 a barrel. The intl benchmark for oil prices rose as high as $68.53, setting a new high going back to Nov 13. Crude stockpiles dropped by 9.6M barrels last week, the Energy Information Administration said. That compared with an estimate for a buildup of 309K barrels. Meanwhile gasoline inventories fell by 4.6M barrels, nearly twice the decline expected. Stocks of distillates, including diesel & heating oil, dropped by 4.1M barrels, almost 4 times bigger than the expected drawdown.
US crude rises 1.4%, settling at $59.83, after topping $60 for first time since November
Gold prices finished lower, giving back nearly all of their gain from a day earlier, then climbed in electronic trading, finding support as the $ weakened in the wake of the Federal Reserve's latest policy statement. The central bank left interest rates unchanged as expected & signaled no more interest-rate increases this year. Gold for April delivery was at $1315 in electronic trading shortly after the Fed news. The contract had lost $4 (0.4%) to settle at $1301, giving up nearly all of the $5 an ounce it gained a day earlier. The $, as measured by the ICE US Dollar Index turned lower, losing 0.5%. A weaker $ can boost investment interest in $-denominated prices of gold. The Fed signaled no further increase in interest rates this year & just one in 2020, gish growth according to its new ‘dot plot,’ & the bank said it would end its balance-sheet runoff by Sep. Earlier today, concerns about US-China trade talks had provided some support for the metal, though modest strength in the $ also kept pressure on prices.
The Dow jumped up 200 after the Fed announcement & then most of that advance was given back. At the close stocks were pretty much flattish with negative market breadth. The forecast for no rate hike was already baked into the market & 2nd thoughts about more sluggish growth around the world was not well received by investors. Meanwhile the trade talks continue to be stuck in the mud while Brexit is also going nowhere. And the Dow continues to be little changed from mid Feb. But gold & Treasuries have a lot of fans these days.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Federal Reservre voted to keep the benchmark federal funds rate
steady during its 2nd policy meeting of the year, also
signaling that there will be no hikes for the remainder of 2019. In
a move that was widely expected, policymakers at the central bank
unanimously agreed to leave interest rates unchanged in light of global
economic & financial developments, as well as muted inflation. “The Committee will be patient as it determines
what future adjustments to the target range for the federal funds rate
may be appropriate to support these outcomes,” the Fed said. It
marks a stark turn from its Dec meeting 3 months ago, when Fed
Chair Jerome Powell suggested there could be as many as 2 interest
rate hikes this year & one in 2020. Now, policymakers forecast one
rate hike in 2020 & none in 2021. In recent
months, Powell & the Fed have appeared to take a more dovish approach
to interest rates amid concerns about slowing global growth -- a result
of a more than year-long trade war between the US & China &
uncertainties about Brexit. "We
still see sustained expansion of economic activity, strong labor
conditions and inflation near 2 percent," Powell said during the Fed's
Jan meeting. "But the crosscurrents suggest a less favorable
outlook.”
Federal Reserve signals no interest rate hikes in 2019
Pres Trump says if the US gets a trade deal with China, tariffs could stay in place for some time to ensure Beijing "lives by the deal." Trump added that the White House was discussing keeping tariffs for a "substantial period of time," & that China has had "problems living by certain deals." Trump said administration officials are set to visit China for more negotiations, declaring the deal is "coming along nicely." Business lobbyists say a sticking point in the talks is what type of enforcement mechanism will be included. The Trump administration, they say, wants to have the option to impose tariffs on Chinese goods if China doesn't abide by the terms of the pact. The US also wants China to promise not to retaliate against those tariffs.
Trump says tariffs on China could stay to ensure compliance
Top US CEOs reported that their economic outlook weakened in the first 3 months of the year although it remains above its historical average. The Business Roundtable, a lobbying organization of major companies' chief execs, also said its Q1 survey of CEOs showed strong support for Congress to create a new national law governing consumer data privacy. The group's economic outlook index for the Jan-Mar qtr fell to 95.2, down from 104.4 in Q4. The lower reading, however, far exceeded the index's historical average of 82.4 for the 9th straight qtr. The new survey showed that companies' plans for capital investment in the next 6 months fell 6.9 percentage points since Q4, while sales expectations dropped 9.6 percentage points. Hiring plans for the next 6 months showed an even more dramatic decrease of 11.3 percentage points. A slowdown in manufacturing & retail, sluggish housing & construction activity & global pressures, including an ongoing trade war with China, have dampened expectations for economic growth. Still, experts say, the economy remains on strong ground as its expansion. the 2nd-longest on record, continues. The economy, as measured by the GDP, grew 2.9% last year, the fastest pace since 2015. In the new survey, 80% of the CEOs said it was "somewhat" or "very" important for Congress to craft & enact a national data privacy law. As public concerns have risen over scandals & aggressive use of personal data at tech companies, European regulators have slapped huge penalties on US tech companies. California is putting in a tough measure, set to take effect next year, that will let the state's consumers request the data collected from them & opt out of future collection. The tech industry is pushing for what it sees as the lesser of the evils: a new federal privacy law that would be less stringent than California's & take national precedence over it. "This crazy patchwork quilt of different privacy regulations ... is a big impediment to business and to innovation," Josh Bolten, pres of the CEO organization said. The organization is proposing legislation that would establish a basic standard for users' individual privacy rights added give businesses a common set of rules, Bolten said.
Survey: Top CEOs report weaker economic outlook for 1Q
Weakening Chinese & European economies are
acting as a deterrent to US growth, Federal Reserve Chairman Jerome
Powell said. Speaking just after the central bank decided to hold the line on interest rates this week & likely maintain that stance thru the year, Powell said
that an otherwise strong domestic picture is getting dented from
abroad. “Now we see a situation where the European economy has slowed
substantially and so has the Chinese economy, although the European
economy more,” he said. “Just as strong global growth was a tailwind, weaker global
growth can be a headwind to our economy.” The Fed reduced its outlook for GDP to 2.1% in 2019 from a 2.3% forecast in Dec. That
reduced estimate came as the policymaking FOMC
voted to keep the benchmark federal funds rate at 2.25 -2.5%. In its post-meeting statement, the
committee characterized the labor market as “strong” but said the
“growth of economic activity has slowed,” a U-turn from Jan when the
FOMC said activity “has been rising at a solid rate.” Powell said Fed members continue to see the basic picture in the US as good. “Our outlook is a positive one … FOMC participants continue to see
growth this year around 2 percent, just a bit below what we saw back in
the end of last year,” he said. “Part of that is seeing that underlying
economic fundamentals are still very strong. You have strong labor
markets by most measures, you have rising incomes, you’ve got very low
unemployment.”
Fed Chair Powell says Chinese and European economies have slowed ‘substantially’
Oil prices rose, with US crude topping $60 a barrel for the first time in about 4 months, after gov data showed the American stockpiles of crude oil & refined fuels plunged last week. WTI has rallied 32% this year after losing nearly ½ of its value in the final months of 2018. Brent is also up more than 27% year to date, boosted by production cuts from OPEC & US sanctions against Iran & Venezuela. West Texas Intermediate crude futures settled 80¢ higher at $59.83 per barrel, after earlier topping $60 & hitting its highest level since Nov 12. The more heavily traded WTI contract for May delivery peaked at $60.20 a barrel. Brent crude futures were up 87¢ (1.3%) at $68.48 a barrel. The intl benchmark for oil prices rose as high as $68.53, setting a new high going back to Nov 13. Crude stockpiles dropped by 9.6M barrels last week, the Energy Information Administration said. That compared with an estimate for a buildup of 309K barrels. Meanwhile gasoline inventories fell by 4.6M barrels, nearly twice the decline expected. Stocks of distillates, including diesel & heating oil, dropped by 4.1M barrels, almost 4 times bigger than the expected drawdown.
US crude rises 1.4%, settling at $59.83, after topping $60 for first time since November
Gold prices finished lower, giving back nearly all of their gain from a day earlier, then climbed in electronic trading, finding support as the $ weakened in the wake of the Federal Reserve's latest policy statement. The central bank left interest rates unchanged as expected & signaled no more interest-rate increases this year. Gold for April delivery was at $1315 in electronic trading shortly after the Fed news. The contract had lost $4 (0.4%) to settle at $1301, giving up nearly all of the $5 an ounce it gained a day earlier. The $, as measured by the ICE US Dollar Index turned lower, losing 0.5%. A weaker $ can boost investment interest in $-denominated prices of gold. The Fed signaled no further increase in interest rates this year & just one in 2020, gish growth according to its new ‘dot plot,’ & the bank said it would end its balance-sheet runoff by Sep. Earlier today, concerns about US-China trade talks had provided some support for the metal, though modest strength in the $ also kept pressure on prices.
Gold settles lower, then climbs as Fed signals no 2019 rate hikes
The Dow jumped up 200 after the Fed announcement & then most of that advance was given back. At the close stocks were pretty much flattish with negative market breadth. The forecast for no rate hike was already baked into the market & 2nd thoughts about more sluggish growth around the world was not well received by investors. Meanwhile the trade talks continue to be stuck in the mud while Brexit is also going nowhere. And the Dow continues to be little changed from mid Feb. But gold & Treasuries have a lot of fans these days.
Dow Jones Industrials
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