Dow shot up 200 (closing at the highs), advancers over decliners better than 3-1 & NAZ soared 149. The MLP index gained 4 to the 252s & the REIT index was steady in the 365s. Junk bond funds edged higher & Treasuries were weak today. Oil continued in the high 56s & gold fell 6 to 1292 (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)
Jerome Powell, the head of the Federal Reeerve, says he does not see a recession hitting the US economy anytime soon. “The outlook for our economy, in my view, is a favorable one,” Powell said. “It's a positive one. I think growth this year will be slower than last year. Last year was the highest growth that we've experienced since the financial crisis, really in more than 10 years. This year, I expect that growth will continue to be positive and continue to be at a healthy rate.” Powell said that the economy was in a good place right now & was asked if the central bank was done raising interest rates. "Inflation is muted and our policy rate we think is in an appropriate place. So what we've said is that we would be patient as we watch to see how global economic conditions evolve and how our own economy evolves." During the Fed's period of raising interest rates, Pres Trump criticized Powell & the central bank for making moves that would slow the economy. Powell said the pause in hikes has nothing to do with the Trump's comments. "We will never, ever take political considerations into effect," said Powell. "This is a strong institution, which has a strong culture, which is as I've described it." Powell said that he doesn't comment on the pres or elected officials & when asked if the pres could fire him, he said the law is clear. "I have a four-year term and I fully intend to serve it," said Powell. Powell was asked about the impact that slowing growth in China is having & how concerned he is about it. "If it slows down the global economy, then we'll feel that as a headwind," said Powell. "So, we don't actually believe that very negative outcomes are the most likely outcomes there. The Chinese authorities have been deploying many measures to support growth in China." This past weekend was the 10th anniversary of the bull market that has seen stocks soar since the financial crisis.
Business inventories in the US rose 0.6% in Dec, the Commerce Dept said. Sales fell 1% in the month, however. The ratio of inventories to sales climbed to 1.38 from 1.36. That's how many months it would take to sell all the inventory on hand. One year ago, the inventory-to-sales ratio was lower at 1.34. An increase in inventories adds to GDP & is usually a sign of an expanding economy, but when sales are falling, it could mean that companies have overproduced & slower economic growth could be ahead. Inventories in Nov were revised to show no change instead of a 0.1% decline.
Oil futures marked their highest settlement so far in Mar, finding support from reports that Saudi Arabia planned to extend efforts to reduce crude exports. Apr West Texas Intermediate crude rose 72¢ (1.3%) to settle at $56.79 a barrel, after prices went up 0.5% last week. Global benchmark May Brent crude gained 84¢ (1.3%) to $66.58 a barrel, after the contract registered a weekly rise of 1% on Fri. Both front-month crude benchmarks ended the session at their highest levels this month so far. Riyadh's oil minister in reporting that Saudi Arabia plans to cut its oil exports to below 7M barrels a day, while keeping its output “well below” 10M barrels a day, in an attempt to alleviate a glut of supply. Saudi Energy Minister Khalid al-Falih said that it would be too early to change a production curb pact agreed by OPEC & its allies, which includes Russia, another major producer, before Jun. The Joint Ministerial Monitoring Committee (JMMC) which monitors compliance with output reductions, is scheduled to meet on Mar 18. OPEC's next scheduled meeting will be held Apr 17-18. Reports also say the group will again meet in late Jun to discuss production levels. “We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward,” Falih said. So far, Saudi Arabia, OPEC's de facto leader, has shouldered most of the burden of trimming output to boost crude prices. Contributing further support to oil prices today, OPEC member Venezuela's main oil export terminal & crude processing complex have been shut down as a result of power outages in the country that began on Thurs.
Gold futures finished lower, pulling back after bullion failed to settle above the psychologically significant $1300 mark despite a rally late last week. Better-than-expected US retail sales & business inventories data, which helped provide a boost to US benchmark stock indices, also put pressure on haven gold today. Business inventories rose 0.6% in Dec, while retail sales rebounded by 0.2% in Jan, after tumbling by a revised 1.6% a month earlier. Apr gold shed $8 (0.6%) to settle at $1291 an ounce after trading as high as $1299 during the session. Bullion rose 1% on Fri & briefly exceeded $1300. That capped a volatile week that saw the most-active contract finish little changed from the week-ago settlement. Strategists say gold may be retreating as investors shrink flows into gold exchange-traded funds, like the SPDR Gold Shares (GLD) which traded 0.7% lower today. Holdings in gold-backed ETFs & similar products fell in Feb, after 4 straight months inflows. Bullion's gains on Fri had followed an employment report that showed the weakest job creation in the US in 17 months. Despite that, Federal Reserve Chariman Jerome Powell said the domestic economy has seen a “bit of slowing, but still to healthy levels” this year. He also said “we don’t feel any hurry to change our interest rate policy.” It was reported that investors dumped gold ahead of the jobs report, resulting in bullish hedge-fund bets on bullion being slashed by 54% to 48K futures & options contracts in the week ended Mar 5. Meanwhile, bets that gold’s price would decline jumped the most since Jul.
The White House said the trade talks with China are "ongoing." That's some degree of comfort. Dow stock Boeing (BA) finished down 22 which cost the Dow more than 100 (down a massive 67 in.early AM trading). The chart below shows that the Dow was oversold short term & bargain hunters returned. But its future is unclear with so much going on (starting with China trade talks). Meanwhile the bulls are happy to see it is within about 1K of setting a new record.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Pres Trump released his fiscal 2020 budget, which,
among a number of other things, called for reforming the country's
welfare programs. Trump's blueprint
strengthens work requirements for social programs designed to help
lower-income Americans – like the Supplemental Nutrition Assistance
Program (SNAP, also referred to as food stamps), Medicaid & housing
assistance. Trump's blueprint aims to strengthen work
requirements for social programs designed to help lower-income Americans
– i.e. SNAP, Medicaid & housing assistance. Able-bodied
individuals 18-65 will generally be required to
work at least 20 hours per week in order to receive assistance, or be
engaged in job training or community service, according to senior
administration officials. The proposal does contain a hardship exemption, White House officials said. Concerning Medicaid specifically, the pres wants to return the program to a
“sustainable fiscal path” by instituting finance reform. That includes
implementing a per capita cap or block grant. Crop insurance would also be reduced. Additionally, the pres wants to continue his America's Harvest Box proposal,
which is a potential SNAP replacement that would provide boxes of
nonperishable food items grown by US farmers in place of some of their
SNAP aid. Overall welfare reform efforts are expected to generate $327B in revenue over the course of 10 years. The
pres had backed a Rep-led effort to include stricter SNAP
work requirements in a massive farm bill passed last year. However, the
issue became a sticking point during Senate negotiations & was
ultimately omitted from the final legislation. Trump
signed an exec order last year focusing on ways to beef up SNAP
work requirements. Since the beginning of 2018, states have been allowed
to implement a work requirement for Medicaid. The
budget calls for a 5% increase in military spending. Administration officials said the proposed budget, along with the last 2 budget proposals, contain more reductions in spending than any
pres has ever proposed. It includes trillions of dollars' worth of
spending reductions.
Trump 2020 budget calls for stricter work requirements, welfare reform
Jerome Powell, the head of the Federal Reeerve, says he does not see a recession hitting the US economy anytime soon. “The outlook for our economy, in my view, is a favorable one,” Powell said. “It's a positive one. I think growth this year will be slower than last year. Last year was the highest growth that we've experienced since the financial crisis, really in more than 10 years. This year, I expect that growth will continue to be positive and continue to be at a healthy rate.” Powell said that the economy was in a good place right now & was asked if the central bank was done raising interest rates. "Inflation is muted and our policy rate we think is in an appropriate place. So what we've said is that we would be patient as we watch to see how global economic conditions evolve and how our own economy evolves." During the Fed's period of raising interest rates, Pres Trump criticized Powell & the central bank for making moves that would slow the economy. Powell said the pause in hikes has nothing to do with the Trump's comments. "We will never, ever take political considerations into effect," said Powell. "This is a strong institution, which has a strong culture, which is as I've described it." Powell said that he doesn't comment on the pres or elected officials & when asked if the pres could fire him, he said the law is clear. "I have a four-year term and I fully intend to serve it," said Powell. Powell was asked about the impact that slowing growth in China is having & how concerned he is about it. "If it slows down the global economy, then we'll feel that as a headwind," said Powell. "So, we don't actually believe that very negative outcomes are the most likely outcomes there. The Chinese authorities have been deploying many measures to support growth in China." This past weekend was the 10th anniversary of the bull market that has seen stocks soar since the financial crisis.
Fed's Powell says no recession in US economy anytime soon
Business inventories in the US rose 0.6% in Dec, the Commerce Dept said. Sales fell 1% in the month, however. The ratio of inventories to sales climbed to 1.38 from 1.36. That's how many months it would take to sell all the inventory on hand. One year ago, the inventory-to-sales ratio was lower at 1.34. An increase in inventories adds to GDP & is usually a sign of an expanding economy, but when sales are falling, it could mean that companies have overproduced & slower economic growth could be ahead. Inventories in Nov were revised to show no change instead of a 0.1% decline.
U.S. business inventories rise 0.6% in December
Oil futures marked their highest settlement so far in Mar, finding support from reports that Saudi Arabia planned to extend efforts to reduce crude exports. Apr West Texas Intermediate crude rose 72¢ (1.3%) to settle at $56.79 a barrel, after prices went up 0.5% last week. Global benchmark May Brent crude gained 84¢ (1.3%) to $66.58 a barrel, after the contract registered a weekly rise of 1% on Fri. Both front-month crude benchmarks ended the session at their highest levels this month so far. Riyadh's oil minister in reporting that Saudi Arabia plans to cut its oil exports to below 7M barrels a day, while keeping its output “well below” 10M barrels a day, in an attempt to alleviate a glut of supply. Saudi Energy Minister Khalid al-Falih said that it would be too early to change a production curb pact agreed by OPEC & its allies, which includes Russia, another major producer, before Jun. The Joint Ministerial Monitoring Committee (JMMC) which monitors compliance with output reductions, is scheduled to meet on Mar 18. OPEC's next scheduled meeting will be held Apr 17-18. Reports also say the group will again meet in late Jun to discuss production levels. “We will see what happens by April, if there is any unforeseen disruption somewhere else, but barring this I think we will just be kicking the can forward,” Falih said. So far, Saudi Arabia, OPEC's de facto leader, has shouldered most of the burden of trimming output to boost crude prices. Contributing further support to oil prices today, OPEC member Venezuela's main oil export terminal & crude processing complex have been shut down as a result of power outages in the country that began on Thurs.
Oil logs March’s highest finish as Saudi signals near-term crude export reductions
Gold futures finished lower, pulling back after bullion failed to settle above the psychologically significant $1300 mark despite a rally late last week. Better-than-expected US retail sales & business inventories data, which helped provide a boost to US benchmark stock indices, also put pressure on haven gold today. Business inventories rose 0.6% in Dec, while retail sales rebounded by 0.2% in Jan, after tumbling by a revised 1.6% a month earlier. Apr gold shed $8 (0.6%) to settle at $1291 an ounce after trading as high as $1299 during the session. Bullion rose 1% on Fri & briefly exceeded $1300. That capped a volatile week that saw the most-active contract finish little changed from the week-ago settlement. Strategists say gold may be retreating as investors shrink flows into gold exchange-traded funds, like the SPDR Gold Shares (GLD) which traded 0.7% lower today. Holdings in gold-backed ETFs & similar products fell in Feb, after 4 straight months inflows. Bullion's gains on Fri had followed an employment report that showed the weakest job creation in the US in 17 months. Despite that, Federal Reserve Chariman Jerome Powell said the domestic economy has seen a “bit of slowing, but still to healthy levels” this year. He also said “we don’t feel any hurry to change our interest rate policy.” It was reported that investors dumped gold ahead of the jobs report, resulting in bullish hedge-fund bets on bullion being slashed by 54% to 48K futures & options contracts in the week ended Mar 5. Meanwhile, bets that gold’s price would decline jumped the most since Jul.
Gold finishes lower after failed attempt to reach the key $1,300 mark
The White House said the trade talks with China are "ongoing." That's some degree of comfort. Dow stock Boeing (BA) finished down 22 which cost the Dow more than 100 (down a massive 67 in.early AM trading). The chart below shows that the Dow was oversold short term & bargain hunters returned. But its future is unclear with so much going on (starting with China trade talks). Meanwhile the bulls are happy to see it is within about 1K of setting a new record.
Dow Jones Industrials
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