Dow dropped 68, decliners over advancers almost 3-2 & NAZ lost 36. The MLP index was off 1 to the 253s & the REIT index gained 3+ to the 378s for a new record, surpassing the 2016 highs. Junk bond funds crawled higher & Treasuries rose in p[rice bringing the yield on the 10 year Treasury down 4 basis points to 2.37%. Oil was lower in the 59s after a rise in inventories (more below) & gold was off 4 to 1311.
AMJ (Alerian MLP Index tracking fund)
US stocks search for direction following Wall Street rebound
The trade deficit between the US & its global partners dropped sharply in Jan to $51.1B as exports rebounded from a slowdown at the end of 2018, the Commerce Dept reported. The forecast called for the balance to fall to $57B in Jan, from the $59.9B recorded the previous month. The decline of 14.6% represented the sharpest drop since Mar 2018 & comes amid continued efforts by the Trump administration to level the playing field with China & other global partners. Exports rose to $207.3B, a $1.9B increase from Dec, while imports fell to $258.5B, off $6.8B. The goods deficit dropped 10% to $73.3B while the services surplus edged higher to $22.1B. China specifically represented a good chunk of the reduction in the trade balance shortfall, as the deficit decreased $5.5B to $33.2B as imports fell 12.2% to $40.8B. The 2 nations have been involved in a tariff battle as officials try to work out a long-range framework that opens up markets for US goods. Treasury Secretary Steve Mnuchin & Trade Representative Robert Lighthizer will begin additional negotiations with Chinese officials tomorrow. In addition to the shift on China, the balance with Canada went from a deficit of $700M to a surplus of $1.4B, though the shortfall with South Korea increased to $2.4B from $1.7B. At a product level, exports of soybeans increased by $900M, passenger cars rose by $700M & aircraft fell by $1.3B.
Despite rising concerns about growth this year, the CNBC All-America Economic Survey finds confidence in the economy holding up, dropping from the optimistic heights of last year but maintaining relatively strong levels. The survey of 800 across the country, with a margin of error of plus or minus 3.5 percentage points, shows ½ believe the economy is in excellent or good shape, unchanged from Q4 but down from 58% in Q3. The decline tracks the slowing of growth in the economy over the past year. Approval of Pres Trump's handling of the economy also ticked down for the 2nd straight qtr but remains positive. The poll was conducted Mar 18-21, before the summary of the Mueller report was made public. Overall, 47% approve of Trump's economic stewardship, down a point from last qtr, & 43% disapprove, up a point. Trump's net positive on the economy of 4 percentage points represents a drop from his net positive of 15 points registered in Jun, when more than ½ of the public approved of his handling of the economy & when growth was around 4%, nearly double the current rate. Trump's overall approval remains negative with just 40% approving of the job he is doing as pres & 49% disapproving. Both numbers are a bit worse than Q4 data but less negative than the worst numbers registered in Jun 2017. Economic optimism also took a hit, with 31% saying the economy will get better in the next year, unchanged from last qtr but down again from 36% in Q3. Despite the drop in views on the current & expected state of the economy, the levels remain high by historic standards & considerably above where they were before Trump took office. That is, there's been some decline, but much of the “Trump Bump” remains. The outlook for gains in housing & wages tells a similar story. 40% look for their wages to rise in the next year, down 2 points from last year's high, but up 4% from the 4 qtrs before the election. Optimism in the stock market follows a path more linked to the market's performance than the economy. The percentage of Americans saying now is a good time to invest in stocks jumped 3 points to 41% from Dec, while the percentage saying it’s a bad time to invest fell 6 points to 30%. But both remain worse than the Oct survey, taken when the market was near its all-time high. But in a potentially negative development for consumer spending, American views on the 2017 tax cut have not gotten better with time (as some tax experts & politicians predicted) & look to have grown a bit worse. Just 31% of Americans report they had more more take-home pay last year from the tax cuts, down from 34% in Jun. And just 21% say they have personally benefited from the tax measure while about 2/3 of Americans say large corps & the wealthy have benefited.
Optimism dips, but Americans still feel economy is in good shape under Trump: CNBC survey
The Energy Information Administration reported that US crude supplies unexpectedly rose by 2.8M barrels for the latest week. Analysts expected a fall of 2.2M, following 2 straight weeks of declines. The American Petroleum Institute on yesterday had reported an increase of 1.9M barrels, according to sources. Supplies of gasoline fell 2.9M barrels, while distillates declined 2.1M barrels last week, according to the EIA. Expectations were for supply declines of 3.6M barrels for gasoline & 800K barrels for distillates. May West Texas Intermediate crude was down 14¢ at $59.80 a barrel after trading at $59.93 before the data.
Stocks began the day higher, but the bears are selling. The story has not changed for weeks, the outlook for global economic growth is not clear. News on the US trade deficit while good still shows large deficits. The Dow has been holding up fairly well, although it remains down 1% in Mar. US-China trade talks resume tomorrow which may give stocks a lift.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 59.98 | +0.04 | +0.1% |
| GC=F | Gold | 1,312.10 | -2.90 | -0.2% |
Stocks bounced between gains & losses following a day in which equities rebounded from a beginning of the week selloff. Shares were mixed in Europe & Asia as
British lawmakers sought to end an impasse following the overwhelming
defeat of Prime Minister Theresa May's proposed plan for leaving the
EU. The debate over Brexit comes 2 days after
lawmakers wrested control of the parliamentary agenda away from the
gov amid concern over May's willingness to compromise. The
House of Commons was scheduled to debate today the various
alternatives for the split from the EU, after which lawmakers will be
asked to vote for all of the options they could accept. The most popular
ideas will move to a 2nd vote on Mon in hopes of finding one
option that can command a majority. In European trading, London's FTSE traded slightly lower, Germany's DAX was higher by 0.4% &
France's CAC was up 0.4%. In Asian markets, shares in China rose ahead of the resumption of trade talks with the US on Thurs in Beijing. China's
Shanghai Composite jumped 0.9%, Hong Kong's Hang Seng added 0.6% & Japan's Nikkei index fell 0.2%.
US stocks search for direction following Wall Street rebound
The trade deficit between the US & its global partners dropped sharply in Jan to $51.1B as exports rebounded from a slowdown at the end of 2018, the Commerce Dept reported. The forecast called for the balance to fall to $57B in Jan, from the $59.9B recorded the previous month. The decline of 14.6% represented the sharpest drop since Mar 2018 & comes amid continued efforts by the Trump administration to level the playing field with China & other global partners. Exports rose to $207.3B, a $1.9B increase from Dec, while imports fell to $258.5B, off $6.8B. The goods deficit dropped 10% to $73.3B while the services surplus edged higher to $22.1B. China specifically represented a good chunk of the reduction in the trade balance shortfall, as the deficit decreased $5.5B to $33.2B as imports fell 12.2% to $40.8B. The 2 nations have been involved in a tariff battle as officials try to work out a long-range framework that opens up markets for US goods. Treasury Secretary Steve Mnuchin & Trade Representative Robert Lighthizer will begin additional negotiations with Chinese officials tomorrow. In addition to the shift on China, the balance with Canada went from a deficit of $700M to a surplus of $1.4B, though the shortfall with South Korea increased to $2.4B from $1.7B. At a product level, exports of soybeans increased by $900M, passenger cars rose by $700M & aircraft fell by $1.3B.
US efforts to cut trade deficit show biggest win in almost a year
Despite rising concerns about growth this year, the CNBC All-America Economic Survey finds confidence in the economy holding up, dropping from the optimistic heights of last year but maintaining relatively strong levels. The survey of 800 across the country, with a margin of error of plus or minus 3.5 percentage points, shows ½ believe the economy is in excellent or good shape, unchanged from Q4 but down from 58% in Q3. The decline tracks the slowing of growth in the economy over the past year. Approval of Pres Trump's handling of the economy also ticked down for the 2nd straight qtr but remains positive. The poll was conducted Mar 18-21, before the summary of the Mueller report was made public. Overall, 47% approve of Trump's economic stewardship, down a point from last qtr, & 43% disapprove, up a point. Trump's net positive on the economy of 4 percentage points represents a drop from his net positive of 15 points registered in Jun, when more than ½ of the public approved of his handling of the economy & when growth was around 4%, nearly double the current rate. Trump's overall approval remains negative with just 40% approving of the job he is doing as pres & 49% disapproving. Both numbers are a bit worse than Q4 data but less negative than the worst numbers registered in Jun 2017. Economic optimism also took a hit, with 31% saying the economy will get better in the next year, unchanged from last qtr but down again from 36% in Q3. Despite the drop in views on the current & expected state of the economy, the levels remain high by historic standards & considerably above where they were before Trump took office. That is, there's been some decline, but much of the “Trump Bump” remains. The outlook for gains in housing & wages tells a similar story. 40% look for their wages to rise in the next year, down 2 points from last year's high, but up 4% from the 4 qtrs before the election. Optimism in the stock market follows a path more linked to the market's performance than the economy. The percentage of Americans saying now is a good time to invest in stocks jumped 3 points to 41% from Dec, while the percentage saying it’s a bad time to invest fell 6 points to 30%. But both remain worse than the Oct survey, taken when the market was near its all-time high. But in a potentially negative development for consumer spending, American views on the 2017 tax cut have not gotten better with time (as some tax experts & politicians predicted) & look to have grown a bit worse. Just 31% of Americans report they had more more take-home pay last year from the tax cuts, down from 34% in Jun. And just 21% say they have personally benefited from the tax measure while about 2/3 of Americans say large corps & the wealthy have benefited.
Optimism dips, but Americans still feel economy is in good shape under Trump: CNBC survey
The Energy Information Administration reported that US crude supplies unexpectedly rose by 2.8M barrels for the latest week. Analysts expected a fall of 2.2M, following 2 straight weeks of declines. The American Petroleum Institute on yesterday had reported an increase of 1.9M barrels, according to sources. Supplies of gasoline fell 2.9M barrels, while distillates declined 2.1M barrels last week, according to the EIA. Expectations were for supply declines of 3.6M barrels for gasoline & 800K barrels for distillates. May West Texas Intermediate crude was down 14¢ at $59.80 a barrel after trading at $59.93 before the data.
U.S. oil prices decline as EIA reports the first weekly rise in U.S. crude supplies in 3 weeks
Stocks began the day higher, but the bears are selling. The story has not changed for weeks, the outlook for global economic growth is not clear. News on the US trade deficit while good still shows large deficits. The Dow has been holding up fairly well, although it remains down 1% in Mar. US-China trade talks resume tomorrow which may give stocks a lift.
Dow Jones Industrials
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