Dow sank 133, decliners over advancers 5-2 & NAZ fell 70. The MLP index was off 1+ to the 245s & the REIT index crawled up 1 to the 367s. Junk bond funds were mixed & Treasuries went up, taking the yield on the 10 Year Treasury down 3 basis points to 2.69%. Oil slid lower in the 56s & gold remained higher, up 2 to 1286.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The Federal Reserve says the US economy was expanding in Jan & Feb, but ½ the country was seeing fallout from the 35-day partial gov shutdown. Some manufacturers expressed worries about weakening global demand for their products & adverse effects from Pres Trump's trade policies. In its latest report on economic conditions around the country, the Fed said that 10 of its 12 regions reported "slight-to-moderate growth" over the past 2 months. Philadelphia & St Louis reported that conditions were "flat." The Fed report, known as the beige book, will be used when central bank officials meet Mar 19-20 to consider what to do with interest rates. The expectation is that the central bank will remain "patient" & leave rates unchanged.
Fed survey finds adverse impact from government shutdown
The central bank's benchmark interest rate is “right at neutral,” a key official said is what is a signal that the Federal Reserve isn't looking to hike interest rates imminently. NY Fed Pres John Williams said the economy is currently “about as good as it gets: very low unemployment, sustainable growth & inflation just about at our 2% goal.” “Given this favorable situation, when you look at monetary policy, things are looking pretty normal as well,” said Williams, who is the only regional pres that gets a vote at all FOMC meetings. “My current estimate for r-star is 0.5%, so when you adjust for inflation that’s near 2%, the current federal funds rate of 2.4% puts us right at neutral,” he added. R-star is the Fed's short-hand for the neutral level of rates that neither boosts growth or slows things down. Williams helped develop the Fed's model to estimate the level of r-star. In his speech, Williams said he expected the economy to slow “considerably” this year to a 2% annual growth rate, close to the Fed's estimate of the trend rate of growth. This is in line with projections of other top Fed officials. While this forecast from the central bank was causing “uncertainty, some hand-wringing, and even fear of recession,” he said the slower growth “isn’t necessarily a cause for alarm.” All of the economic fundamentals have been pointing to a slower growth trend, he said. “Moderate growth...is far less alarming when you know what the underlying factors might be,” he added. Williams admitted that various uncertainties continue to “loom large,” & that “downside risks could knock GDP growth off course.” “I’ve said it before and no doubt, I’ll say it as long as I work for a central bank. But in the current conditions the phrase takes on even more importance. Our response will always be ‘data dependent,’” he said. “We can afford to be flexible and wait for the data to guide our approach,” he added.
After 52 years of cranking out more than 16M new vehicles, the General Motors (GM) assembly plant in Lordstown, Ohio, is shutting down. The last Chevy Cruze rolled off the line today, leaving Ks of workers to start building new lives as retirees or in new jobs (many in new cities). This is the latest move by the new GM to avoid the mistakes that helped drive it into bankruptcy a decade ago. Back then, the automaker waited too long to cut production, close plants & adjust to rapid changes in the auto industry. This time is different. As Americans have gravitated to trucks & SUVs, turning away from cars, CEO Mary Barra is adjusting the automaker's footprint by ending production at 5 plants in the US & Canada & cutting 14K jobs. Lordstown is the first plant to close under this new plan. Not a big surprise since the plant only made the slow-selling Cruze sedan & GM is looking to shed some of the company's unused capacity. The stock fell 61¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM’s Lordstown factory goes dark as automaker idles underused plants
Markets continued in their 3 week sideways trading pattern. Economic data has not brought more buyers out. Until there is new news on the trade front (hopefully good news), this trend can be expected to continue.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Federal Reserve says the US economy was expanding in Jan & Feb, but ½ the country was seeing fallout from the 35-day partial gov shutdown. Some manufacturers expressed worries about weakening global demand for their products & adverse effects from Pres Trump's trade policies. In its latest report on economic conditions around the country, the Fed said that 10 of its 12 regions reported "slight-to-moderate growth" over the past 2 months. Philadelphia & St Louis reported that conditions were "flat." The Fed report, known as the beige book, will be used when central bank officials meet Mar 19-20 to consider what to do with interest rates. The expectation is that the central bank will remain "patient" & leave rates unchanged.
Fed survey finds adverse impact from government shutdown
The central bank's benchmark interest rate is “right at neutral,” a key official said is what is a signal that the Federal Reserve isn't looking to hike interest rates imminently. NY Fed Pres John Williams said the economy is currently “about as good as it gets: very low unemployment, sustainable growth & inflation just about at our 2% goal.” “Given this favorable situation, when you look at monetary policy, things are looking pretty normal as well,” said Williams, who is the only regional pres that gets a vote at all FOMC meetings. “My current estimate for r-star is 0.5%, so when you adjust for inflation that’s near 2%, the current federal funds rate of 2.4% puts us right at neutral,” he added. R-star is the Fed's short-hand for the neutral level of rates that neither boosts growth or slows things down. Williams helped develop the Fed's model to estimate the level of r-star. In his speech, Williams said he expected the economy to slow “considerably” this year to a 2% annual growth rate, close to the Fed's estimate of the trend rate of growth. This is in line with projections of other top Fed officials. While this forecast from the central bank was causing “uncertainty, some hand-wringing, and even fear of recession,” he said the slower growth “isn’t necessarily a cause for alarm.” All of the economic fundamentals have been pointing to a slower growth trend, he said. “Moderate growth...is far less alarming when you know what the underlying factors might be,” he added. Williams admitted that various uncertainties continue to “loom large,” & that “downside risks could knock GDP growth off course.” “I’ve said it before and no doubt, I’ll say it as long as I work for a central bank. But in the current conditions the phrase takes on even more importance. Our response will always be ‘data dependent,’” he said. “We can afford to be flexible and wait for the data to guide our approach,” he added.
Fed’s Williams says interest rates are at ‘neutral’ now
After 52 years of cranking out more than 16M new vehicles, the General Motors (GM) assembly plant in Lordstown, Ohio, is shutting down. The last Chevy Cruze rolled off the line today, leaving Ks of workers to start building new lives as retirees or in new jobs (many in new cities). This is the latest move by the new GM to avoid the mistakes that helped drive it into bankruptcy a decade ago. Back then, the automaker waited too long to cut production, close plants & adjust to rapid changes in the auto industry. This time is different. As Americans have gravitated to trucks & SUVs, turning away from cars, CEO Mary Barra is adjusting the automaker's footprint by ending production at 5 plants in the US & Canada & cutting 14K jobs. Lordstown is the first plant to close under this new plan. Not a big surprise since the plant only made the slow-selling Cruze sedan & GM is looking to shed some of the company's unused capacity. The stock fell 61¢.
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM’s Lordstown factory goes dark as automaker idles underused plants
Markets continued in their 3 week sideways trading pattern. Economic data has not brought more buyers out. Until there is new news on the trade front (hopefully good news), this trend can be expected to continue.
Dow Jones Industrials
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