Dow dropped 121, decliners over advancers 2-1 & NAZ fell 44. The MLP index fell 2 to the 247s & the REIT index was fractionally lower to the 364s. Junk bond funds slid lower & Treasuries also declined. Oil gave back 1+ to the 55s & gold shot up 10 to 1296 as stocks were being sold.
AMJ (Alerian MLP Index tracking fund)
Stocks add to declines after disappointing jobs report
China's exports to the US plunged in Jan & Feb as Pres Trump's punitive tariffs chilled demand, while sales to the rest of the world also weakened. Exports to the US, China's biggest trading partner, fell 14.1% from a year earlier to $52.3B in the first 2 months of 2019. Analysts usually look at the first 2 months of the year together to screen out the effect of the Lunar New Year holiday, when factories close for up to 2 weeks. China's global exports sank 4.6% to $353.2B for the 2-month period. The trade slump has added to pressure on Chinese leaders to make peace with DC in their tariff fight over Beijing's technology ambitions. Premier Li Keqiang, the top economic official, warned this week China faces a "graver and more complicated environment." The decline in exports to the US market represented a worsening of Dec's 3.5% contraction. Sales to the US had kept growing by double digits thru most of 2018 despite Trump's tariff hikes starting in Jul as exporters rushed to fill orders. But they started to slide in Dec once the full impact of the penalties hit. This is the weakest start to the year for Chinese trade since 2016 & even if a trade agreement is reached, this year's Chinese exports will be lackluster. Chinese imports of American goods in Jan & Feb plummeted 35.1% to $17.2B, depressed by Beijing's retaliatory tariffs & encouragement to importers to buy more from non-US suppliers. In the same period, exports to the 28-nation EU rose 2.4% from a year earlier to $64.7B. China's trade surplus with Europe was $21.9B. Total Chinese imports in Jan & Feb were off 3.1% from a year earlier at $309.5B, reflecting slowing domestic economic activity. The country's global trade surplus was $43.7B & the politically sensitive surplus with the US for the 2-month period was $42B.
White House economic advisor Larry Kudlow said today's shockingly weak jobs report is "very fluky," & he would advise not paying "any attention to it." The reported gain of 20K jobs in Feb was the lowest monthly increase since Sep 2017 & compares with the forecast for 180K new jobs. "I think you have timing issues with respect to the government shutdown, winter seasonal issues," the director of the National Economic Council said. "I think it's very fluky. I wouldn't pay any attention to it to be honest with you." Despite the jobs number, Kudlow said the US economy is still on track for growth of 3% or more. "This is all going to be revised up," he concluded, pointing to overall gains in employment for women and blue-collar workers. Economists have been quick to point to the fact that the gov data has been inconsistent since the gov shutdown & the resulting impact on the workforce. The latest gov employment data came amid growing concerns about a possible global economic slowdown & whether it could be spilling over into the US economy, which advanced 2.9% for the calendar year 2018 & 3.1% when measured from Q4-2017 to Q4-2018. Pres Trump commented on the report via Twitter. In the same interview, Kudlow said Trump & Chinese leader Xi Jinping could meet regarding their trade dispute later this month or early next month.
Larry Kudlow says the weak jobs report is ‘very fluky,’ and he wouldn’t pay attention to it
The Dow has recovered 100 from the loss at the opening, but is still mired in the red. The jobs data was depressing although monthly numbers may be clouded by the gov shutdown in Jan. The Chinese trade figures are interesting. They export a lot more to the US than they import & higher tariffs are pinching their economy more than for the US economy. Maybe that will push them into a more flexible position on trade talks. The Dow has fallen 600 in Mar & there could be more selling ahead .
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 54.70 | -1.96 | -3.5% |
| GC=F | Gold | 1,297.00 | +10.90 | +0.9% |
Stocks dropped after the Feb jobs report fell well short of the estimate. The
Labor Dept reports the US economy added 20K jobs, missing the expectation for 180K jobs by a wide margin.
The unemployment rate fell to 3.8%. Meanwhile, the labor force
participation rate came to 63.2%. Home building in the US jumped in Jan,
even though mortgages rates rose, the market gained momentum. The
Commerce Dept says housing starts rose 18.6% in Jan from the
prior month to a seasonally adjusted annual rate of 1.23M. On Sat, investors will mark the 10-year
anniversary of the start of the bull market. Since then the Dow has gained 289%. The S&P 500 is up
306% & the NAZ has soared 485%. The
consumer discretionary sector has gained the most at 582%. Markets are also reacting to the fact Chinese exports dropped the most in 3 years, while imports fell for a 3rd straight month. China's
Feb exports fell 20.7% from a year earlier, the largest
decline since 2016. The forecast had expected a 4.8% drop after Jan's unexpected 9.1% jump. Chinese stocks sank over 4% today, in their worst day in 5 months. China's Shanghai Composite fell 4.4%, Hong Kong's Hang Seng lost 2% & Japan's Nikkei lost 1.5%. In Europe, London's FTSE traded lower by 1%, Germany's DAX is down 0.8% & France's CAC is off 0.8%.
Stocks add to declines after disappointing jobs report
The US economy added only 20K jobs in Feb, significantly less than what experts predicted, while
unemployment fell to 3.8%, according to data released by
the Bureau of Labor Statistics. The forecast called for an increase of 180K jobs. The low number, a major
drop from the 311K new jobs in Jan & the weakest growth since
Sep 2017, is expected to reignite concerns over a potential
economic slowdown in 2019. However, average
hourly wages last month jumped a better-than-expected 3.4% from
the year-earlier period, a rate of increase not seen since 2009.
The wage gains come amid a tightening labor market that is forcing
companies to pay more to attract talent. But it is also a reflection of the difficulty employers are facing in finding skilled workers in a tight labor market. While optimism among US manufacturers remains high,
according to the National Association of Manufacturer's quarterly
survey, nearly 72% of respondents listed hiring as a job concern. “Manufacturing
is really on the rise right now,” CEO Jay Timmons said. “But the problem that we have right now [is] we can’t find
enough people to do the jobs that we have open.” Despite a hiring slowdown, several top industries
added jobs last month. The health care sector, for example, gained
21K new jobs, while professional services added 42K
new positions. Employment in the retail, transportation, financial
services & other sectors remain unchanged while jobs in construction fell by 31K. Outside of workforce
concerns, many US companies also cite the ongoing trade dispute
between the Trump administration & China as a worry for 2019. The
White House has imposed tariffs on $250B in Chinese products. While
negotiations between Trump officials & Pres Xi Jinping's
gov remain ongoing, questions linger over how extensive any
agreement would be & whether it would actually force China to make
long-sought changes to its economy. Trump also
previoulsy levied double-digit duties on steel & aluminum imports.
While the tariffs have benefited some sectors, others like the
automotive industry are dealing with increased raw material prices that
are adding millions to yearly costs. Private sector hiring slowed last month, with non-farm payroll increasing 183K, slightly less than expected.
US economy adds just 20,000 jobs in February, unemployment at 3.8%
China's exports to the US plunged in Jan & Feb as Pres Trump's punitive tariffs chilled demand, while sales to the rest of the world also weakened. Exports to the US, China's biggest trading partner, fell 14.1% from a year earlier to $52.3B in the first 2 months of 2019. Analysts usually look at the first 2 months of the year together to screen out the effect of the Lunar New Year holiday, when factories close for up to 2 weeks. China's global exports sank 4.6% to $353.2B for the 2-month period. The trade slump has added to pressure on Chinese leaders to make peace with DC in their tariff fight over Beijing's technology ambitions. Premier Li Keqiang, the top economic official, warned this week China faces a "graver and more complicated environment." The decline in exports to the US market represented a worsening of Dec's 3.5% contraction. Sales to the US had kept growing by double digits thru most of 2018 despite Trump's tariff hikes starting in Jul as exporters rushed to fill orders. But they started to slide in Dec once the full impact of the penalties hit. This is the weakest start to the year for Chinese trade since 2016 & even if a trade agreement is reached, this year's Chinese exports will be lackluster. Chinese imports of American goods in Jan & Feb plummeted 35.1% to $17.2B, depressed by Beijing's retaliatory tariffs & encouragement to importers to buy more from non-US suppliers. In the same period, exports to the 28-nation EU rose 2.4% from a year earlier to $64.7B. China's trade surplus with Europe was $21.9B. Total Chinese imports in Jan & Feb were off 3.1% from a year earlier at $309.5B, reflecting slowing domestic economic activity. The country's global trade surplus was $43.7B & the politically sensitive surplus with the US for the 2-month period was $42B.
China exports down on tariffs, weak global economic growth
White House economic advisor Larry Kudlow said today's shockingly weak jobs report is "very fluky," & he would advise not paying "any attention to it." The reported gain of 20K jobs in Feb was the lowest monthly increase since Sep 2017 & compares with the forecast for 180K new jobs. "I think you have timing issues with respect to the government shutdown, winter seasonal issues," the director of the National Economic Council said. "I think it's very fluky. I wouldn't pay any attention to it to be honest with you." Despite the jobs number, Kudlow said the US economy is still on track for growth of 3% or more. "This is all going to be revised up," he concluded, pointing to overall gains in employment for women and blue-collar workers. Economists have been quick to point to the fact that the gov data has been inconsistent since the gov shutdown & the resulting impact on the workforce. The latest gov employment data came amid growing concerns about a possible global economic slowdown & whether it could be spilling over into the US economy, which advanced 2.9% for the calendar year 2018 & 3.1% when measured from Q4-2017 to Q4-2018. Pres Trump commented on the report via Twitter. In the same interview, Kudlow said Trump & Chinese leader Xi Jinping could meet regarding their trade dispute later this month or early next month.
Larry Kudlow says the weak jobs report is ‘very fluky,’ and he wouldn’t pay attention to it
The Dow has recovered 100 from the loss at the opening, but is still mired in the red. The jobs data was depressing although monthly numbers may be clouded by the gov shutdown in Jan. The Chinese trade figures are interesting. They export a lot more to the US than they import & higher tariffs are pinching their economy more than for the US economy. Maybe that will push them into a more flexible position on trade talks. The Dow has fallen 600 in Mar & there could be more selling ahead .
Dow Jones Industrials
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