Dow lost 13, decliners barely ahead of advancers & NAZ was off 1. The MLP index was fractionally lower to the 247s & the REIT index went up 1+ to the 366s. Junk bond funds continued lower & Treasuries did not budge in price. Oil was flat in the 56s & gold inched up 1 to 1288 after 6 straight daily losses.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
For the month of Jan, the Treasury reported a budget surplus of $9B, down $41B (82%) from the same month a year ago. The Jan figures came later than normal from the gov due to the shutdown that ended Jan 25. Receipts in Jan dropped 6% overall, as individual withheld & payroll taxes fell by 8% & corp taxes dropped 47%. Customs duties, meanwhile, doubled. Spending in Jan rose 6%, with outlays climbing 6% for Medicare, 26% for defense military programs & 9% for Medicaid. Interest on the public debt was flat for the month. The Treasury noted that Jan 2019 had one less Mon & one more Thurs than Jan 2018, & that combination led to a lower level of withheld & payroll taxes. Adjusted for calendar quirks, the budget was balanced in Jan, compared to a $30B surplus in Jan 2018. For the fiscal year thru Jan, the federal budget deficit is $310B, up 77% compared to the same period in the prior year. The widening deficit comes as the Congressional Budget Office is projecting a shortfall of $897B for the full fiscal year (4.2% of GDP). That’s up from $779Bin fiscal 2018, when spending climbed & revenue remained nearly flat. The CBO sees T$ deficits beginning in fiscal 2022.
Companies on the service side of the economy that employ the vast majority of American workers grew in Feb at the fastest pace in 3 months, the first sign that US growth might be picking up after an early-year lull. The Institute for Supply Management's (ISM) survey of senior execs at banks, retailers, restaurants & the like rose to 59.7% last month from 56.7% in Jan. The increase easily the forecast. Numbers over 50% are viewed as positive for the economy & anything over 55% is considered exceptional. The strength on the service side of the economy stood in contrast to softer growth in manufacturing. ISM's manufacturing survey fell in Feb to the lowest level since Trump was elected in Nov 2016. Services play a much bigger part in the economy, however. The index for production & new orders both rose sharply to finish around 65, exceptionally strong readings that were the highest in 14 years. All 18 of the industries tracked by the ISM also said business expanded in Feb. Hiring appeared to slow a bit, however. The employment gauge fell 2.6 points to a still-healthy 55.2%.. The economy decelerated toward the end of 2018 & started off the new year sluggishly, partly because of festering trade tensions with China. The gov shutdown was another drag that left businesses feeling anxious. Economists predict GDP will taper to a 1.5% rate in Q1 from 2.6% in the final 3 months of 2018. Many execs say the dispute has hurt business, though they expect it will resolved soon. If so, the slowdown is likely to temporary. The economy has also generally been strongest in the spring since an expansion got under way almost 10 years ago. The latest ISM reading might be a sign that a spring thaw is already under way.
Target (TGT), a Dividend Aristocrat, chief Brian Cornell tempered his statements about the strength of American shoppers today, months after making a bold call that the consumer environment was "perhaps the strongest I've seen in my career." "It's still a very stable consumer environment. Consumers are shopping. You're seeing strong consumer confidence, still," Cornell said. "Certainly, we're going to watch it carefully," Cornell added, referring to consumer buying trends. "It's going to ebb and flow. But right now, I think we're seeing a very consistent consumer environment." Cornell was interviewed shortly after delivereding better-than-expected Q4 earnings, revenue & same-store sales growth, as well as a rosier full-year outlook. The stock rose 3.34 (5%).
If you would like to learn more about TGT, click on this link:
club.ino.com/trend/analysis/stock/TGT?a_aid=CD3289&a_bid=6ae5b6f7
Target CEO sounds a more cautious note after crowing about consumers last year
Economic news for Feb is coming in better than for Jan, but the outcome on the China trade talks are getting the most attention. Until there is a signed deal, investors are largely on the sidelines & the Dow continues to drift sideways a little under 26K.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
China announced a robust annual economic growth
target & a 7.5% rise in military spending as it
convened an annual legislative session overshadowed by a tariff war with
the US. Seeking to defuse US &
European complaints the Chinese system is rigged against foreign
companies, Premier Li Keqiang promised in a speech to the National
People's Congress that they will be "treated as equals" with their
Chinese competitors. Li, the country's top
economic official, set this year's growth target at 6-6.5%,
reflecting determination to shore up a cooling state-dominated economy & prevent politically dangerous job losses. Such a growth rate, if
achieved, would be among the world's strongest. Yet it would be slightly
below last year's 6.6% growth in China & mark a new 3-decade low. The slowdown in China, the world's 2nd-largest economy after the US, is likely to hold back intl growth. At the legislative
session in Beijing, Li promised to "promote China-U.S. trade
negotiations," but gave no details of talks aimed at ending the fight
with Pres Trump over Beijing's technology ambitions &
complaints it steals or pressures companies to hand over technology. Li,
#2 in the ruling Communist Party behind Pres Xi Jinping,
pledged higher spending on development of technologies including
artificial intelligence, electric cars, biotechnology & new materials
that China's leaders see as a path to prosperity & global influence.
He also promised more money for education, social programs & public
works construction. China's emergence as a
competitor in smartphones, telecom equipment, solar power & other
technologies has increased the range of products available to consumers & helped to drive down prices. But it rattles the US other
govs that worry Chinese competition is a threat to their
industries & employment. Li warned that the 2nd-largest economy faces a "graver and more complicated environment" & risks that "are greater in number and size." The 2-week gathering of the congress's 3K-plus delegates in the
cavernous Great Hall of the People is China's biggest event of the year.
It does little lawmaking, but serves as a platform to highlight the
gov's plans for the year. Xi's
gov is expected to use this year's session to announce tax cuts & more support for entrepreneurs who generate much of China's new jobs & wealth. Legislators also are due to
endorse a law that aims to ease tensions with DC & Europe by
discouraging officials from pressuring foreign companies to hand over
technology.
China sets robust growth target to shore up cooling economy
For the month of Jan, the Treasury reported a budget surplus of $9B, down $41B (82%) from the same month a year ago. The Jan figures came later than normal from the gov due to the shutdown that ended Jan 25. Receipts in Jan dropped 6% overall, as individual withheld & payroll taxes fell by 8% & corp taxes dropped 47%. Customs duties, meanwhile, doubled. Spending in Jan rose 6%, with outlays climbing 6% for Medicare, 26% for defense military programs & 9% for Medicaid. Interest on the public debt was flat for the month. The Treasury noted that Jan 2019 had one less Mon & one more Thurs than Jan 2018, & that combination led to a lower level of withheld & payroll taxes. Adjusted for calendar quirks, the budget was balanced in Jan, compared to a $30B surplus in Jan 2018. For the fiscal year thru Jan, the federal budget deficit is $310B, up 77% compared to the same period in the prior year. The widening deficit comes as the Congressional Budget Office is projecting a shortfall of $897B for the full fiscal year (4.2% of GDP). That’s up from $779Bin fiscal 2018, when spending climbed & revenue remained nearly flat. The CBO sees T$ deficits beginning in fiscal 2022.
U.S. runs January budget surplus of $9 billion
Companies on the service side of the economy that employ the vast majority of American workers grew in Feb at the fastest pace in 3 months, the first sign that US growth might be picking up after an early-year lull. The Institute for Supply Management's (ISM) survey of senior execs at banks, retailers, restaurants & the like rose to 59.7% last month from 56.7% in Jan. The increase easily the forecast. Numbers over 50% are viewed as positive for the economy & anything over 55% is considered exceptional. The strength on the service side of the economy stood in contrast to softer growth in manufacturing. ISM's manufacturing survey fell in Feb to the lowest level since Trump was elected in Nov 2016. Services play a much bigger part in the economy, however. The index for production & new orders both rose sharply to finish around 65, exceptionally strong readings that were the highest in 14 years. All 18 of the industries tracked by the ISM also said business expanded in Feb. Hiring appeared to slow a bit, however. The employment gauge fell 2.6 points to a still-healthy 55.2%.. The economy decelerated toward the end of 2018 & started off the new year sluggishly, partly because of festering trade tensions with China. The gov shutdown was another drag that left businesses feeling anxious. Economists predict GDP will taper to a 1.5% rate in Q1 from 2.6% in the final 3 months of 2018. Many execs say the dispute has hurt business, though they expect it will resolved soon. If so, the slowdown is likely to temporary. The economy has also generally been strongest in the spring since an expansion got under way almost 10 years ago. The latest ISM reading might be a sign that a spring thaw is already under way.
Speedier growth in service side of economy might be sign of spring thaw, ISM indicates
Target (TGT), a Dividend Aristocrat, chief Brian Cornell tempered his statements about the strength of American shoppers today, months after making a bold call that the consumer environment was "perhaps the strongest I've seen in my career." "It's still a very stable consumer environment. Consumers are shopping. You're seeing strong consumer confidence, still," Cornell said. "Certainly, we're going to watch it carefully," Cornell added, referring to consumer buying trends. "It's going to ebb and flow. But right now, I think we're seeing a very consistent consumer environment." Cornell was interviewed shortly after delivereding better-than-expected Q4 earnings, revenue & same-store sales growth, as well as a rosier full-year outlook. The stock rose 3.34 (5%).
If you would like to learn more about TGT, click on this link:
club.ino.com/trend/analysis/stock/TGT?a_aid=CD3289&a_bid=6ae5b6f7
Target CEO sounds a more cautious note after crowing about consumers last year
Economic news for Feb is coming in better than for Jan, but the outcome on the China trade talks are getting the most attention. Until there is a signed deal, investors are largely on the sidelines & the Dow continues to drift sideways a little under 26K.
Dow Jones Industrials
No comments:
Post a Comment