Dow fell 18, advancers over decliners 3-2 & NAZ was up 32. The MLP index fluctuated in the 252s & the REIT index added 2+ to 271. Junk bond funds crawled higher & Treasuries also rose in price. Oil climbed to the 57s & gold rose 7 to 1298
AMJ (Alerian MLP Index tracking fund
Small-business owners' confidence in the US economy improved slightly in Feb, breaking 5 consecutive months of declines & rebounding from the partial gov shutdown, according to the National Federation of Independent Business (NFIB). The small-business lobby said its optimism index rose to 101.7 last month, from 101.2 in Jan, but fell short of the expected 103 reading. The NFIB survey is a monthly snapshot of small businesses in the US, which account for about ½ of private-sector jobs. Economists look to the report for a read on domestic demand & to extrapolate hiring & wage trends in the broader economy. "Small business owners are thankful to have the government shutdown in the rear-view mirror but need more certainty about the future," NFIB Chief Exec Juanita D. Duggan said. The NFIB's Feb survey results showed earnings trends fell to the weakest reading in more than a year. Still, more respondents thought it was a good time to expand operations, though the political climate continues to weigh on their minds.
Sterling fell sharply against $ after Britain's Attorney General Geoffrey Cox published his opinion on Prime Minister Theresa May's recently amended Brexit deal. Cox's legal advice on the tweaked deal is seen as crucial to whether the assurances May received yesterday are enough to give wavering UK lawmakers the confidence to give her deal the green light. A 2nd vote on May's deal is still due later today. Cox said that the legal risks to Brexit still remain despite the late-night concessions from the EU yesterday. He added that the revised document did not give Britain any legal means of exiting the "Irish backstop" arrangements unilaterally. The backstop is a mechanism to avoid restoration of the "hard" border between the Republic of Ireland & Northern Ireland that was erased with the 1998 Good Friday peace agreement between London & Dublin. Some UK politicians don't like the fact that the backstop, although intended as a last-resort, would mean the UK remaining within a EU customs union for an indefinite amount of time & unable to leave unilaterally. "The legal risk remains unchanged that if through no such demonstrable failure of either party, but simply because of intractable differences, that situation does arise, the United Kingdom would have ... no internationally lawful means of exiting the Protocol's arrangements, save by agreement," Cox said. The British currency plunged 1% to trade at $1.3012 & also slipped nearly 1% against the €. May's deal has already been roundly rejected by UK lawmakers once, back in January, & faces another test this evening. If lawmakers vote against the deal again, they will then get to vote tomorrow & Thurs respectively on whether the UK should leave the 28-member bloc with no deal or should request a delay to its departure, scheduled for Mar 29. May needs to win over the most ardent Brexiteers within her own Conservative party who belong to a euroskeptic European Research Group (ERG) & the Northern Irish party that supports her gov & gives it a slim majority in parliament, the Democratic Unionist Party (DUP).
Sterling plunges after Theresa May’s Brexit deal suffers surprise legal setback
This may be a day that traders assess developments on a lot of fronts. The BA story affects many businesses, DC remains dysfunctional which is unsettling for a lot of companies & then there's the US China trade talks stumbling along. While Fed watchers feel relieved that rate hikes will be more of a back-burner issue in 2019, a slowdown in the economy is getting more attention. Meanwhile the Dow remains near record territory. Go figgah!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund
| CL=F | Crude Oil | 57.23 | +0.44 | +0.8% |
| GC=F | Gold | 1,297.60 | +6.50 | +0.5% |
Stocks were mixed for a 2nd straight day as a decline in Boeing (BA) shares had an impact on the Dow, while consumer prices rose for the first time in 4 months. Countries & airlines are suspending use of the plane-maker’s 737 Max jets in droves as BA struggles to contain the fallout from 2 fatal crashes involving the recent update to its most popular jetliner. Investors also digested the latest inflation data & awaited news of the upcoming in the UK's Parliament on the latest
Brexit deal. The
Federal Aviation Administration yesterday said it had no immediate
plans to ground the aircraft & several US airlines still operate the
jet. Still, the number of foreign airlines that have suspended
operations of the plane is growing. In economic news, US consumer prices rose in Feb, but the pace of the increase was modest, resulting in the smallest annual gain in nearly 2½ years. In Asian markets, China's Shanghai
Composite gained 1.1%, following the US rally with gains
helping by continued optimism about a trade deal between China & the
US. Hong Kong's Hang Seng index was up 1.5% & Japan's Nikkei
ended the day up 1.8% to a 6-day high. In Europe, London's FTSE edged higher, Germany's was off a tad & France's CAC was up pennies.
Stocks trade mixed as Boeing continues to weigh on the Dow
US consumer prices rose for the first time in 4 months in Feb, but the pace of
the increase was modest, resulting in the smallest annual gain
in nearly 2½ years. The Labor Dept said its Consumer Price
Index increased 0.2%, lifted by gains in the costs of food, gasoline & rents. The CPI had been unchanged for 3
straight months. In the 12 months thru Feb, the CPI rose 1.5%,
the smallest gain since Sep 2016. The CPI increased 1.6% on a year-on-year basis in Jan. Excluding the volatile food & energy components, the CPI
edged up 0.1%, the smallest increase since Aug 2018.
The core CPI had increased by 0.2% for 5
straight months. In the 12 months thru Feb, core CPI rose 2.1%. The core CPI had increased 2.2% for 3
consecutive months on an annual basis. The forecast called for the CPI & the core CPI edging up 0.2%. The Federal Reserve, which has a 2% inflation target,
tracks a different measure, the core personal consumption
expenditures (PCE) price index, for monetary policy. The core PCE price index increased 1.9% on a
year-on-year basis in Dec after a similar gain in Nov.
It hit the central bank's 2% inflation target in
Mar last year for the first time since 2012. Slowing domestic & global growth are keeping inflation in
check even as a tight labor market is driving up wages. Annual
wage growth jumped 3.4% in Feb, the biggest increase
since 2009, from 3.1% in Jan. A Fed survey of consumer expectations published yesterday showed a drop in inflation expectations in Feb. In an interview on Sun, Fed Chair Jerome Powell reiterated the
US central bank's wait-&-see approach to further monetary
policy tightening this year. Powell added that the Fed did "not feel
any hurry" to change the level of interest rates again. In Feb, gasoline prices rose 1.5% after falling
5.5% in Jan. Food prices increased 0.4%, the
biggest rise since 2014, after gaining 0.2% in
Jan. Food consumed at home rose 0.4% last month. Owners' equivalent rent of primary residence, which is what
a homeowner would pay to rent or receive from renting a home,
increased 0.3% in Feb after a similar gain in
Jan.
US consumer prices post first rise in four months
Small-business owners' confidence in the US economy improved slightly in Feb, breaking 5 consecutive months of declines & rebounding from the partial gov shutdown, according to the National Federation of Independent Business (NFIB). The small-business lobby said its optimism index rose to 101.7 last month, from 101.2 in Jan, but fell short of the expected 103 reading. The NFIB survey is a monthly snapshot of small businesses in the US, which account for about ½ of private-sector jobs. Economists look to the report for a read on domestic demand & to extrapolate hiring & wage trends in the broader economy. "Small business owners are thankful to have the government shutdown in the rear-view mirror but need more certainty about the future," NFIB Chief Exec Juanita D. Duggan said. The NFIB's Feb survey results showed earnings trends fell to the weakest reading in more than a year. Still, more respondents thought it was a good time to expand operations, though the political climate continues to weigh on their minds.
Small business sentiment rebounds after five months of declines
Sterling fell sharply against $ after Britain's Attorney General Geoffrey Cox published his opinion on Prime Minister Theresa May's recently amended Brexit deal. Cox's legal advice on the tweaked deal is seen as crucial to whether the assurances May received yesterday are enough to give wavering UK lawmakers the confidence to give her deal the green light. A 2nd vote on May's deal is still due later today. Cox said that the legal risks to Brexit still remain despite the late-night concessions from the EU yesterday. He added that the revised document did not give Britain any legal means of exiting the "Irish backstop" arrangements unilaterally. The backstop is a mechanism to avoid restoration of the "hard" border between the Republic of Ireland & Northern Ireland that was erased with the 1998 Good Friday peace agreement between London & Dublin. Some UK politicians don't like the fact that the backstop, although intended as a last-resort, would mean the UK remaining within a EU customs union for an indefinite amount of time & unable to leave unilaterally. "The legal risk remains unchanged that if through no such demonstrable failure of either party, but simply because of intractable differences, that situation does arise, the United Kingdom would have ... no internationally lawful means of exiting the Protocol's arrangements, save by agreement," Cox said. The British currency plunged 1% to trade at $1.3012 & also slipped nearly 1% against the €. May's deal has already been roundly rejected by UK lawmakers once, back in January, & faces another test this evening. If lawmakers vote against the deal again, they will then get to vote tomorrow & Thurs respectively on whether the UK should leave the 28-member bloc with no deal or should request a delay to its departure, scheduled for Mar 29. May needs to win over the most ardent Brexiteers within her own Conservative party who belong to a euroskeptic European Research Group (ERG) & the Northern Irish party that supports her gov & gives it a slim majority in parliament, the Democratic Unionist Party (DUP).
Sterling plunges after Theresa May’s Brexit deal suffers surprise legal setback
This may be a day that traders assess developments on a lot of fronts. The BA story affects many businesses, DC remains dysfunctional which is unsettling for a lot of companies & then there's the US China trade talks stumbling along. While Fed watchers feel relieved that rate hikes will be more of a back-burner issue in 2019, a slowdown in the economy is getting more attention. Meanwhile the Dow remains near record territory. Go figgah!
Dow Jones Industrials
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