Dow sank 184, decliners over advancers 5-2 & NAZ fell 28. The MLP index fell 2+ to the 255s & the REIT index fluctuated near 381 (record high territory). Junk bond funds slid lower & Treasuries were purchased as stocks were being sold. Oil was flattish in the 64s (more below) & gold jumped up 6 to 1308.
AMJ (Alerian MLP Index tracking fund)
Stocks off as US-EU clash over support for aerospace giants
The IMF again reduced its global economic growth forecast for 2019, citing risks like increasing trade tensions & tighter monetary policy by the Federal Reserve. The fund said in expects the world economy to grow by 3.3% this year. That's down from its previous outlook of 3.5%, which was also a downgrade. The IMF added it expects the economy to expand by 3.6% in 2020, however. The IMF's report comes as the Congress struggles to pass the US-Mexico-Canada Agreement (USMCA), a trade deal signed by Pres Trump & his Mexican & Canadian counterparts at the time, which would replace the existing North Atlantic Free Trade Agreement (NAFTA). Meanwhile, the Trump administration tries to hammer out another trade deal with China. "The balance of risks remains skewed to the downside," the IMF said. "Failure to resolve differences and a resulting increase in tariff barriers above and beyond what is incorporated into the forecast would lead to higher costs of imported intermediate and capital goods and higher final goods prices for consumers." The USMCA was signed on Nov 30, but has not received congressional approval yet & getting it thru the legislative body will be tough for the administration. The deal has to get thru the Dem-controlled House & was criticized by Rep Sen Chuck Grassley. The senator noted that tariffs on Mexican & Canadian goods should be waved off once a deal is ratified. Trump, however, has not indicated his willingness to do so. If the deal between the 3 countries falls thru, the ramifications for the US economy would be massive. Canada & Mexico are 2 of the US's 3 largest trade partners & made up 30% of US global trade in 2018, according to data from the Census Bureau. "Higher trade policy uncertainty and concerns of escalation and retaliation would reduce business investment, disrupt supply chains, and slow productivity growth," according to the IMF. "The resulting depressed outlook for corporate profitability could dent financial market sentiment and further dampen growth." The US is also trying to strike a deal with China, its largest trade partner. China alone accounted for nearly 16% of US global trade last year, Census data shows. But while negotiations between the 2 countries are still ongoing, the outlook seems promising.
IMF cuts 2019 growth outlook again, says risks are 'skewed to the downside'
The number of job openings in the US fell by more than ½M in Feb to the lowest level in almost a year, punctuating a sharp slowdown in hiring during the month that stoked worries about the softening economy. Job openings declined 538K to 7.09M in Feb, the Labor Dept reported. That's the lowest level since Mar 2018. In Jan, job openings had hit the 2nd highest level ever. Feb turned out to be a brutal month for hiring. The US added only 33K new jobs, the smallest increase in a year & a ½. Economists blamed a severe cold spell, the residual effects of the gov shutdown & other seasonal disruptions for the unusually small gain. Hiring rebounded in Mar as the US added 196K new jobs, but it remains to be seen if job openings also increased during the month. They are reported with a one-month lag. Job openings in Feb rose slightly in manufacturing, but they fell in every other industry. A closely followed measure known as the quits rate, people who leave jobs on their own, was frozen at 2.3% for the 9th month in a row. It was also flat at 2.6% among private-sector employees. More workers quit when they feel secure enough to leave one job for another, usually for better pay or more opportunity. The quit rate tends to rise when the economy is strong. The current rate, for example, is the 2nd highest level since the gov began keeping track in 2000. The quits rate bottomed out at 1.2% at the end of the 2007-2009 recession. The rebound in hiring in Mar after Feb's swoon was an encouraging sign that could point to somewhat faster growth in the economy in the months ahead. The US has gotten off to a slow start in 2019.
Oil prices swung between small gains & losses, wobbling around 5-month highs as investors weighed the latest supply signals & looked ahead to the latest reading on US stockpiles. West Texas Intermediate futures, the US crude benchmark, were recently down 0.4% at $64.12 a barrel. Prices have added roughly 42% so far this year, though they are still about 16% below their multiyear highs from early Oct.
Stocks have hit a bumpy patch as the averages were closing in on record highs. Confusion on 3 major trade deals for the US are making investors very nervous. BA has a lot at stake in the trade deals, but the stock is down only 3 today (& 70 from its record high at the start of Mar). Q1 earnings reports are being written & expectations are not good. However, with all the turmoil out there, the Dow is still only about 600 under its record high reached in early Oct. Underlying optimism from investors continues to be high.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 64.05 | -0.35 | -0.5% |
| GC=F | Gold | 1,308.10 | +6.20 | +0.5% |
Stocks opened lower amid a brewing tariff conflict between the US & the EU over gov support for Boeing (BA), a Dow stock, & Airbus. The European bloc threatened to prepare its own tariffs against the US for allegedly providing illegal subsidies to BA,
one day after the US proposed to impose tariffs worth $11B on a
slew of European goods, a direct retaliation for the EU's
alleged illegal subsidies to Airbus. Daniel Rosario, a spokesperson for the European
Commission, said the European governing body remains open to
discussions, so long as they're not based on preconditions. "The
Commission is starting preparations so that the EU can promptly take
action based on the arbitrator's decision on retaliation rights in this
case,” Rosario added. Besides Airbus aircraft, the US Trade
Representative's office said yesterday it could place tariffs on famous
cheeses, wines & oysters, ceramics,
knives & pajamas. The dust-up over subsidies
for aerospace giants comes as DC & Beijing work to reach a
wide-ranging trade agreement that would end a damaging tariff conflict
between the 2 nations. China's
Shanghai Composite closed slightly lower, falling 0.2%. The
Hang Seng ended up 0.3% & Japan's Nikkei 225 closed
0.2% higher. Britain's FTSE 100 was off 0.2%. France's CAC 40 declined 0.4% & Germany's DAX fell 0.7%.
Stocks off as US-EU clash over support for aerospace giants
The IMF again reduced its global economic growth forecast for 2019, citing risks like increasing trade tensions & tighter monetary policy by the Federal Reserve. The fund said in expects the world economy to grow by 3.3% this year. That's down from its previous outlook of 3.5%, which was also a downgrade. The IMF added it expects the economy to expand by 3.6% in 2020, however. The IMF's report comes as the Congress struggles to pass the US-Mexico-Canada Agreement (USMCA), a trade deal signed by Pres Trump & his Mexican & Canadian counterparts at the time, which would replace the existing North Atlantic Free Trade Agreement (NAFTA). Meanwhile, the Trump administration tries to hammer out another trade deal with China. "The balance of risks remains skewed to the downside," the IMF said. "Failure to resolve differences and a resulting increase in tariff barriers above and beyond what is incorporated into the forecast would lead to higher costs of imported intermediate and capital goods and higher final goods prices for consumers." The USMCA was signed on Nov 30, but has not received congressional approval yet & getting it thru the legislative body will be tough for the administration. The deal has to get thru the Dem-controlled House & was criticized by Rep Sen Chuck Grassley. The senator noted that tariffs on Mexican & Canadian goods should be waved off once a deal is ratified. Trump, however, has not indicated his willingness to do so. If the deal between the 3 countries falls thru, the ramifications for the US economy would be massive. Canada & Mexico are 2 of the US's 3 largest trade partners & made up 30% of US global trade in 2018, according to data from the Census Bureau. "Higher trade policy uncertainty and concerns of escalation and retaliation would reduce business investment, disrupt supply chains, and slow productivity growth," according to the IMF. "The resulting depressed outlook for corporate profitability could dent financial market sentiment and further dampen growth." The US is also trying to strike a deal with China, its largest trade partner. China alone accounted for nearly 16% of US global trade last year, Census data shows. But while negotiations between the 2 countries are still ongoing, the outlook seems promising.
IMF cuts 2019 growth outlook again, says risks are 'skewed to the downside'
The number of job openings in the US fell by more than ½M in Feb to the lowest level in almost a year, punctuating a sharp slowdown in hiring during the month that stoked worries about the softening economy. Job openings declined 538K to 7.09M in Feb, the Labor Dept reported. That's the lowest level since Mar 2018. In Jan, job openings had hit the 2nd highest level ever. Feb turned out to be a brutal month for hiring. The US added only 33K new jobs, the smallest increase in a year & a ½. Economists blamed a severe cold spell, the residual effects of the gov shutdown & other seasonal disruptions for the unusually small gain. Hiring rebounded in Mar as the US added 196K new jobs, but it remains to be seen if job openings also increased during the month. They are reported with a one-month lag. Job openings in Feb rose slightly in manufacturing, but they fell in every other industry. A closely followed measure known as the quits rate, people who leave jobs on their own, was frozen at 2.3% for the 9th month in a row. It was also flat at 2.6% among private-sector employees. More workers quit when they feel secure enough to leave one job for another, usually for better pay or more opportunity. The quit rate tends to rise when the economy is strong. The current rate, for example, is the 2nd highest level since the gov began keeping track in 2000. The quits rate bottomed out at 1.2% at the end of the 2007-2009 recession. The rebound in hiring in Mar after Feb's swoon was an encouraging sign that could point to somewhat faster growth in the economy in the months ahead. The US has gotten off to a slow start in 2019.
Job openings fall more than half a million to 7.1 million, the lowest level in nearly a year
Oil prices swung between small gains & losses, wobbling around 5-month highs as investors weighed the latest supply signals & looked ahead to the latest reading on US stockpiles. West Texas Intermediate futures, the US crude benchmark, were recently down 0.4% at $64.12 a barrel. Prices have added roughly 42% so far this year, though they are still about 16% below their multiyear highs from early Oct.
Oil Wobbles Near Five-Month High Ahead of Inventories
Stocks have hit a bumpy patch as the averages were closing in on record highs. Confusion on 3 major trade deals for the US are making investors very nervous. BA has a lot at stake in the trade deals, but the stock is down only 3 today (& 70 from its record high at the start of Mar). Q1 earnings reports are being written & expectations are not good. However, with all the turmoil out there, the Dow is still only about 600 under its record high reached in early Oct. Underlying optimism from investors continues to be high.
Dow Jones Industrials
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