Monday, April 29, 2019

Markets edge higher ahead of earnings and economic reports

Dow crawled up 14, advancers over decliners better than 3-2 & NAZ added 13.  The MLP index was fractionally lower in the 252s & the REIT index fell 1+ to the 376s (still near record highs).  Junk bond funds rose in price & Treasuries were sold today.  Oil slid back to the high 62s & gold dropped 8 to 1280.

AMJ (Alerian MLP Index tracking fund)

CL=FCrude Oil62.88

GC=FGold   1,280.90

3 Stocks You Should Own Right Now - Click Here!

Small business owners' optimism is showing more signs of ebbing.  That's one of the findings of a semiannual survey of owners. 48% of the 1504 owners surveyed predicted that the national economy will improve over the next year, down from 55% in the survey taken last fall.  The drop in optimism extends to owners' view of their local economies, 51% expect an improvement versus 54% in the previous survey.  The latest survey, conducted in Feb, is in line with surveys taken earlier this year by Capital One, the US Chamber of Commerce, MetLife & Wells Fargo that showed small business optimism slipping along with expectations for the economy.  The creeping pessimism was also reflected in owners' modestly scaled-back plans to expand.  67% of the owners Bank of America surveyed said they planned to expand their companies in the year ahead, down from 69% in a survey taken a year earlier & 56% said they planned to expand over the next 5 years, down from 60% a year earlier.  The number of owners who plan to hire increased to 24% from 22% a year earlier.  However, the number of owners who plan to create jobs is smaller than in other surveys.  Owner pessimism may be fueled by concerns about the nation's political environment.  It was cited by nearly 2/3 of the owners as one of their top economic concerns, surpassed only by health care costs.  Rising interest rates, the stock market's recent volatility & consumer spending were all cited as economic concerns by nearly ½ the owners.  Owners may also be a little less optimistic because the new tax law hasn't given their companies the boost they expected.  28% said the gov's new tax policy has been positive for their companies, compared to 45% who had a positive outlook about tax policy a year earlier.  ½ said tax policy was neutral for their businesses, up from 39% who a year ago forecast a neutral impact & 21% said tax policy has had a negative impact on their companies, up from last year's 15%.

Small business optimism shows signs of ebbing, survey says

US consumer spending increased by the most in more than 9½ years in Mar, but price pressures remained muted, with a key inflation measure posting its smallest annual gain in 14 months.  The Commerce Dept said consumer spending, which accounts for more than 2/3 of US econoimmc activilty, surged 0.9% as households stepped up purchases of motor vehicles & spent more on healthcare.  Consumer spending edged up 0.1% in Feb.  Data for Jan was revised up to show consumer spending rising 0.3% instead of the previously reported 0.1% gain.  The release of the Feb spending data was delayed by the partial shutdown of the federal gov.  The forecast called for consumer spending jumping 0.7% in Mar.  When adjusted for inflation, consumer spending increased 0.7% in Mar.  Real consumer spending was unchanged in Feb.  The data was included in last Fri's GDP report.  March's surge in real consumer spending suggested an acceleration in consumption was likely in Q2.  Consumers spending increased at a 1.2% annualized rate in Q1, the slowest in a year.  The overall economy grew at a 3.2% rate last qtr.  In Mar, spending on goods rebounded 1.7%, with outlays on long-lasting manufactured goods such as cars shooting up 2.3%.   Outlays on services increased 0.5% last month, driven by healthcare spending.  Inflation pressures were benign in Mar.  The personal consumption expenditures (PCE) price index excluding the volatile food & energy components was unchanged after edging up 0.1% in Feb.  That lowered the year-on-year increase in the ecore PCE price index to 1.6% , the smallest increase since Jan 2018, from 1.7% in Feb.  The core PCE index is the Federal Reserve's preferred inflation measure.  It hit the central bank's 2% inflation target in Mar last year for the first time since Apr 2012.  Fed officials will meet Tues & Wed to assess the economy & deliberate on the future course of monetary policy.  The Fed in Mar dropped forecasts for any interest rate increases this year, halting a 3-year policy tightening campaign.  The Fed raised borrowing costs 4 times in 2018.  In Mar, personal income ticked up 0.1% after rising 0.2% in Feb.  Wages rose 0.4% in Mar after advancing 0.3% in the prior month while savings fell to $1.03T from $1.16T  in Feb.

US consumer spending posts biggest gain since 2009

A closely watched measure of US inflation picked up in Mar but remained well below the Federal Reserve's 2% target, highlighting the central bank's struggles to foster reliable price growth even in a strong economy.  The Fed's preferred inflation gauge, the price index for personal-consumption expenditures, rose a seasonally adjusted 0.1% in Feb from the previous month & climbed another 0.2% in Mar, the Commerce Dept said. Figures for the 2 months were released simultaneously.

Inflation Picks Up, but Still Below Fed’s 2% Target

In AM trading stocks were marking time.  After opening around breakeven, buyers are returning to carefully bid prices higher.  Even though the popular averages are close to record highs, the survey of small business owners indicates all is not well for the economy.  The Fed meeting is expected to be a non-event.

Dow Jones Industrials

No comments: