Dow went up 38, advancers ahead of decliners 2-1 & NAZ shot up 64. The MLP index inched up in the 258s & the REIT index rose 2+ to the 381s. Junk bond funds did little & Treasuries declined in price. Oil was steady in the 62s & gold slid back 1 to 1288.
AMJ (Alerian MLP Index tracking fund)
Even before the bond yield invested & the Federal Reserve sounded a cautious note for the year ahead, some of North America's top finance execs stressed the increasing likelihood of an economic downturn in the US. According to a new study by Deloitte, nearly ¾ of CFOs said they expect a deceleration of economic activity by the end of 2020; however, of those surveyed, only 15% anticipated an outright recession. That’s largely because the US-China trade war, the length of business & credit cycles & slowing growth in China & Europe. The CFOs also cited concerns about rising interest rates, although the Fed has signaled it likely won't raise the benchmark federal funds rate for the remainder of 2019, declining consumer confidence & political concerns. Despite the high number of execs who believe a downturn is coming, less than ½ said they have a defensive plan in place. About 39% of CFOs said their company had a detailed plan for a downturn, while 28% said they have already begun to take defensive steps. “Prior to 2017, CFOs’ top external risks focused heavily on slow economic growth,” the study said. “As global economic performance improved, CFOs’ top worries shifted toward threats to continued growth -- especially trade policy/tariffs and political turmoil.” Of the 151 respondents, 58 CFOs said they were most worried by the current US trade policy, in addition to tariffs. Following that were 31 CFOs, who said they were most worried about an economic risk & slowdown. The sentiment has been echoed by other studies, including a survey published in Jan by the Conference Board that found CEOs view a recession as their biggest external concern for 2019. Comparatively, in 2018, CEOs ranked the threat of a recession an afterthought, ranking it as their 19th most vital concern.
CFOs believe economic slowdown coming to US - and soon
Growth in the US services sector fell more than expected & reached its slowest pace in more than a year, according to data from the Institute for Supply Management (ISM). The ISM non-manufacturing index fell to 56.1 in Mar, the weakest print since Aug 2017, down from 59.7 in Feb. The index was expected to dip to 58. "The non-manufacturing sector's growth cooled off in March after strong growth in February," said Anthony Nieves, chair of the ISM. "Respondents remain mostly optimistic about overall business conditions and the economy. They still have underlying concerns about employment resources and capacity constraints." New orders, a key component of the overall index, fell by 6.2 points last month to 59. Meanwhile, prices increased by 4.3 points to 58.7. Stocks pared their initial gains on the ISM data, with the Dow briefly dipping into negative territory. The ISM report also follows weaker-than-expected jobs data released earlier in the day. Private payrolls increased by 129K last month, well below the expected print of 173K, according to ADP & Moody's Analytics. The private payrolls report is used by investors as a preview to the monthly US jobs report.
Services sector growth falls to slowest pace since August 2017
Leakers are saying a final US-China trade deal is near. But it's not complete yet. Nothing to do but await developments. Meanwhile economic data is not impressive & more of these kind of results can be expected. As an aside, REITs have been having an excellent year with the index (above) at new records. Even though this is not an exciting area for investors, yields are attractive.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 62.70 | +0.12 | +0.2% |
| GC=F | Gold | 1,288.10 | -1.90 | -0.2% |
Hiring in the US private sector grew by 129K jobs in Mar, according to the ADP National Employment report, missing expectations of 170K jobs. It
marked the slowest employment increase in 18 months, according to Ahu
Yildirmaz, VP of the ADP Research Institute. “Although
some service sectors showed continued strength, we saw weakness in the
goods producing sector," she said. Stocks continued their premarket gains following the release of the report. It's
likely reflective of a weakening job market, Moody' Analytics chief
economist Mark Zandi said, as employment gains slow across most
industries & companies. Although the goods-producing sector lost 6K
jobs, the service-providing sector added 135K. "If employment groth weakens much further," he said, "unemployment will begin to rise." In Feb, the private sector added 183K jobs, slightly less than the anticipated 189K. The
results precede the release on Fri by the Labor Dept of the
highly anticipated jobs report, which will provide further insight into
whether the nation's economy is slowing. The US economy is expected to
have added 180K jobs, on the heels of a measly month for job
creation. In Feb, the public sector added a disappointing 20K
jobs.
Private sector hiring in March misses Wall Street's expectations
Even before the bond yield invested & the Federal Reserve sounded a cautious note for the year ahead, some of North America's top finance execs stressed the increasing likelihood of an economic downturn in the US. According to a new study by Deloitte, nearly ¾ of CFOs said they expect a deceleration of economic activity by the end of 2020; however, of those surveyed, only 15% anticipated an outright recession. That’s largely because the US-China trade war, the length of business & credit cycles & slowing growth in China & Europe. The CFOs also cited concerns about rising interest rates, although the Fed has signaled it likely won't raise the benchmark federal funds rate for the remainder of 2019, declining consumer confidence & political concerns. Despite the high number of execs who believe a downturn is coming, less than ½ said they have a defensive plan in place. About 39% of CFOs said their company had a detailed plan for a downturn, while 28% said they have already begun to take defensive steps. “Prior to 2017, CFOs’ top external risks focused heavily on slow economic growth,” the study said. “As global economic performance improved, CFOs’ top worries shifted toward threats to continued growth -- especially trade policy/tariffs and political turmoil.” Of the 151 respondents, 58 CFOs said they were most worried by the current US trade policy, in addition to tariffs. Following that were 31 CFOs, who said they were most worried about an economic risk & slowdown. The sentiment has been echoed by other studies, including a survey published in Jan by the Conference Board that found CEOs view a recession as their biggest external concern for 2019. Comparatively, in 2018, CEOs ranked the threat of a recession an afterthought, ranking it as their 19th most vital concern.
CFOs believe economic slowdown coming to US - and soon
Growth in the US services sector fell more than expected & reached its slowest pace in more than a year, according to data from the Institute for Supply Management (ISM). The ISM non-manufacturing index fell to 56.1 in Mar, the weakest print since Aug 2017, down from 59.7 in Feb. The index was expected to dip to 58. "The non-manufacturing sector's growth cooled off in March after strong growth in February," said Anthony Nieves, chair of the ISM. "Respondents remain mostly optimistic about overall business conditions and the economy. They still have underlying concerns about employment resources and capacity constraints." New orders, a key component of the overall index, fell by 6.2 points last month to 59. Meanwhile, prices increased by 4.3 points to 58.7. Stocks pared their initial gains on the ISM data, with the Dow briefly dipping into negative territory. The ISM report also follows weaker-than-expected jobs data released earlier in the day. Private payrolls increased by 129K last month, well below the expected print of 173K, according to ADP & Moody's Analytics. The private payrolls report is used by investors as a preview to the monthly US jobs report.
Services sector growth falls to slowest pace since August 2017
Leakers are saying a final US-China trade deal is near. But it's not complete yet. Nothing to do but await developments. Meanwhile economic data is not impressive & more of these kind of results can be expected. As an aside, REITs have been having an excellent year with the index (above) at new records. Even though this is not an exciting area for investors, yields are attractive.
Dow Jones Industrials
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