Dow soared 329 (closing near session highs), advancers over decliners 5-2 & NAZ went up an impressive 99. The MLP index added 2+ to the 257s & the REIT index was off 1 to the 279s (still lofty levels for the index). Junk bond funds also rose as they were purchased & Treasuries were hit with selling pressure, taking the yield on the 10 year Treasury up a very big 8 basis points to about 2.5%. Oil jumped up 1+ to the 61s (more below) & gold fell 6 to 1292.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Manufacturing activity in China expanded unexpectedly in Mar at its fastest pace in 8 months, a private survey showed. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) came in at 50.8 for Mar. Analysts had expected it to come in at 49.9 for a 2nd month. A reading below 50 signals contraction, while a reading above that level indicates expansion. New orders climbed to their highest level in 4 months, while the index for new export orders returned to expansionary territory, "showing that both domestic & external demand rebounded moderately," according to the CEBM Group, a subsidiary of Caixin. Markit & Caixin said that staffing levels at factories rose in Mar to mark their first expansion since Oct 2013. Some firms also hired additional workers to support greater production & new business developments, they added. "Overall, with a more relaxed financing environment, government efforts to bail out the private sector and positive progress in Sino-U.S. trade talks, the situation across the manufacturing sector recovered in March," said the survey director. Results of the private survey came after data showed the official Purchasing Managers' Index rose to 50.5 in Mar from Feb's 3-year low of 49.2. It marked the first expansion in 4 months, according to data released by China's National Bureau of Statistics. The manufacturing numbers come amid ongoing tariff talks between the US & China aimed at resolving their trade differences. High-level trade negotiations between the 2 economic powerhouses are set to resume in DC this week following last week's talks in Beijing. The Caixin PMI is a private survey focused on smaller businesses & offers a first glimpse into the operating environment. It is closely watched as an alternative to the official PMI.
China's factory activity unexpectedly grows in March, a private survey shows
The S&P 500 just posted its best start to a year in more than 2 decades & according to a majority of professionals, the market outlook remains positive. More than 96% of respondents to CNBC's survey said they do not see a recession in the next year & about 70% saying they are optimistic. Not a single strategist among the 27 respondents had a negative outlook. Just under 30% are neutral overall, which is lower than the 34% from last qtr's survey. Stocks started the year on a strong foot after a steep slide at the end of 2018. Fears that rocked markets in Q4 — namely concerns over a global growth slowdown, uncertainty surrounding ongoing trade negotiations between the US & China & worries that the Federal Reserve might be making a policy mistake, seemed to abate over the last qtr. Investors reentered the market in Jan, leading to a gain over 13% YTD for the S&P. A solid majority, 81%, said they believe stocks are correctly valued. Just under 15% said equities look cheap, while less than 4% think valuations are stretched. Some bears have cited a slowdown in corp earnings as a reason to get out of the market. While Q1 earnings expectations may be negative, according to the latest data which is expected to contract 1.9%, a majority of pros are still optimistic. About 59% said they believe results will top expectations, with 22% expecting earnings to match estimates. Part of this optimism could be a belief that companies were overly conservative when lowering expectations. As Brexit uncertainty, weakness in Japan & falling German yields weigh on global markets, US equities saw record inflows last month, according to Bank of America Merrill Lynch. While the picture in the US might not be entirely rosy, ¾ of survey respondents said it is still the best place to invest. Nearly 78% said they favor the US, with about 19% saying emerging markets is the better bet. The EEM (an ETF that tracks emerging economies) has gained roughly 10% this year. Tech is the top-performing sector this year & a majority of respondents indicated that they believe the group will continue to lead. Nearly 78% called it a top pick. Health care & energy were 2 other popular choices, with roughly 48% & 30%, respectively, of strategists saying they look attractive at current levels. Health care did turn in a positive Q1, but its 6% gain lagged all other sectors. Energy is one of only 2 sectors still in correction territory, more than 10% off its recent high. Financials is the sole other sector in correction & about 26% of pros saying they think there's opportunity in bank stocks.
Majority of Wall Street pros say no recession on the horizon, US still best place to be: CNB
Oil bulls began Q2 where they left off the first, pushing crude sharply higher on signs of tightening supplies & fading worries over global economic growth. West Texas Intermediate crude for May delivery rose $1.45 (2.4%) to settle at $61.59 a barrel, its highest close since Nov 7. The US benchmark logged a 32.4% rise over the first 3 months of 2019, its strongest quarterly advance since the Q2-2009. The global benchmark, Jun Brent crude ended $1.43 higher at $69.01 a barrel, a 2.1% gain. Brent logged a roughly 25% quarterly rise, also its strongest since 2009. Bloomberg said its survey found output from OPEC will fall for a 4th month in Apr, with Saudi Arabia continuing to curb output & Venezuelan production suffering as an economic & political crisis deepened. OPEC output fell 295K barrels a day to 30.385M, the survey found. Another survey found OPEC members pumped 30.4M barrels a day in Mar, down 280K barrels a day from Feb & the lowest OPEC total since 2015. Demand-side optimism picked up after the Caixin-Markit China manufacturing purchasing managers index rose above 50 in Mar, indicating growth. The Feb reading came in below 50, which showed economic contraction. But analysts cautioned that rising prices could lead to a pickup in US output after a recent stall in drilling activity. Futures prices remain solidly higher YTD on signs of reduced global supplies on the back of efforts by major oil producers to curb production. Members of OPEC & other major oil producers, including Russia, have pledged to curb crude production by around 1.2M barrels a day from Oct levels for H1 to prop up markets.
A high level of optimism brought out stock buyers today. They are feeling good about the new qtr even if the last one was sluggish. This level of optimism will be tested. The US economy will have to show a significant pickup, currently plagued with 2 major sectors (home building & autos) stumbling. The US-China trade talks need a lot more work, to say the least. Brexit is going nowhere fast & other economies are not doing well. The Fed should be helpful for investors if there are no more rate hikes this year. And safe haven investments (gold & Treasuries) were sold recently. To make the bulls happy, the global economies will have to deliver growth to support the current level of optimism.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Manufacturing activity in China expanded unexpectedly in Mar at its fastest pace in 8 months, a private survey showed. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) came in at 50.8 for Mar. Analysts had expected it to come in at 49.9 for a 2nd month. A reading below 50 signals contraction, while a reading above that level indicates expansion. New orders climbed to their highest level in 4 months, while the index for new export orders returned to expansionary territory, "showing that both domestic & external demand rebounded moderately," according to the CEBM Group, a subsidiary of Caixin. Markit & Caixin said that staffing levels at factories rose in Mar to mark their first expansion since Oct 2013. Some firms also hired additional workers to support greater production & new business developments, they added. "Overall, with a more relaxed financing environment, government efforts to bail out the private sector and positive progress in Sino-U.S. trade talks, the situation across the manufacturing sector recovered in March," said the survey director. Results of the private survey came after data showed the official Purchasing Managers' Index rose to 50.5 in Mar from Feb's 3-year low of 49.2. It marked the first expansion in 4 months, according to data released by China's National Bureau of Statistics. The manufacturing numbers come amid ongoing tariff talks between the US & China aimed at resolving their trade differences. High-level trade negotiations between the 2 economic powerhouses are set to resume in DC this week following last week's talks in Beijing. The Caixin PMI is a private survey focused on smaller businesses & offers a first glimpse into the operating environment. It is closely watched as an alternative to the official PMI.
China's factory activity unexpectedly grows in March, a private survey shows
The S&P 500 just posted its best start to a year in more than 2 decades & according to a majority of professionals, the market outlook remains positive. More than 96% of respondents to CNBC's survey said they do not see a recession in the next year & about 70% saying they are optimistic. Not a single strategist among the 27 respondents had a negative outlook. Just under 30% are neutral overall, which is lower than the 34% from last qtr's survey. Stocks started the year on a strong foot after a steep slide at the end of 2018. Fears that rocked markets in Q4 — namely concerns over a global growth slowdown, uncertainty surrounding ongoing trade negotiations between the US & China & worries that the Federal Reserve might be making a policy mistake, seemed to abate over the last qtr. Investors reentered the market in Jan, leading to a gain over 13% YTD for the S&P. A solid majority, 81%, said they believe stocks are correctly valued. Just under 15% said equities look cheap, while less than 4% think valuations are stretched. Some bears have cited a slowdown in corp earnings as a reason to get out of the market. While Q1 earnings expectations may be negative, according to the latest data which is expected to contract 1.9%, a majority of pros are still optimistic. About 59% said they believe results will top expectations, with 22% expecting earnings to match estimates. Part of this optimism could be a belief that companies were overly conservative when lowering expectations. As Brexit uncertainty, weakness in Japan & falling German yields weigh on global markets, US equities saw record inflows last month, according to Bank of America Merrill Lynch. While the picture in the US might not be entirely rosy, ¾ of survey respondents said it is still the best place to invest. Nearly 78% said they favor the US, with about 19% saying emerging markets is the better bet. The EEM (an ETF that tracks emerging economies) has gained roughly 10% this year. Tech is the top-performing sector this year & a majority of respondents indicated that they believe the group will continue to lead. Nearly 78% called it a top pick. Health care & energy were 2 other popular choices, with roughly 48% & 30%, respectively, of strategists saying they look attractive at current levels. Health care did turn in a positive Q1, but its 6% gain lagged all other sectors. Energy is one of only 2 sectors still in correction territory, more than 10% off its recent high. Financials is the sole other sector in correction & about 26% of pros saying they think there's opportunity in bank stocks.
Majority of Wall Street pros say no recession on the horizon, US still best place to be: CNB
Oil bulls began Q2 where they left off the first, pushing crude sharply higher on signs of tightening supplies & fading worries over global economic growth. West Texas Intermediate crude for May delivery rose $1.45 (2.4%) to settle at $61.59 a barrel, its highest close since Nov 7. The US benchmark logged a 32.4% rise over the first 3 months of 2019, its strongest quarterly advance since the Q2-2009. The global benchmark, Jun Brent crude ended $1.43 higher at $69.01 a barrel, a 2.1% gain. Brent logged a roughly 25% quarterly rise, also its strongest since 2009. Bloomberg said its survey found output from OPEC will fall for a 4th month in Apr, with Saudi Arabia continuing to curb output & Venezuelan production suffering as an economic & political crisis deepened. OPEC output fell 295K barrels a day to 30.385M, the survey found. Another survey found OPEC members pumped 30.4M barrels a day in Mar, down 280K barrels a day from Feb & the lowest OPEC total since 2015. Demand-side optimism picked up after the Caixin-Markit China manufacturing purchasing managers index rose above 50 in Mar, indicating growth. The Feb reading came in below 50, which showed economic contraction. But analysts cautioned that rising prices could lead to a pickup in US output after a recent stall in drilling activity. Futures prices remain solidly higher YTD on signs of reduced global supplies on the back of efforts by major oil producers to curb production. Members of OPEC & other major oil producers, including Russia, have pledged to curb crude production by around 1.2M barrels a day from Oct levels for H1 to prop up markets.
Oil surges to nearly 5-month high on tightening supply, fading worries over global growth
A high level of optimism brought out stock buyers today. They are feeling good about the new qtr even if the last one was sluggish. This level of optimism will be tested. The US economy will have to show a significant pickup, currently plagued with 2 major sectors (home building & autos) stumbling. The US-China trade talks need a lot more work, to say the least. Brexit is going nowhere fast & other economies are not doing well. The Fed should be helpful for investors if there are no more rate hikes this year. And safe haven investments (gold & Treasuries) were sold recently. To make the bulls happy, the global economies will have to deliver growth to support the current level of optimism.
Dow Jones Industrials
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