Dow lost 28, decliners modestly ahead of advancers & NAZ were off 2. The MLP index added 1 to the 256s & the REIT index dropped 3+ to the 369s. Junk bond funds were little changed & Treasuries slid lower in price. Oil fluctuated in the 64s & gold was flattish at 1276.
AMJ (Alerian MLP Index tracking fund)
The US trade deficit narrowed in Feb as American exports grew faster than the rate of imports, a positive sign for economic growth in Q1. The foreign-trade gap in goods & services contracted 3.4% from the prior month to a seasonally adjusted $49.38B in Feb, the Commerce Dept said, smaller than the trade deficit of $53.8B expected.
US wholesale inventories increased less than expected in Feb as sales rose for a 2nd straight month. The Commerce Dept said wholesale inventories climbed 0.2% to a record $668.9B. Data for Jan was revised down to show wholesale inventories advancing 1.2% instead of 1.4% previously reported. Wholesale inventories increased 6.9% on a year-on-year basis in Feb. The forecast called for inventories at wholesalers rising 0.5%. The component of wholesale inventories that goes into the calculation of GDP gained 0.2% in Feb. Despite Feb's modest rise, inventory accumulation is expected to contribute to GDP growth in Q1. Growth estimates for the Jan-Mar qtr are in a 1.5-2.3% annualized range. The economy grew at a 2.2% rate Q4, stepping down from the Jul-Sep period's brisk 3.4% pace. The inventory build, however, will likely weigh on GDP in Q2 as businesses place fewer orders with manufacturers while disposing the unwanted goods. In Feb, wholesale auto inventories edged up 0.1% after surging 1.5% in the prior month. The auto sector has experienced an inventory overhang because of weak sales. Wholesale apparel inventories jumped 1.8%. Sales at wholesalers increased 0.3% in Feb after climbing 0.5% in Jan. There were increases in sales of motor vehicles, furniture, professional equipment & electrical goods. But sales of wholesale groceries dropped 2.1%, the most since Apr 2004. At Feb's sales pace it would take wholesalers 1.35 months to clear shelves, unchanged from Jan.
Wholesale inventories rise less than expected in February
The Chinese growth data looks reasonably good while other economic data & earnings are getting mixed reviews. The Dow continues a little under its record highs, unable to break thru to new records while the NAZ hovers near 8K. Earnings news may not be good enough to attrack enough buyers needed for the Dow to reach 27K.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 64.03 | -0.02 | -0.0% |
| GC=F | Gold | 1,277.30 | +0.10 | +0.0% |
China's economic growth held to a 6.4% rate in Q1 as factory production picked up significantly amid signs
authorities worked forcefully to stabilize business following months of weakness. The 6.4% expansion during Q1 was the 2nd straight at that level but
remained below 2018's 6.6% full-year rate, according to official data. The pace was slightly higher than what many expected & appeared buoyed by a powerful rebound in some
key drivers. Industrial production, after a lackluster start to the
year, surged 8.5% in Mar from a year earlier. Retail sales for the
qtr were stronger than expected along with property investment. While China's economy has been on a slow downtrend
this past decade, weighed down by debt & excess capacity, a
sharper-than-expected slowdown hit last year, exacerbated by severe
trade tensions with the US. The gov now appears to be stepping
up work to arrest the slide. Many economists prepared for a weaker Q1 performance, & the year's nadir, on belief that stable
activity in consumer & services sectors would be offset by sluggish
investment in fixed assets, such as factories & bridges. Beijing
took tentative steps in recent months to address cash crunches at many
businesses with new & targeted stimulus including tax cuts &
red-tape curbs. It also gave a nod to local govs to spend on
infrastructure, a partial unwinding of the central gov's credit
squeeze that began 2 years ago in an effort to arrest the buildup of
debt. Money supply also picked up visibly in Mar, a sign of credit
easing. A
spokesman for the National Bureau of Statistics told a
media briefing that China's domestic economy has performed
well, especially against a backdrop of weak intl trade &
other unfavorable conditions, due to gov actions such a cut in
value-added taxes. The data was described “relatively stellar.” Also
boosting sentiment is an easing of trade tensions between the US &
China that put off some investors last year. Months of trans-Pacific
negotiations to freeze or reverse some or all of the punitive tariffs on
hundreds of B$s of goods the countries trade appear to be making progress. Bets
that a deal is within reach are helping lift business confidence &
underpin markets in China: the Shanghai Composite Index has gained more
than 5% in Apr after posting a 24% gain in Q1, its best qtr in 5 years. That reflects, in part, how
Beijing, eager to attract cash, is allowing foreigners to invest in new
ways.
WATCH: China economic growth tops expectations on robust manufacturing
The US trade deficit narrowed in Feb as American exports grew faster than the rate of imports, a positive sign for economic growth in Q1. The foreign-trade gap in goods & services contracted 3.4% from the prior month to a seasonally adjusted $49.38B in Feb, the Commerce Dept said, smaller than the trade deficit of $53.8B expected.
U.S. Trade Gap Narrowed in February
US wholesale inventories increased less than expected in Feb as sales rose for a 2nd straight month. The Commerce Dept said wholesale inventories climbed 0.2% to a record $668.9B. Data for Jan was revised down to show wholesale inventories advancing 1.2% instead of 1.4% previously reported. Wholesale inventories increased 6.9% on a year-on-year basis in Feb. The forecast called for inventories at wholesalers rising 0.5%. The component of wholesale inventories that goes into the calculation of GDP gained 0.2% in Feb. Despite Feb's modest rise, inventory accumulation is expected to contribute to GDP growth in Q1. Growth estimates for the Jan-Mar qtr are in a 1.5-2.3% annualized range. The economy grew at a 2.2% rate Q4, stepping down from the Jul-Sep period's brisk 3.4% pace. The inventory build, however, will likely weigh on GDP in Q2 as businesses place fewer orders with manufacturers while disposing the unwanted goods. In Feb, wholesale auto inventories edged up 0.1% after surging 1.5% in the prior month. The auto sector has experienced an inventory overhang because of weak sales. Wholesale apparel inventories jumped 1.8%. Sales at wholesalers increased 0.3% in Feb after climbing 0.5% in Jan. There were increases in sales of motor vehicles, furniture, professional equipment & electrical goods. But sales of wholesale groceries dropped 2.1%, the most since Apr 2004. At Feb's sales pace it would take wholesalers 1.35 months to clear shelves, unchanged from Jan.
Wholesale inventories rise less than expected in February
The Chinese growth data looks reasonably good while other economic data & earnings are getting mixed reviews. The Dow continues a little under its record highs, unable to break thru to new records while the NAZ hovers near 8K. Earnings news may not be good enough to attrack enough buyers needed for the Dow to reach 27K.
Dow Jones Industrials
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