Dow fell 56, decliners over advancers about 2-1 & NAZ was off 41. The MLP index lost 1+ to the 247s. Junk bond funds inched higher & Treasuries were purchased again. Oil crawled higher on the 52s & gold added another 8 to 1352 (a more than 1 year high).
AMJ (Alerian MLP Index tracking fund)
Stocks are trading lower after Chinese industrial output for May came in below expectations. Chinese industrial production was up 5.5% year over year, the slowest pace of growth in 17 years, & another sign that trade tensions are hurting growth. Pres Trump said that he was holding up a trade deal with China & had no interest in moving ahead unless Beijing agrees again to 4 or 5 "major points" that Trump did not specify. In economic news, US retail sales increased in May & sales for the prior month were revised higher. The Commerce Dept said retail sales rose 0.5% last month as households bought more motor vehicles & a variety of other goods. Data for Apr was revised up to show retail sales gaining 0.3%, instead of dropping 0.2% as previously reported. Oil prices fell on fears trade disputes will dent global oil demand, although the attacks this week on 2 oil tankers in the Gulf of Oman gave prices a floor. Brent crude futures were up 9¢ at $61.40 a barrel, having gained 2.2% on yesterday. West Texas Intermediate crude futures were up 7¢ at $52.34.
US retail sales rise in May; April revised higher
US manufacturing output rose in May, the first monthly gain this year, as an increase in the production of motor vehicles & parts countered declines in the making of metals & aerospace equipment. The Federal Reserve said manufacturing production rose 0.2% last month, which was slightly higher than analysts in a poll that had expected but only a partial recovery from the prior month's sharp decline. The data could give some respite to concerns that the factory sector is sagging under the weight of a slowing global economy. US manufacturing output had contracted in Jan, Feb & Apr. Economists worry a trade war between the US & China is contributing to the global slowdown. Earlier today, a report showed Chinese industrial output growth unexpectedly slowed to more than a 17-year low. In May, US motor vehicles and parts production rose 2.4%. Excluding motor vehicles & parts, manufacturing output was flat. Primary metal production fell 1.9% last month, while output of fabricated metal products dipped 0.1%. The outlook for the US manufacturing sector, which accounts for about 12% of the economy, is also suffering as stimulus from last year’s $1.5T tax cut package diminishes. Overall industrial output, which includes utilities & mining production, rose 0.4% in May. Utilities output rose 2.1% & mining production crept up 0.1%. Capacity utilization for the manufacturing sector, a measure of how fully firms are using their resources, edged higher to 75.7% last month from 75.6% in Apr. Overall capacity utilization rose to 78.1% last month, which was 1.7% point below its 1972-2018 average. Officials at the Fed tend to look at capacity use measures for signals of how much “slack” remains in the economy & how far growth has room to run before it becomes inflationary.
US factory output posts first monthly growth of 2019
Stocks continue to adjust & react to the market advance in the first 2 weeks of Jun. The US economy is strong although growth is slowing. The bulls keep looking up at 27K for the Dow. Meanwhile safe have gold & Treasuries are in demand by negative thinkers.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 52.43 | +0.15 | +0.3% |
| GC=F | Gold | 1 ,354.60 | +10.90 | +0.8% |
Stocks are trading lower after Chinese industrial output for May came in below expectations. Chinese industrial production was up 5.5% year over year, the slowest pace of growth in 17 years, & another sign that trade tensions are hurting growth. Pres Trump said that he was holding up a trade deal with China & had no interest in moving ahead unless Beijing agrees again to 4 or 5 "major points" that Trump did not specify. In economic news, US retail sales increased in May & sales for the prior month were revised higher. The Commerce Dept said retail sales rose 0.5% last month as households bought more motor vehicles & a variety of other goods. Data for Apr was revised up to show retail sales gaining 0.3%, instead of dropping 0.2% as previously reported. Oil prices fell on fears trade disputes will dent global oil demand, although the attacks this week on 2 oil tankers in the Gulf of Oman gave prices a floor. Brent crude futures were up 9¢ at $61.40 a barrel, having gained 2.2% on yesterday. West Texas Intermediate crude futures were up 7¢ at $52.34.
US retail sales increased in May and sales for the prior month were revised higher, suggesting a pick-up in consumer spending that could ease fears the economy was slowing down sharply in Q2. The
Commerce Dept said retail sales rose 0.5% last
month as households bought more motor vehicles & a variety of other
goods. Data for Apr was revised up to show retail sales gaining 0.3%, instead of dropping 0.2% as previously reported. The forecast called for retail sales climbing 0.6% in
May. Compared to May last year, retail sales increased 3.2%. Excluding
automobiles, gasoline, building materials & food services, retail
sales advanced 0.5% last month after an upwardly revised 0.4% rise in Apr. Core retail sales correspond most
closely with the consumer spending component of GDP. They
were previously reported to have been unchanged in Apr. Consumer
spending accounts for more than 2/3 of economic activity. The
solid gains in core retail sales in Apr & May suggested consumer
spending was gaining speed in Q2 after braking sharply
in Q1. That could see
economists raising Q2 GDP growth estimates, which are
currently below a 2.0% annualized rate. The economy grew at a 3.1% pace in Q1 after getting a temporary
boost from exports & an accumulation of inventory. Exports
dropped in Apr & inventory investment is slowing. In addition,
manufacturing production and home sales fell in Apr. The outlook for
consumer spending is mixed. While consumer confidence remains strong,
wage growth retreated in May & hiring moderated sharply. Overall,
the economy is losing steam as the stimulus from last year's $1.5T tax cut & increased gov spending dissipates. The trade
war between the US & China, which escalated recently, is
also hurting the economy.
US retail sales rise in May; April revised higher
US-China trade talks may have hit an impasse as Chinese Pres Xi Jinping has yet to commit to a meeting with Pres Trump at this month's G20 summit in Japan. The
Trump administration has threatened to impose additional tariffs on
$325B of Chinese export if no trade deal is reached. White House trade adviser Peter Navarro said tariffs are working against China's economy with Chinese manufacturing
weakening & more western companies leaving the communist country. “[China]
pays for those tariffs because they are exporting less to us. They are
forced to lower their prices. They are earning few prices. The Chinese
government is seeing the unemployment rate effective negatively,” he
said. Navarro added it is important to remind the American public of China's long
history of imposing its economic aggression against the US in the form
of intellectual property theft, cyber intrusion & currency
manipulation. The trade war between the world's 2 largest
economies has also affected the Trump administration's efforts to combat
the opioid crisis. Trump has blamed China for not doing enough to curb the influx of opioids that has contributed to the fentanyl overdose epidemic in the US. “Something
that I feel very strongly about, the dumping of these opioids and
fentanyl into our country, killing tens of thousands of people in often
beleaguered manufacturing communities that China hallowed out to begin
with,” Navarro said.
Trump tariffs is impeding China’s economy: White House trade adviser Peter Navarro
US manufacturing output rose in May, the first monthly gain this year, as an increase in the production of motor vehicles & parts countered declines in the making of metals & aerospace equipment. The Federal Reserve said manufacturing production rose 0.2% last month, which was slightly higher than analysts in a poll that had expected but only a partial recovery from the prior month's sharp decline. The data could give some respite to concerns that the factory sector is sagging under the weight of a slowing global economy. US manufacturing output had contracted in Jan, Feb & Apr. Economists worry a trade war between the US & China is contributing to the global slowdown. Earlier today, a report showed Chinese industrial output growth unexpectedly slowed to more than a 17-year low. In May, US motor vehicles and parts production rose 2.4%. Excluding motor vehicles & parts, manufacturing output was flat. Primary metal production fell 1.9% last month, while output of fabricated metal products dipped 0.1%. The outlook for the US manufacturing sector, which accounts for about 12% of the economy, is also suffering as stimulus from last year’s $1.5T tax cut package diminishes. Overall industrial output, which includes utilities & mining production, rose 0.4% in May. Utilities output rose 2.1% & mining production crept up 0.1%. Capacity utilization for the manufacturing sector, a measure of how fully firms are using their resources, edged higher to 75.7% last month from 75.6% in Apr. Overall capacity utilization rose to 78.1% last month, which was 1.7% point below its 1972-2018 average. Officials at the Fed tend to look at capacity use measures for signals of how much “slack” remains in the economy & how far growth has room to run before it becomes inflationary.
US factory output posts first monthly growth of 2019
Stocks continue to adjust & react to the market advance in the first 2 weeks of Jun. The US economy is strong although growth is slowing. The bulls keep looking up at 27K for the Dow. Meanwhile safe have gold & Treasuries are in demand by negative thinkers.
Dow Jones Industrials
No comments:
Post a Comment