Dow slid back 1, advancers slightly ahead of decliners & NAZ climbed 23. The MLP index was fractionally lower to 201 & the REIT index gained 4+ to the 434s for another record. Junk bond funds hardly budged in price & Treasuries were bid higher. Oil advanced in the 51s & gold rose 6 to 1585 (close to multi years highs).
AMJ (Alerian MLP Index tracking fund)
The Trump administration is working to introduce a middle-class cut plan by Sep, according to National Economic Council Director Larry Kudlow. During a meeting in the Oval Office, he said, Pres Trump urged Kudlow to "get it out by September," which would be 2 months before the 2020 election. "It'll come out sometime in September," Kudlow said. The administration, he said, will likely use the Office of Management & Budget Director Russell Vought's $1.4T budget request to craft the package & make tax cuts permanent. Kudlow said the administration plans to give the middle class a 10% tax cut in addition to strengthening & making permanent "some of the other tax cuts." Many of the individual tax cuts in the Tax Cuts & Jobs Act of 2017 expire in 2025.
Growth ground to a halt at the end of the year in Germany, Europe's largest economy, as manufacturing remained in a slump & exports fell. The figure underlines the challenge facing the eurozone. The state statistics agency said there was zero growth in Q4 & a mediocre 0.6% increase for the whole year. Germany's troubles are a central problem for the 19-country eurozone economy & the ECB, which is trying to stimulate flagging growth & inflation with negative interest rates & bond purchases with newly printed money. Germany has been a manufacturing & export champion in recent years but those areas have been sluggish while consumer spending & services businesses have held up better & kept the country out of recession. Slowing global trade & the uncertainty caused by the US-China conflict over trade have been one headwind. Another is structural change in industry, particularly the auto business, where companies must sink Bs into developing electric cars & new services based on smartphone apps, both to meet regulatory pressure for lower greenhouse gas emissions & to head off competition from new entrants from the tech industry.
US industrial production fell 0.3% in Jan as unseasonably warm weather held down the output of utilities & Boeing (BA), ,a Dow stock, slowed production of civilian aircraft, the Federal Reserve said. Manufacturing production fell 0.1% in Jan, matching forecasts, but Dec's manufacturing output was revised lower to a 0.1% gain from a previously reported 0.2% gain. Overall industrial output for Dec was revised downward to a 0.4% reduction from a previously reported 0.3% drop. The forecast was for industrial output to fall 0.2% in Jan, with manufacturing output forecast to be down 0.1%. On an annualized basis, production at factories fell 0.8% in Jan, mirroring the annualized drop in overall industrial production. Production of aerospace & miscellaneous transportation equipment fell 7.4% in Jan after a 0.5% increase in Dec. The drop reflects BA's halt this year of its grounded 737 MAX aircraft. This was somewhat offset by a rise in vehicle assemblies to 11.29M units on an annualized basis. Manufacturing output excluding motor vehicles & parts fell 0.3% in Jan. Capacity usage at factories, mines & utilities fell to 76.8%, the lowest since Sep 2017, from 77.1% in Dec. US utility production fell 4.0% in Jan after a 6.2% drop in Dec, while output at mines rose 1.2% in Jan after a 1.5% increase in Dec.
Stocks have returned to looking for direction. The market is overbought which suggests there will be profit taking. Economic data & trade issues are unclear presently. Traders are waiting for more direction which should come next week. The Dow remains near the important 30K milestone while safe haven gold is also close to multi year highs. Hmmm!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 52.10 | +0.68 | +1.3% |
| GC=F | Gold | 1,583.90 | +5.10 | +0.3% |
The Trump administration is working to introduce a middle-class cut plan by Sep, according to National Economic Council Director Larry Kudlow. During a meeting in the Oval Office, he said, Pres Trump urged Kudlow to "get it out by September," which would be 2 months before the 2020 election. "It'll come out sometime in September," Kudlow said. The administration, he said, will likely use the Office of Management & Budget Director Russell Vought's $1.4T budget request to craft the package & make tax cuts permanent. Kudlow said the administration plans to give the middle class a 10% tax cut in addition to strengthening & making permanent "some of the other tax cuts." Many of the individual tax cuts in the Tax Cuts & Jobs Act of 2017 expire in 2025.
Kudlow reveals when middle class can expect to see 'tax cuts 2.0'
Growth ground to a halt at the end of the year in Germany, Europe's largest economy, as manufacturing remained in a slump & exports fell. The figure underlines the challenge facing the eurozone. The state statistics agency said there was zero growth in Q4 & a mediocre 0.6% increase for the whole year. Germany's troubles are a central problem for the 19-country eurozone economy & the ECB, which is trying to stimulate flagging growth & inflation with negative interest rates & bond purchases with newly printed money. Germany has been a manufacturing & export champion in recent years but those areas have been sluggish while consumer spending & services businesses have held up better & kept the country out of recession. Slowing global trade & the uncertainty caused by the US-China conflict over trade have been one headwind. Another is structural change in industry, particularly the auto business, where companies must sink Bs into developing electric cars & new services based on smartphone apps, both to meet regulatory pressure for lower greenhouse gas emissions & to head off competition from new entrants from the tech industry.
Massive economy grinds to halt as manufacturing slumps, exports fall
US industrial production fell 0.3% in Jan as unseasonably warm weather held down the output of utilities & Boeing (BA), ,a Dow stock, slowed production of civilian aircraft, the Federal Reserve said. Manufacturing production fell 0.1% in Jan, matching forecasts, but Dec's manufacturing output was revised lower to a 0.1% gain from a previously reported 0.2% gain. Overall industrial output for Dec was revised downward to a 0.4% reduction from a previously reported 0.3% drop. The forecast was for industrial output to fall 0.2% in Jan, with manufacturing output forecast to be down 0.1%. On an annualized basis, production at factories fell 0.8% in Jan, mirroring the annualized drop in overall industrial production. Production of aerospace & miscellaneous transportation equipment fell 7.4% in Jan after a 0.5% increase in Dec. The drop reflects BA's halt this year of its grounded 737 MAX aircraft. This was somewhat offset by a rise in vehicle assemblies to 11.29M units on an annualized basis. Manufacturing output excluding motor vehicles & parts fell 0.3% in Jan. Capacity usage at factories, mines & utilities fell to 76.8%, the lowest since Sep 2017, from 77.1% in Dec. US utility production fell 4.0% in Jan after a 6.2% drop in Dec, while output at mines rose 1.2% in Jan after a 1.5% increase in Dec.
Industrial output falls on weather, Boeing drop in January
Stocks have returned to looking for direction. The market is overbought which suggests there will be profit taking. Economic data & trade issues are unclear presently. Traders are waiting for more direction which should come next week. The Dow remains near the important 30K milestone while safe haven gold is also close to multi year highs. Hmmm!
Dow Jones Industrials
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