Markets slide lower in choppy trading as interest rates rise

Dow fell 1217 (session lows), advancers barely ahead of decliners & NAZ sank 361.  The MLP index rose 2+ to the 167s & the REIT index fell 1+ to the 378s.  Junk bond funds drifted lower & Treasuries saw more selling.  Oil gained 1+ to the 61s & gold tumbled 20 to 1713 (more on both below).

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Nordstrom (JWN) reported better-than-expected results for the holiday qtr, aided by a rise in e-commerce sales & growth in its off-price business, Rack.  Pandemic-induced declines in household income & high unemployment rates have led to a spike in demand for affordable clothing, which boosted Rack's business for JWN that also benefited from a greater shift to online shopping.  Sales at Rack decreased 23% from a year earlier, but were better than previous qtr's 32% slump, while digital sales of about $2B accounted for 54% of the retailer's business.  The retailer said overall trends improved sequentially throughout the qtr, with improvements in both JWN & Rack.  JWN, like other retailers, has been investing heavily on e-commerce, as consumers shift to shopping online in the wake of the health crisis.  The retailer reiterated its revenue forecast & said it will grow more than 25% this year, with digital accounting for ½ of the sales & its plans to increase the items it offers to more than 1.5M from about 300K.  Total revenue fell 19.7% to $3.65B in Q4.  The forecast was $3.6B.  EPS was 21¢, well above the estimate of 14¢.  The stock fell 1.34.
If you would like to learn more about JWN, click on this link:
club.ino.com/trend/analysis/stock/JWNa_aid=CD3289&a_bid=6ae5b6f7

Nordstrom racks up on off-price stores and online sales

The US economy expanded modestly over the 6 weeks ended in mid-Feb, according to the Federal Reserve's Beige Book survey of current economic conditions.  Business contacts were optimistic about the rest of the year as COVID-19 vaccines become available, but now, things were only getting better slowly, the survey showed.  On the crucial question of inflation, the report found a mixed picture.  Some retailers & manufacturers were able to raise prices, but many others were not.  Employment levels rose only gradually over the period.  Some wage gains were seen in high-demand positions.  Wages gains were expected “to persist or pick up” in many regions of the country.  Most districts reported that nonfinancial services – a key sector badly damaged by the pandemic – saw only modest growth.  Despite supply-chain disruptions, manufacturing activity in most districts increased moderately.  Economists are busy revising up their growth forecasts for H2 & seem to be looking thru this report, as there is not much to celebrate in this survey.  There is more of a sense of the economy grinding along in a low gear.

Fed’s Beige Book finds only modest improvement in economy

Gold futures fell to end the session at their lowest in nearly 9 months, as Treasury yields resumed their rise & the $ firmed, pressuring prices for the precious metal.  The move comes a day after gold posted its first gain in 6 sessions.   Gold for Apr lost $17 (1%) to settle at $1715 an ounce after touching an intraday low at $1699.  The settlement was the lowest for a most-active contract since Jun 8.  The slide for the precious metal follows a gain in prices yesterday after 5 straight declines.  The analysts said that they could foresee gold scoring a bounce in the shorter run but are growing more bearish to neutral on the asset in the longer term, against a backdrop of rising yields & expectations that further US fiscal stimulus will boost the economy & inflation.  Yesterday, gold took a slight leg lower after private-sector payroll data from Automatic Data Processing, rose by 117K jobs in Feb after increasing 195K in the prior month.  The forecast was for a gain of 225K private sector jobs in Feb.  Gold prices showed little reaction to separate data showing the final IHS Markit Services reading at 59.8 in Feb, up from an initial 58.9, but the ISM services survey fell to a (-month low of 55.3% in Feb from a 2-year high of 58.7% in Jan.

Gold ends near a 9-month low as bond yields rise and dollar firms

Oil futures ended higher, finding support following a report that OPEC & its allies (OPEC+) were considering rolling over production cuts into Apr instead of easing them.  Prices continued to climb after the Energy Information Administration (EIA) reported a hefty increase of more than 21M barrels in last week's US crude inventories, along with significant declines in petroleum-product inventories.  An OPEC+ advisory committee meeting held today offered no recommendation on Apr output levels.  Traders had been looking for the group of major producers to ease output curbs in Apr, allowing production to rise by around 500K barrels a day.  A report sai that some OPEC+ members had argued for maintaining existing curbs into Apr amid worries over fragile demand.  The report said it was unclear whether Saudi Arabia, which unilaterally cut production 1M barrels a day in Feb & Mar, would extend its reduction.  Meanwhile, it was also reported that OPEC+ was poised to go ahead with production increases.  An OPEC+ advisory committee meeting held today offered no recommendation on Apr output levels.  Traders had been looking for the group of major producers to ease output curbs in Apr, allowing production to rise by around 500K barrels a day.  Reuters on Wednesday reported that some OPEC+ members had argued for maintaining existing curbs into Apr amid worries over fragile demand.  Oil prices extended their gain after data from the EIA showed that US  crude inventories jumped up by 21.6M barrels for last week.  The forecast was for a climb of 1.3M barrels.  The American Petroleum Institute on yesterday reported a nearly 7.4M-barrel climb.

Oil ends higher on talk of potential OPEC+ rollover of production cuts

Stocks traded mixed after sliding a day earlier, as investors weighed optimism over widespread post-pandemic business reopenings against concerns over economic overheating.  Tech shares were sold in the PM, dragging NAZ lower.  The stimulus bill is in the Senate waiting for attention.  And interest rates keep rising, making investors nervous.  The chart below shows the Dow has been flattish for about a month.

Dow Jones Industrials