Dow retreated 232 (near session lows), advancers slightly ahead of decliners & NAZ finished down 11. The MLP index slid lower to the 225s & the REIT index added 2 to the 385s. Junk bond funds fluctuated & Treasuries finished pretty much even, after yields gained sharply in Feb (more below). Oil was up 1+ to 77 & gold advanced 11 to 1836 following recent selling (more below).
AMJ (Alerian MLP Index tracking fund)
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US consumer confidence unexpectedly fell for the 2nd straight month in Feb as Americans' outlook on the economy tumbled further, showing how persistent inflation is weighing on shoppers amid looming recession fears. The Conference Board's latest Consumer Confidence Index declined to 102.9 for this month, slipping from 106.0 in Jan, which was revised lower. The forecast had expected Feb's index to tick up to 108.5. "The decrease reflected large drops in confidence for households aged 35 to 54 and for households earning $35,000 or more," said Ataman Ozyildirim, the Conference Board's senior director of economics. Consumers' assessment of the current business climate also worsened in Feb, with 17.8% of respondents answering that business conditions were "good," down from 19.9% in Jan. However, more consumers said the labor market was more favorable this month, with 52% saying jobs were "plentiful," up from 48.1%. Still, the survey indicated Americans' have a dismal view of how economic conditions look in the near future. "Expectations for where jobs, incomes, and business conditions are headed over the next six months all fell sharply in February," Ozyildirim reported, noting that "consumers may be showing early signs of pulling back spending in the face of high prices and rising interest rates." "Fewer consumers are planning to purchase homes or autos and they also appear to be scaling back plans to buy major appliances," the economist added. "Vacation intentions also declined in February."
Consumer confidence slips again as recession fears mount
Treasury yields rose, adding to their sharp Feb gains,
as traders weigh the prospects of higher tighter monetary policy for
longer. The yield on the benchmark 10-year Treasury note was up 3 basis points at 3.955% after touching a high of
3.983%, its highest level since Nov 10. Meanwhile, the yield on the 30-year Treasury bond gained 3 basis points to trade at 3.95%. The
2-year yield climbed slightly to 4.8% after reaching its highest level
since Nov yesterday. Yields move inversely to prices. Today marks the final day of trading in Feb. The 10-year Treasury
yield has advanced more than 50 basis points for the month & the 2-year yield has gained more than 70 basis points. Those
gains come as traders increasingly bet on Federal Reserve rates staying
higher for longer, as recent data points to persistent inflation. The
core personal consumption expenditures price index rose 4.7% in Jan
from the year-earlier period, beating expectations. The overall PCE index advanced 5.4% year over year, also more than expected.
10-year Treasury yield hits highest level since November
General Motors & Tesla topped the S&P Global S&P Global Mobility report on customer loyalty for 2022. GM (GM) had the best combined performance for a manufacturer that sells multiple brands, while Tesla (TSLA) ranked number one among specific brands for the first time. Ford (F) held the position for the last 12 years. "The past three years have been a challenge for the automotive industry," said Joe LaFeir, Pres, Automotive Insights, S&P Global Mobility. "As customers are returning back to market post pandemic and inventory levels have slowly improved from last year's lows, retaining loyal customers has been more challenging than ever before." The shortages and other issues helped push industry average down from 54.6% to 50.2%, according to the review of over 11.7M sales from Jan-Dec 2022. GM had a 65.4% retention rate & also led five individual vehicle categories, including small utility vehicle with the Chevrolet Equinox & luxury sports car with the Chevrolet Corvette. "We continue doing what we do best: delivering industry-leading quality and earning customers for life," GM CEO Mary Barra said. "For the eighth consecutive year, General Motors received S&P Global Mobility's Overall Loyalty to Manufacturer award – a result of smart investments, strong execution and great teamwork. As we rapidly expand our #EV lineup this year, I’m excited to continue leading core segments and offering a portfolio that amazes our existing and new customers." Along with hanging on to 67.2% of its customers, TSLA also had the highest conquest sales & led the small car & utility segments with the Model 3 & Model Y.
Study finds which automakers have the most loyal customers
Gold futures climbed, but registered their first monthly loss in 4 months. Market expectations reflect a Federal Reserve reaching a 5.25-5.50% target fed funds range by mid-year, but with inflation continuing to surprise higher, investors are likely seeking some shelter from inflation pressures in the commodity complex, including gold. Gold for Apr rose $11 (0.7%) to settle at $1836 an ounce. For the month, prices for the most-active contract lost 5.6%
Gold Futures Post First Monthly Decline Since October
US benchmark crude-oil prices climbed, but marked a 4th monthly loss in a row. Oil prices have fallen for the month due to an extremely warm winter in the US & Europe. In addition, recent mixed data on inflation & associated hawkish Federal Reserve commentary have been a headwind for oil as the $ strengthened & stock prices came off of highs. US benchmark West Texas Intermediate crude for Apr rose $1.37 (1.8%) to settle at $77.05 a barrel. Based on the front-month contract, prices lost 2.3% for the month.
Oil Futures Rally For The Session, Fall For The Month
After Jan's market rise, Dow sank 1430 in Feb. Even safe haven gold lost ground in Feb. Not a good time for investors. Worries about more rate hikes by the Fed which could bring on a recession in the coming months are everywhere. Going into the new month stocks face more headwinds as interest rates jump.
Dow Jones Industrials
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