Dow inched up 1, advancers ahead of decliners about 3-1 & NAZ added 1. The MLP index stayed range-bound in the 282s & the REIT index was up 2+ to the 288s after yesterday's advance. Junk bond funds hardly budged & Treasuries were about even ahead of the big inflation report tomorrow (when the stock market is closed). Oil rose 1 to the 82s & gold jumped another 20 to 2032 for another record.
AMJ (Alerian MLP Index tracking fund)
Treasury yields climbed as investors considered the path ahead for interest rates following the latest comments from Federal Reserve officials & ahead of key economic data. The yield on the 10-year Treasury was unchanged at 4.20% & the 2-year Treasury yield was last up by 3 basis points at 4.60%. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Investors weighed the outlook for monetary policy & looked ahead to key economic data as uncertainty around when & how often interest rates will be cut this year persists. Traders were last pricing in an around 60% chance of rates being cut in Jun. Federal Reserve Governor Christopher Waller said there was “no rush” to cut interest rates, adding that recent economic data indicated that rates may need to stay elevated for longer. Waller added that the data told him “that it is prudent to hold this rate at its current restrictive stance perhaps for longer than previously thought to help keep inflation on a sustainable trajectory toward 2 percent.” Today, the latest weekly jobless claims came in at 210K, slightly lower than the 211K forecast.
2-year Treasury yield rises as investors mull interest rate outlook
The collapse of a major Baltimore bridge & its knock-on effects could result in the biggest-ever marine insurance payout, the chair of insurance giant Lloyd's of London said. Analysts have forecast that insured losses from the disaster would amount to a figure in the single-digit Bs, after a huge cargo ship crashed into the Francis Scott Key Bridge on Tuesday. 6 people are presumed dead. “We’re beginning to deploy resources in anticipation of this being a very substantial claim for the industry. And for the Lloyd’s market, it’s going to take some time for for the complexity of the situation to unravel,” Bruce Carnegie-Brown said. “So, [it’s] very early days to call a number. I don’t at this point anticipate that it’s outside our realistic disaster scenario planning. It feels like a a very substantial loss, potentially the largest-ever marine insured loss, but not outside parameters that we plan for.” Carnegie-Brown added that, while there would clearly be claims for the ship, cargo & the bridge, it is “second-order impacts” that would become “substantial.” “A lot of business is going to be interrupted, supply chains are going to be interrupted by ships that are both trapped inside the port and of course, ships that were trying to gain access to the port that no longer can, and those second order effects will take some time to work through,” he added. Baltimore is the 11th biggest port in the US & the country's busiest for the import & export of autos & light trucks. Supply chain operators are scrambling to minimize the impact on trade. Morningstar DBRS analysts said that insured losses could total $2-4B, depending on the length of time that the port is blocked. Such a figure would surpass the current highest amount, which was paid out from the capsizing of the Costa Concordia cruise ship in 2012.
Baltimore disaster may be the largest-ever marine insurance payout, Lloyd’s boss says
China's economy is ending the first qtr on a “strong” note, according to a business survey published by the China Beige Book. “The economy clearly improved in March, thanks to better industrial activity and stronger retail spending,” said Shehzad H. Qazi, COO at the China Beige Book, a US-based research firm. China's official data on retail sales, industrial production & fixed asset investment for Jan & Feb beat expectations across the board. Figures for the first 2 months of the year are typically reported together to account for the week-long Lunar New Year holiday, which follows the agrarian calendar. The China Beige Book said it surveyed 1436 businesses on Mar 1-23, split roughly between state-owned & non-state-owned firms. “China Beige Book’s March data show the economy poised for a strong end to Q1,” the report said. “Revenue growth accelerated atop last month while pricing gains boosted margins.” China earlier this month announced the country would target growth of around 5% for the year. Some analysts said it was an ambitious target given the current level of announced gov stimulus. The China Beige Book found that businesses have pulled back their borrowing due to higher interest rates, but also observed signs of a pause on the lending side. “Market observers have largely missed the substantial policy easing we’ve tracked over the past year, and now some lenders may be hitting the brakes,” the report said. “Hiring recorded its longest stretch of improvement since late 2020,” the report said, noting every sector except for services saw job growth pick up. Retail spending increased in all sub-sectors, except for luxury goods, the report added. In real estate, the report said that while the residential sector still showed a decline in sales, commercial sales & construction improved significantly. Manufacturing saw growth in production & domestic orders from Feb, but export orders fell. Official data showed investment into real estate fell 9% in the first 2 months of the year from a year ago. Investment in infrastructure rose by 6.3% during that time, while manufacturing saw a 9.4% increase.
China’s economy is on track for ‘strong’ March performance, survey says
Trading is sluggish with some traders starting the long weekend early. The inflation report tomorrow will get a lot of attention. Dow is up a very hefty 2K so far this year!Dow Jones Industrials
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