Dow went up 148, advancers over decliners 4-1 & NAZ gained 140. The MLP index was up 1+ to the 291s & the REIT index rose 3+ to the 378s. Junk bond funds were mixed & Treasuries had limited buying which reduced yields slightly (more below). Oil edge lower in the 85s & gold was steady at a record 2314.
AMJ (Alerian MLP Index tracking fund)
The pace of job
cuts by US employers accelerated again in Mar, a sign the labor
market is starting to deteriorate in the face of ongoing inflation &
high interest rates. A new report by Challenger,
Gray & Christmas, found that companies planned 90K job cuts
in Mar, a 7% increase from the previous month & a 0.7% increase
from the same time last year. It marked the highest monthly layoff total since Jan 2023. "Layoffs certainly ticked up to round out the first quarter, though
still below last year’s levels," said Andy Challenger, senior VP of Challenger, Gray & Christmas. "Many companies appear to
be reverting to a ‘do more with less’ approach." Technology companies
bore the brunt of the job losses in Mar, with the industry shedding
14K employees. In total, the tech sector has lost 42K jobs since
the start of the year. The gov followed with 36K layoffs
in Mar, including 10K jobs from Veterans Affairs & 24K from
the army. It marks the highest monthly total for the sector since
2011. Financial firms have also seen a sharp jump in layoffs so far this year,
slashing 29K positions during the first qtr. However, that is
down about 6% from the 30K cuts announced during the equivalent time
period in 2023. Another source of layoffs in Mar was transportation companies,
which have trimmed 16K jobs since the start of the year, a stunning
483% increase from the same time last year. The top reason cited
for job cuts last month was cost-cutting, which accounted for 66K of
the layoffs during the first qtr. Companies also blamed
restructuring, stores closing, poor market conditions & bankruptcy. On
the other end of the spectrum, companies planned to add just 37K
positions during the first qtr, a 48% drop from the same period last
year. It is the lowest number of announced hiring plans since 2016.
Job cuts jump to highest level since January 2023
Ford (F) is delaying production of a new all-electric large SUV & pickup
truck, as it shifts to offer hybrid options across its entire North
American lineup by 2030. The automaker said it will continue to invest in EVs, but it is postponing production of
the 3-row SUV at a plant in Canada to 2027 from its initial plan of
2025. The next-generation pickup, codenamed “T3,” is being pushed back
from late 2025 to 2026. The shift in EV plans is the latest for Ford & the entire automotive industry as adoption has been slower than many expected & production costs remain high. Ford last year said it would delay or cancel $12B
in planned spending on new electric vehicles due to the shifting market
conditions as well as challenges to profitably building & selling the
vehicles. It was not immediately clear whether the new delays were part
of those plans. “As the No. 2 EV brand in the U.S. for the past
two years, we are committed to scaling a profitable EV business, using
capital wisely and bringing to market the right gas, hybrid and fully
electric vehicles at the right time,” Ford CEO Jim Farley said. The 3-row SUV was part of a roughly $1.3B investment
to transition Ford's Oakville Assembly Plant in Ontario, Canada, into a
new electric vehicle hub. It was supposed to be Ford's first time
completely retooling a North American facility producing gas-powered
vehicles into one that manufactures EVs. “The additional time will
allow for the consumer market for three-row EVs to further develop and
enable Ford to take advantage of emerging battery technology, with the
goal to provide customers increased durability and better value,” the
company said. Ford added that it will continue to focus its EV efforts on new plants such as its “BlueOval
City” campus in Tennessee rather than transitioning current facilities
producing engine-powered vehicles to all-electric models. “Our breakthrough, next-generation EVs will be new from the ground up
and fully software enabled, with ever-improving digital experiences and a
multitude of potential services,” Farley said. The stock was up 12¢.
Ford to delay all-electric SUV, truck to focus on offering hybrid vehicles across its lineup by 2030
The 10-year Treasury yield was slightly lower as investors closely monitored speeches from a host of Federal Reserve officials &d awaited the release of Mar nonfarm payrolls tomorrow. The benchmark Treasury traded more than 2 basis points lower at 4.329%, after briefly touching 4.429% yesterday, a new high for the year & the 2-year Treasury note yield traded marginally lower at 4.672%. Yields & prices move in opposite directions & 1 basis point equals 0.01% or 1/100th of a %. Today, data showed initial jobless claims increased more than expected last week, hitting their highest level since late Jan. Additional data released by the Commerce Dept showed an increase in the trade deficit to $68.9B in Feb, slightly higher than the estimate. Fed Chair Jerome Powell on Wed said it would take a while for policymakers to evaluate the current state of inflation, leaving the timing of potential interest rate cuts uncertain. “On inflation, it is too soon to say whether the recent readings represent more than just a bump,” Powell said. Interest rates futures suggest the central bank will keep rates unchanged at the Fed's May policy meeting, according to the CME Fed WatchTool. Futures reflect a 56% chance of a cut at the Fed's Jun gathering, down significantly from a 70% chance seen a week ago.
10-year Treasury yield dips as investors look ahead to Friday jobs report
Dow opened the day higher, but the gains were trimmed in the last hour. The data above for more jobs cuts & dreary news on EV sales plus high interest rates suggest the economy is not as strong as some had been hoping for. Tomorrow's jobs figures will be watched closely.
Dow Jones Industrials
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