Markets bounce back but remain lower in February

Dow climbed 291, advancers over decliners better than 2-1 & NAZ went up 137.  The MLP index added 1+ to the 321s & the REIT index added 2+ to the 207s.  Junk bond funds were mixed & Treasuries had modest buying which lowered yields (more below).  Oil slid back into the 69s after yesterday's rally on worries over tariffs & gold dropped another 42 to 2853.

Dow Jones Industrials

The Federal Reserve's preferred inflation gauge showed prices rose as expected in Jan at a pace that remains above the central bank's target level as its efforts to tamp down inflation continue.  The Commerce Dept reported that the personal consumption expenditures (PCE) index was up 0.3% from the prior month & 2.5% on an annual basis.  Those figures were in line with the estimates.  Core PCE, which excludes volatile food & energy prices, rose 0.3% for the month & 2.6% from a year ago, in line with estimates.  Federal Reserve policymakers are focusing on the PCE headline figure as they try to slow the pace of price increases to their target of 2%, though they view core data as a better indicator of inflation.  Headline PCE declined slightly from 2.6% in Dec, while core PCE dropped from 2.9% last month.  Headline PCE showed that prices for goods increased 0.5% after they had been relatively flat in recent months.  Prices for services rose 0.2% last month, which was a slower pace than the 0.4% in Dec.  Wages & salaries were up 0.4% in Jan from a month ago, the same as the increase seen in Dec.  The personal savings rate as a percentage of disposable income was 4.6% in Jan, the highest rate recorded since 4.8% in Jun.

Inflation gauge favored by Fed showed prices grew as expected in January

China’s Ministry of Commerce said that it “firmly opposes” PresTrump's latest threat to ramp up tariffs on Chinese goods & vowed retaliation, if necessary.  “If the U.S. insists on its own way, China will take all necessary countermeasures to defend its legitimate rights and interests,” a Ministry of Commerce spokesperson said.  “We urge the U.S. side to not repeat its own mistakes, and to return as soon as possible to the right track of properly resolving conflicts through dialogue on equal footing.”  The statement followed Trump's announcement yesterday that the US would impose an additional 10% duty on Chinese imports on March 4, which coincides with the start of China’s annual parliamentary meetings.  The new tariffs would be on top of the 10% further tariffs that Trump levied on China on Feb 4.  Trump announced the 2 rounds of China duties were being imposed in response to the Asian country's role in the fentanyl trade.  The addictive drug, precursors to which are mostly produced in China & Mexico, has led to tens of thousands of overdose deaths each year in the US.  “In the short term, China’s response will likely include raising tariffs on select U.S. imports, adding more American firms to its unreliable entity list, and potentially further tightening export controls on critical minerals,” Neil Thomas, a fellow on Chinese politics at the Asia Society, said.  He noted he nevertheless expects Beijing’s retaliation will remain “measured,” as Chinese Pres Xi Jinping has an incentive to meet with his American counterpart & initiate negotiations to avoid measures that put greater pressure on already sluggish economic growth.  China's exports have been a rare bright spot in an otherwise slowing economy.  The US is China's largest trading partner on a single-country basis.  While Beijing may maintain a “restrained” stance, upcoming moves will likely target industries that matter the most to Trump supporters, said Alfredo Montufar-Helu, head of the China Center at The Conference Board.

China vows to retaliate as necessary after Trump threatens more tariffs

Treasury yields moved lower as investors sifted through new economic data, including inflation numbers that largely matched expectations.  The benchmark 10-year yield Treasury yield fell by about 5 basis points to 4.241% & the 10-year yield Treasury yield was down 4 basis points at 4.034%.  1 basis point is equal to 0.01% & yields & prices move in opposite directions.  The personal consumption expenditures index rose 0.3% month over month in Jan & 2.5% year over year. The core PCE index, which excludes volatile food & energy prices, also rose 0.3% last month compared to Dec & 10-year yield Treasury yield.  Those readings were in-line with expectations.  Investors are anxiously monitoring Pres Trump's various tariff threats & orders.  His plans for 25% tariffs on imports from Mexico & Canada will go into effect from Mar 4, after a 1-month pause.  Trump said that China, which is already being charged tariffs, will face an additional 10% tariff on the same data.  He also said he would impose 25% tariffs on imports from the EU but is walking back these threats after UK Prime Minister Keir Starmer visited the White House yesterday.  “I think there is a very good chance that in the case of these two great friendly countries, I think we could end up with a real trade deal ... where the tariffs wouldn’t be necessary. We’ll see,” Trump told reporters.

10-year Treasury yield eases slightly after inflation data comes in as expected

Stocks inched higher following a key inflation reading that largely met expectations & as fresh tariff threats added to uncertainty over Big Tech prospects.  Markets are heading into the last trading day of Feb facing sharp weekly & monthly losses after suffering the buffets of tariff moves.

Markets fall with selling in Nasdaq stocks leading the decline

Dow dropped 193 with selling in the PM, decliners over advancers 2-1 & NAZ plunged 530 (session low).  The MLP index was flattish in the 321 & the REIT index added 2+ to 415.  Junk bond funds fluctuated & Treasuries had limited selling, lifting yields.  Oil rose 1+ taking it over 70 & gold tumbled 30 to 280 (more on both below).

Dow Jones Industrials

Initial filings for unemployment benefits hit their highest level of the year last week in another potential signs of weakness in the labor market.  Jobless claims for last week totaled a seasonally adjusted 242K, up 22K from the previous week's revised level & higher than the estimate for 225K, according to a Labor Dept report.  The level of claims matched the highest since early Oct 2024 & comes amid questions over broader economic growth & worrying signs in recent consumer sentiment surveys.  Pres Trump has been taking aggressive measures to reduce the federal workforce through Elon Musk's Dep of Gov Efficiency advisory board.  The efforts so far have resulted in tens of thousands of jobs cuts & are expected to continue.  In DC, new claims totaled 2K, an increase of 421 (26%) according to numbers not adjusted for seasonal factors.  That is the largest number for the city since Mar 25, 2023, according to Labor Dept  records, & is consistent with a surge that began in early Jan.  However, the claims trend does not appear to be spreading to the surrounding areas.  Virginia & Maryland both saw small declines on the week.  California, which also has a large population of federal gov workers, saw a drop as well.  “This report showed a healthy gain, but not the first ripples of what likely will be a major wave of unemployment claims, both from layoffs in the federal workforce and at companies such as Starbucks and Southwest,” wrote Robert Frick, corp economist at Navy Federal Credit Union.  Continuing claims, which run a week behind, showed a small decrease and stood at 1.86M.  However, the 4-week moving average of claims, which helps smooth out weekly volatility, rose sharply to 224K, an increase of 8500.

Weekly jobless claims jump to 242,000, more than expected in latest sign of economic softening

Nvidia (NVDA), the chipmaker at the center of an AI spending boom, delivered good-but-not-great quarterly numbers, disappointing investors accustomed to blowout results.  Sales will be about $43B in the fiscal first qtr, which runs through Apr, NVDA said.  Analysts had estimated $42.3B with some projections ranging as high as $48B.  The company also warned that gross profit margins would be tighter than anticipated as it rushes to roll out a new chip design called Blackwell.  And there's the risk of US tariffs weighing on results.  The mixed outlook comes at a shaky time for the AI industry.  NVDA shares have dipped this year on concerns that data center operators will slow spending.  Chinese startup DeepSeek also has sparked fears that chatbots can be developed on the cheap, potentially reducing the need for NVDA's powerful chips for AI.  Though NVDA execs addressed most of those issues, it's become harder for the company to produce blockbuster earnings reports.  The company got $11B of revenue from Blackwell in the 4th qtr, something NVDA described as the “fastest product ramp” in its history.  “Demand for Blackwell is amazing,” CEO Jensen Huang said.  Though the company's fiscal 4th-qtr sales topped estimates, they did so by the smallest margin since Feb 2023.  Earnings, meanwhile, had the narrowest amount of upside since Nov 2022.  The stock dropped 9.42 (7%).

Nvidia Sinks After More Subdued Growth Fails to Wow Investors

Mortgage rates fell for a 6th consecutive week to the lowest level in more than 2 months, mortgage buyer Freddie Mac said.  Freddie Mac's latest Primary Mortgage Market Survey, showed that the average rate on the benchmark 30-year fixed mortgage decreased to 6.76% from last week's reading of 6.85% & the average rate on a 30-year loan was 6.94% a year ago.  "The drop in mortgage rates, combined with modestly improving inventory, is an encouraging sign for consumers in the market to buy a home," said Sam Khater, Freddie Mac's chief economist.  The average rate on the 15-year fixed mortgage fell to 5.94% from 6.04% last week.  1 year ago, the rate on the15-year fixed note averaged 6.26%.  Mortgage rates ranged from 6.91% to 7.04% in Jan & the National Association of Realtors (NAR) said that in comparison to 1 year ago, the monthly mortgage payment on a $300K home increased by an extra $50 to $1590.

Mortgage rates fall to lowest level in over 2 months

Gold prices dropped to their lowest level in over 2 weeks as the $ strengthened, with investors waiting for key inflation data that could shed light on the Federal Reserve's monetary policy path.  Spot gold was down 1.1% at $2885 an ounce, after hitting its lowest level since Feb 12 earlier in the session.  Prices hit a record high of $2956 on Mon, driven by safe-haven flows.  US gold futures settled 1.2% lower at $2895.  The direction of gold is very evident & these short-term bumps & profit-taking is just a normal part of the cycle.  The dollar index, opens new tab rose 0.7%, making greenback-priced bullion more expensive for holders of other currencies.  Investors' focus now turns to the US Personal Consumption Expenditures (PCE) index due tomorrow, expected to remain at 0.3%.  Any significant deviation from the estimated PCE data could trigger a negative reaction, based on concerns that the Fed is less likely to lower interest rates.  Markets expect the Fed to deliver at least 2 rate cuts this year, with about 55 basis points of easing priced in for 2025.

Gold hits two-week low with firm dollar, inflation data in focus
 
Oil prices rose more than 2% as supply concerns resurfaced after Pres  Donald Trump revoked a license granted to US oil major Chevron (CVX) opens new tab to operate in Venezuela.  However, investors were still keeping an eye on signs of a potential peace deal in Ukraine, which could result in higher Russian oil flows.  Brent crude oil futures were up $1.53 (2.1%) at $74.06 a barrel & US West Texas Intermediate crude oil futures rose $1.64 (2.4%) to $70.26.  The contracts had settled in the previous session at their lowest levels since Dec 10.  Markets like clarity as opposed to uncertainty.  Unless a clear path is presented on tariffs & Eastern European peace, oil prices will remain on the defensive with sporadic & spontaneous headline-based rallies.  The CVX license revocation means the company will no longer be able to export Venezuelan crude.  And if Venezuelan state oil company PDVSA exports oil previously exported by CVX, US refineries will be unable to buy it because of US sanctions.  CVX exports about 240K barrels per day (bpd) of crude from its Venezuela operations, more than a qtr of the country's entire oil output.

Oil climbs more than 2% after Trump cancels Chevron's Venezuela license

Tech stocks led the major averages lower as NVDA shares sold off following the AI chipmaker's its earnings report & investors took stock of the economy amid Pres Trump's latest tariff pledges.  Investors dug into NVDA's quarterly earnings beat, which signaled plenty of scope for growth as it eased worries about DeepSeek & faltering AI demand.  Meanwhile, more signs emerged of a sluggish US economy.  Data today showed GDP grew at an unrevised 2.3% annualized pace last qtr, confirming a slowdown from the previous qtr.

Markets seasaw despite Trump tariffs declaration & Nvidia's earnings

Dow jumped 429, advancers were only even & NAZ was off 39.  The MLP index slid 1 to 320 & the REIT index added 3+ to 416.  Junk bond funds were mixed & Treasuries saw more selling which increased yields.  Oil rebounded 1+ to 70 after Trump moves to end Venezuela crude deal & gold dropped 41 to 2889 on profit taking.

Dow Jones Industrials

The US economy grew at a rate of 2.3% in the 4th qt, in line with the prior reading & expectations.  The Commerce Department's Bureau of Economic Analysis (BEA) released its first revision of the estimate for 4th qtr GDP, which found the US economy grew at an annual rate of 2.3% in the 4th qtr, which runs from Oct-Dec.  The forecast had expected the economy to grow at a 2.3% rate in the qtr.  The BEA's preliminary estimate of GDP in the qtr that was released last month also came in at 2.3%, though the forecast had expected 2.6% growth.  GDP growth slowed in the 4th qtr when compared with the 3rd qtr, which had 3.1% growth.  The BEA noted the deceleration in the 4th qtr was primarily due to downturns in investment & exports that were partially offset by an acceleration in consumer spending, while imports declined.  Consumer spending  grew 4.2% in the 4th qtr, with increases in both services & goods.  It was up from 3.7% in the 3rd quarter and 2.8% in the 2nd qtr.  Gov spending grew at a faster pace than initially estimated – it was up 2.9% in the 4th qtr, a larger increase than the initial 2.5% estimate, though it was slower than the 5.1% increase in the 3rd qtr.  Business investment declined 5.7% in the 4th qtr, a deeper drop than the initial estimate of 5.6%.  It had been relatively flat in the 3rd qtr, when it grew 0.8%.  Last qtr, investment in equipment decreased 9% while investment in structures dipped 3.2% – both steeper declines than in the initial estimate.  Personal savings as a share of disposable income came in at 3.8% in the 4th qtr, continuing a gradual decline that spanned 2024 after a 5.4% reading in the first qtr.

US economy grew during final months of Biden's presidency

Pres Trump said that his proposed tariffs on Mexico & Canada will go into effect on Mar 4, & that China will be charged an additional 10% tariff on the same date.  The sweeping 25% tariffs on imports from Mexico & Canada had been paused on Feb 3 for 1  month. But the Trump administration has recently sown confusion about whether they would go back into effect when the delays expired.  Trump clarified that they would.  He claimed that illicit drugs “are still pouring into our Country from Mexico and Canada at very high and unacceptable levels,” despite pledges from both US neighbors to boost their efforts to police their borders.  “We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” Trump wrote.  He also announced that China, which already faces 10% US tariffs on its products, “will likewise be charged an additional 10% Tariff on that date.”  Trump added in his post, “The April Second Reciprocal Tariff date will remain in full force and effect.”  A White House official confirmed that the new duties on Beijing mean US tariffs on Chinese imports will total 20%.

Trump says Mexico, Canada tariffs will start March 4, plus additional 10% on China

High mortgage rates & elevated home prices combined to crush home sales in Jan.  Pending sales, which are based on signed contracts for existing homes, dropped 4.6% from Dec to the lowest level since the National Association of Realtors (NAR) began tracking this metric in 2001.  Sales were down 5.2% from Jan 2024 & these sales are an indicator of future closings.  “It is unclear if the coldest January in 25 years contributed to fewer buyers in the market, and if so, expect greater sales activity in upcoming months,” said Lawrence Yun, NAR's chief economist.  “However, it’s evident that elevated home prices and higher mortgage rates strained affordability.”  While weather may have been a factor, sales rose month-to-month in the Northeast & fell in the West, which would have seen the smallest impact of cold temperatures.  Sales fell hardest in the South, which has been the most active region for home sales in recent years.  Mortgage rates were also higher in Jan.  The average rate on the popular 30-year fixed loan spent the first ½ of Dec below 7% but then began rising.  It was solidly above 7% for all of Jan, according to Mortgage News Daily.  Home prices have been easing over the last few months in certain areas, with more sellers cutting prices, but nationally they are still higher than they were a year ago.  This drop in sales also came despite the fact that the inventory of homes for sales in Jan, including homes that were under contract but not yet sold, increased by 17% compared with last year, growing on an annual basis for the 14th month in a row, according to Realtor.com.  “More for-sale inventory has the potential to generate more contract signings, but climbing home supply is not evenly distributed across the U.S.,” noted Hannah Jones, an economist with Realtor.com.  “Moreover, many areas with high demand see relatively low for-sale inventory, which limits progress towards more home sales.”

Pending home sales drop to the lowest level on record in January

Stocks were mixed as investors weighed AI chipmaker Nvidia's (NVDA) earnings report & took stock of the economy amid President Trump's latest tariff pledges.  Investors are digging into NVDA's quarterly earnings beat, which signaled plenty of scope for growth as it eased worries about DeepSeek & faltering AI demand.  The results initially met a muted response as its profit outlook raised doubts & the stock erased early trading gains to slip more than 2%.

Markets struggle while safe haven gold continues over $2900

Dow dropped 188, decliners over advancers about 5-4 & NAZ slid back 48.  The MLP index remained in the 319s & the REIT index fell 2+ to the 412s.  Junk bond funds fluctuated & Treasuries had buying which reduced yields.  Oil was about even at 69 & gold added 20 to 2928 (more on both below).

Dow Jones Industrials

An ominous measure that the Federal Reserve considers a near surefire recession signal again has reared its head in the bond market.  The 10-year Treasury yield passed below that of the 3-month note in trading today.  In market lingo, that’s known as an “inverted yield curve,” & it's had a sterling prediction record over a 12- to 18-month timeframe for downturns going back decades.  In fact, the New York Fed considers it such a reliable indicator that it offers monthly updates on the relationship along with percentage odds on a recession occurring over the next 12 months.  At the end of Jan, when the 10-year yield was about 0.31 percentage point clear of the 3-month, the probability was just 23%.  However, that is almost certain to change as the relationship has shifted dramatically in Feb.  The reason the move is considered a recession indicator is the expectation that the Fed will cut short-term rates in response to an economic retreat in the future.  Though markets more closely follow the relationship between the 10 & 2-year notes, the Fed prefers measuring against the 3-month as it is more sensitive to movements in the central bank’s federal funds rate.  The 10-year/2-year spread has held modestly positive, though it also has flattened considerably in recent weeks.  To be sure, yield curve inversions have had a strong but not perfect forecasting history.  In fact, the previous inversion happened in Oct 2022, & there’s still been no recession 2½ years later.  So while there’s no certainty that growth will turn negative this time around, investors worry that expected growth from an ambitious agenda under Pres Trump may not happen.

The Fed’s favorite recession indicator is flashing a danger sign again

Mortgage interest rates dropped again last week, hitting the lowest level in 2 months, but demand for mortgages didn't respond.  Total mortgage application volume fell 1.2% from the previous week, according to the Mortgage Bankers Association's seasonally adjusted index.  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766K or less) decreased to 6.88% from 6.93%, with points dropping to 0.61 from 0.66 (including the origination fee) for loans with a 20% down payment.  “Treasury yields moved lower on softer consumer spending data as consumers are feeling somewhat less upbeat about the economy and job market.  This pushed mortgage rates lower, with the 30-year fixed rate decreasing to 6.88%, the lowest rate since mid-December,” said Joel Kan, MBA’s VP & deputy chief economist.  Applications to refinance a home loan, which had been surging through much of Jan early Feb, fell 4% for the week but were 45% higher than the same week 1 year ago.  Last year at this time, mortgage rates were 16 basis points higher.  “Although overall refinance application activity remained fairly weak, FHA refinance applications saw an 8 percent increase over the week,” Kan added. Applications for a mortgage to purchase a home were flat for the week & 3% higher than the same week 1 year ago.  The resale market is seeing more supply, partly because homes are sitting on the market longer.  But while there are more options, prices are not easing much, as inventories are still historically low.   “Long story short, bonds are in fashion at the moment,” wrote Matthew Graham, COO at Mortgage News Daily, noting that when demand rises, rates fall. “The broadest and most common explanations have to do with expectations for a downshift in global economic growth in response to domestic tariffs and cost-cutting efforts.”

Mortgage rates drop to lowest since mid-December, but demand still falls short

Eli Lilly (LLY) said it will invest at least $27B to build 4 new manufacturing sites in the US, as demand for its blockbuster weight loss and diabetes injections soars & the company develops new drugs for other conditions.  It comes as drugmakers & companies across different industries work to build goodwill with Pres Trump, who has emphasized reshoring manufacturing to the US & reducing reliance on foreign supply chains.  He has threatened companies, and pharmaceutical businesses in particular, with tariffs if they do not manufacture products in the US.  Eli Lilly made the announcement at an event in DC, emphasizing the political undertones of the strategy.  The event featured several speakers from the Trump administration, including Kevin Hassett, director of the White House National Economic Council, & Commerce Secretary Howard Lutnick, who explicitly tied the announcement to Trump’s policies.  Lutnick said the investment is “exactly what the Trump administration is all about, which is building and manufacturing and reshoring in America, investing in America, building in America.”  He thanked LLY for “doing exactly what the president was hoping would happen.”  Lutnick added that “if you want to understand the tariff policy” of the US, “I have just articulated it.”  The move brings LLY's total US manufacturing investments to more than $50B in recent years.  The other $23B is from the company’s investments in new plants & site expansions since 2020, which has helped ease supply shortages of its popular drugs.  The stock rose 15.57.

Eli Lilly plans at least $27 billion in new U.S. manufacturing investments

Gold prices eased after a recent record rally, while investors looked towards inflation data due later this week & the latest developments on Pres Trump's tariff plans.  Spot gold fell 0.7% to $2894 an ounce.  Bullion, a preferred hedge against uncertainty & inflation, hit a record high of $2956 on Mon amid trade war concerns emerging from tariff threats.  US gold futures fell 0.4% to $2908.  Yesterday, Trump ordered a probe into potential new tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, the power grid & many consumer goods.  Investors' focus was also on the US Personal Consumption Expenditures (PCE) report, the Federal Reserve's preferred inflation gauge, due on Fri.  Higher than expected inflationary could delay further rate cuts, which is priced in; gold is 1 of the quintessential hedges against those inflationary pressures.

Gold prices slip, investors eye upcoming US PCE data

Oil prices held at 2-month lows as a potential peace deal between Russia & Ukraine continued to weigh on prices while lower US crude stockpiles provided some support.  Brent crude was down 19¢ to $72.83 a barrel & US West Texas Intermediate crude oil futures fell by 13¢ to $68.80.  Prospects for a peace deal between Russia & Ukraine are improving & the market was also watching for potential implications of a minerals deal between the US & Ukraine.  This would take us a step closer to Russian sanctions being lifted, removing much of the supply uncertainty hanging over the market.  Downside risks on oil prices increased because Pres Trump's policies, such as initiatives to support higher oil exports by Iraq.  The US & Ukraine agreed terms of a draft minerals deal central to Trump's efforts to bring a swift end to the war in Ukraine.  Supporting price, US crude stocks fell by 640K barrels last week. 

Oil holds at two-month low on rising supply concern

Stocks pared gains after Pres Trump spoke about his tariff plans at a cabinet meeting as investors also braced for Nvidia's (NVDA) crucial earnings report due out after the bell.  The leg lower in stocks & risk assets came after Trump said tariffs against the EU would include 25% on autos among other goods, while levies against Mexico & Canada will go into effect on Apr 2.

Markets climb despite tariff threats and export controls

Dow went up 119, advancers over decliners 2-1 & NAZ gained 210.  The MLP index inched up 1+ to the 321s & the REIT index stayed in the 419s, yesterday's close.  Junk bond funds barely budged & Treasuries were even.  Oil was flat at 69 & gold recovered 7 at 2926.

Dow Jones Industrials

A new analysis by the Bank of America Institute finds that small businesses appear to be gaining financial momentum, though policy changes related to tariffs could spur inflation & with it a new challenge to profitability.  The Bank of America Institute's report analyzed the bank's small business account data & found that in the 6-month period from Aug-Jan, deposit growth among small business clients surpassed total payments growth for the first time in 3 years.  "The positive is that revenues are rising and we're seeing that for the first time over the past three years where deposits are outpacing payments, so that's really good momentum entering 2025 and small business optimism is up," Bank of America economist Taylor Bowley said.  "But that doesn't mean that there isn't still risk for cost pressures to curb small business enthusiasm and growth going forward."  While inflation has slowed substantially since its 40-year high of 2022, it remains elevated & its impact on wages has contributed to continuing cost growth for small businesses.  "Revenues seem to be rising, which is a really good thing because small businesses historically operate on pretty small profit margins," Bowley added.  "But the one thing is that costs don't necessarily seem to be declining."  Bowley said that payroll is 1 of the largest expense categories for small businesses & that wage inflation as it relates to payroll has been a key factor in rising costs faced by those companies, though workforce expansion may also be a factor.  "Wage inflation is not the sole driver in terms of what we're seeing with payroll growth. It's an indication that small businesses are still able to keep people on the payroll, and also potentially expand their labor force," she continued.

Small businesses seeing revenues rise, but tariff threats loom

Lowe's (LOW) topped quarterly earnings & revenue expectations & said its sales slump should end in the year ahead.  Full-year total sales are expected to $83.5-84.5B, which on the upper end would be higher than its total revenue of $83.7B for fiscal 2024.  It said it expects comparable sales to be flat to up 1% year over year & EPS to be $12.15 - $12.40.  CEO Marvin Ellison stressed that LOW still faces “a challenging home improvement market.”  High mortgage rates have created “a significant gap between today's rates for homebuyers and the lower rates many homeowners currently enjoy.”  That's led to a “lock-in effect,” which has kept consumers from buying & selling.  Even so, LOW has pressed ahead with its own strategy, so it is “well-positioned to capitalize on the home improvement recovery and take share when the market inflects.”  Shares rose after the company’s leaders said they expected sales trends to improve, but still be roughly flat from last year.  In the 3-month period that ended Jan 31, EPS was $1.99, compared with $1.77 in the year-ago period.  Revenue fell from $18.6B in the year-ago qtr.  Adjusted EPS figure excluded an $80M pretax gain associated with the 2022 sale of its Canadian retail business, which added 6¢ per share to 4th-qtr earnings.  In the fiscal 4th qtr, trends looked better.  Comparable sales rose 0.2%, boosted by online gains, high single-digit growth among home professionals & sales related to rebuilding efforts after hurricanes Milton & Helene.  That slightly positive metric ended 8 consecutive qtrs of comparable sales declines.  It also exceeded expectations for a 1.8% decline in comparable sales.  The stock jumped 9.09 (4%).

Lowe’s beats Wall Street expectations as it starts to break out of sales slum

General Motors (GM) is raising its quarterly div & initiating a new $6B share repurchase program as the company attempts to reward investors amid slowing industry sales & profits.  GM announced it is increasing its quarterly div 25% to 15¢ per share, matching that of crosstown rival Ford (F).  The higher div is expected to take effect with the company's next planned payout, scheduled to be announced in Apr.  Under the $6B repurchase plan, $2B in buybacks are expected to be completed during the  2nd qtr.  “The GM team’s execution continues to be strong across all three pillars of our capital allocation strategy, which are to reinvest in the business for profitable growth, maintain a strong investment grade balance sheet, and return capital to our shareholders,” said CEO Mary Barra.  Barra last month suggested the company would continue to return capital to shareholders this year, pending board approval.  The automaker has announced $16B in stock buyback programs since 2023 that have resulted in the retiring of more than 400K shares outstanding.  Despite such actions & reporting strong quarterly results, including regularly outperforming expectations, shares of GM are down more than 12% this year.  The stock rose 2.46.

GM raises quarterly dividend, initiates $6 billion stock buyback

Tech stocks led the US indices higher, eyeing a comeback investors for Nvidia's (NVDA) crucial earnings & assessed the prospects for Pres Trump's deep tax cuts.  Investors are looking to potentially lift stocks more broadly, given the AI bellwether's history of bullish reactions to earnings.  But its stock has lagged the stock market so far this year, & the chipmaker's prospects face headwinds from Trump's tariff threats & export controls.

Markets mixed as consumer confidence data weighed on investors

Dow finished up 159 in choppy trading, advancers over decliners 3-2 & NAZ dropped 260.  The MLP index slid back 1+ to the 319s & the REIT index jumped 5 to 415.  Junk bond funds continued to be mixed & Treasuries had heavy buying which sharply reduced yields.  Oil remained weak, down 1+ to 69, & gold tumbled 39 to 2923 on profit taking (more on both below).

Dow Jones Industrials

An expensive stock market didn’t prevent traders from getting more bullish as investors increasingly bet that the bull run could keep chugging along, according to Charles Schwab's new quarterly client survey.  The bulls continue to outnumber the bears among traders by 51% to 34%, said the survey, which polled 1040 active traders last month.  Young traders under the age of 40 especially showed a spike in optimism, with bullishness jumping to 59%.  That compares to 47% in the 4th qtr.  The positive sentiment came even as 2/3 of the traders believe the market is overvalued.  “It’s clear that the majority of traders believe there’s some froth in the market but on balance they also feel like there’s still more room for the bulls to run,” said James Kostulias, head of trading services at Charles Schwab.  “More than half of traders plan to move additional money into stocks in Q1.”  While bullishness indicates positive views on the market, it can also be seen as a contrary indicator when there are signs of excess.  In terms of sectors, traders are most bullish on energy, tech, finance & utilities.  These sectors are typically beneficiaries under the Trump administration due to potential deregulation.  The survey also detected a significant drop in the number of traders who believe a recession will occur in the US, only a 3rd of the respondents called it “somewhat likely,” compared to 54% in the prior qtr.  The majority of traders also didn’t see a reacceleration in inflation, with 2/3 of them seeing price pressures holding steady.

More traders turn bullish despite market showing signs of fatigue, Schwab survey says

US banking sector profits rose 2.3% to $66.8B in the 4th qtr of 2024, a bank regulator reported, as it also announced moves to update how so-called problem banks are tracked.  In its latest quarterly report, the Federal Deposit Insurance Corporation (FDIC) said it is revising its "problem bank" list to say only how many banks have been downgraded by regulators.  The FDIC will no longer disclose how many assets are held at those banks.  FDIC Acting Chair Travis Hill said that the practice of disclosing how many assets are at problem banks, first established in 1990, has become problematic because the growth of large firms has made it "comparatively easier" to identify when a big bank is added to the list.  Hill said disclosing assets could spur a bank run if the public saw a large jump in total assets on the list & tried to determine which large firm was deemed problematic by watchdogs.  Bank supervisors may also be reluctant to downgrade a large bank, knowing the jump in total assets at problem banks could spark instability, Hill added.  The FDIC reported 66 problem banks in the 4th qtr, down from 68 the prior qtr.  Overall, the banking sector reported healthy numbers, posting a 5.6% increase in 2024 year-long profits to $268B.  The FDIC said the boost in 4th-qtr profits was mainly due to recent short-term interest rate cuts, which helped boost net interest income by $3.8B for banks, as interest expenses shrank more than interest income.  The amount of funds banks set aside for potential losses was also down, dipping 5.5% from the prior qtr to $22B & unrealized losses on securities held by banks jumped 32.5%, & now total $482B.  However, that level is only 1% higher than levels seen 1 year prior.

US bank profits climb as regulator adjusts 'problem bank' tracking

Nvidia (NVDA) stock continued its recent slide as investors weighed potential delays in the ramp-up of its AI Blackwell chips & a report of possible new export rules from the Trump administration.  The stock dropped after a reported that the Trump administration is looking to further tighten US export rules on the chip sector in an effort to restrict China's advancement in the AI space.  Trump is looking to sanction specific Chinese companies & further restrict intl companies from maintaining semiconductor gear in the country.  The news comes more than a month after Chinese firm DeepSeek introduced new, cost-efficient AI models that rocked US markets.  NVDA stock fell 3.65.

Nvidia drops as investors weigh Trump export rules, Blackwell delays

Gold's price has hit a new all-time high yesterday at $2956, just hours before the Trump administration issued more details on upcoming tariffs.  The precious metal trades at $2940 currently, after Pres Trump's administration communicated it plans to impose more limitations on China's technological developments.  A tougher stance on semiconductor restrictions & pressuring other allies to corner China is part of that strategy.  The news creates a negative tone in gold markets today.  Traders are fleeing into bonds as a safe haven, which is pressuring yields for more downside (inverse correlation bond price to yield).  Equities are also being slaughtered, with red numbers across the board from Asia to Europe, including  US equities.

Gold consolidates Tuesday's losses with markets digesting latest tariff move from President Trump

Oil prices fell 3% to a 2-month low on weak economic news from the US & Germany that fed fears of slower energy demand, along with signs from several countries that oil output was on track to increase.  Brent futures fell $1.99 (2.7%) to $72.79, while US West Texas Intermediate (WTI) crude fell $1.92 (2.7%) to $68.78.  Brent was on track for its lowest close since Dec 23 & WTI for its lowest since Dec 10.  US data showed consumer confidence in Feb deteriorated at its sharpest pace in 3½ years, with 12-month inflation expectations surging.  Analysts said Pres Trump's stated plans for higher tariffs have raised inflation worries at the US Federal Reserve.  This could lead the Fed to keep interest rates higher, which in turn could slow economic growth & energy demand.  Trump said tariffs against Canadian & Mexican imports scheduled to start on Mar 4 are on time & on schedule, which could actually boost oil prices by reducing supplies from both countries.  Also weighing on oil prices, the German economy shrank by 0.2% in the final qtr of 2024 from the previous qtr.  German election winner Friedrich Merz ruled out a quick reform to state borrowing limits known as the "debt brake," which some investors have urged to boost the economy.

Oil Hovers at 2-Month Low

Stocks fell when Pres Trump revived tariff threats & potential toughening of China curbs weighed on market optimism & the chances of interest rate cuts.  Consumer confidence also plummeted in Feb, notching its biggest monthly decline in more than 4 years as 12-month inflation expectations jumped & recession fears escalated.

Markets retreat after weak consumer confidence

Dow fell 67, advancers & decliners were the same & NAZ retreated 337.  The MLP index dropped 4+ to the 316s & the REIT index rose 6 to 416.  Junk bond funds fluctuated & Treasuries saw buying which reduced yields.  Oil was off 1+ to 69 as tariff threat hurts demand outlook & gold sank 47 to 2915.

Dow Jones Industrials

Consumers grew more pessimistic about the economic outlook in Feb as worries brewed about a slowing economy & rising inflation, the Conference Board reported.  The board's Consumer Confidence Index slipped to 98.3 for the month, down 7 points & below the forecast for 102.3.  This was the lowest reading since Jun 2024 & the largest monthly drop since Aug 2021.  "Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income," said Stephanie Guichard, the board's senior economist for global indicators.  "Pessimism about future employment prospects worsened and reached a ten-month high."  The decline in consumer confidence comes with Pres Trump threatening additional tariffs against US trading partners.  Trump said that duties against Canada & Mexico "will go forward" in Mar after a delay in Feb.  Economists worry that the tariffs could spark another round of inflation at a time when the Federal Reserve is weighing whether to lower interest rates further or hold steady as policymakers weigh the impact of Trump's aggressive fiscal & trade policy moves.  Though most economic indicators reflect continued growth, the Conference Board gauge matches other recent surveys showing waning confidence.  Last week, the University of Michigan reported a larger-than-expected monthly decrease of nearly 10% in Feb while the 5-year inflation outlook among respondents hit its highest level since 1995.  Along with the overall drop in confidence, the Expectations Index tumbled 9.3 points to a 72.9 reading, the first time since Jun 2024 that the measure has fallen below the level consistent with recession.  However, the current conditions measured improved somewhat, with 19.6% saying conditions are "good," up 1.1 percentage point from Jan.

February consumer confidence posts biggest drop since 2021in latest sign of slowing economy

Home Depot (HD), a Dow stock, on topped Wall Street's quarterly sales expectations, even as elevated interest rates & housing prices dampened consumer demand for large remodels & pricier projects.  For the full year ahead, the company expects total sales to grow by 2.8% & comparable sales, which take out the impact of 1-time factors like store openings & calendar differences, to increase by about 1%.  HD projected adjusted EPS will decline about 2% compared with the prior year.  CFO Richard McPhail said "housing is still frozen by mortgage rates."  Yet he added HD saw broad-based growth, as sales increased in about ½ of its merchandise categories & 15 of its 19 US geographic regions.  HD anticipates consumers will stop putting off projects as they gradually get used to higher interest rates, rather than waiting for them to fall.  "They tell us their lives are moving on," he said.  "Their families are growing. They're moving for a new job. They're upsizing their home. They want to upgrade their standard of living. Home improvement always persists, and so the question, I think, will be around the mindset of whether long-term rates have gotten to a new normal."  In the 3-month period that ended Feb 2, EPS was $3.02, up from $2.82 & revenue rose 14% from $34.8B in the year-ago period.  Comparable sales, a metric also known as same-store sales, increased 0.8% across the company.  Those results ended 8 consecutive qtrs of falling comparable sales.  They also exceeded expectations of a decline of 1.7%.  Comparable sales in the US increased 1.3% year over year.  Regions hit by hurricanes Helene & Milton contributed about 0.6% to comparable sales, McPhail added.  The stock soared 13.41 (2%).

Home Depot earnings beat estimates, as comparable sales losing streak ends

Eli Lilly (LLY) released higher doses of its weight loss drug Zepbound in single-dose vials at as much as ½ its usual monthly list price to reach more patients without insurance coverage for the blockbuster injection, such as those with Medicare.  It expands its effort to boost the US supply of Zepbound as demand soars, & to ensure eligible patients are safely accessing the real treatment instead of cheaper compounded versions.  LLY is now offering higher doses of Zepbound in single-dose vials through a “self-pay pharmacy” section on its direct-to-consumer website, LillyDirect, which began make more of the medication available in vials in Aug.  Eligible patients diagnosed by a health-care provider with obesity alone or along with obstructive sleep apnea, Zepbound's newly approved use, can pay for those vials themselves on the site.  The company is selling 7.5 milligram & 10 milligram vials of Zepbound for $499 per month when patients fill their first prescription, & any time they refill within 45 days of their previous delivery.  Otherwise, those 2 doses will cost $599 & $699, respectively.  Also, LLY is lowering the price of both of the lower-dose vials of Zepbound by $50.  The 2.5 milligram vial will now cost $349 & the 5 milligram vial will now be priced at $499.   Those vials will make more of the medication available because they are easier to manufacture than autoinjector pens, which cost roughly $1,000 per month before insurance.  “We are, in the absence of full coverage for people suffering from obesity like other chronic diseases, we are just trying to fill that room and provide a more affordable solution, particularly for the Medicare population because none of our affordability solutions can be applied to them,” said Patrik Jonsson, pres of LLY diabetes & obesity.  The stock soared 19.88 (2%).

Eli Lilly offering more cheaper vials of Zepbound weight loss drug

Stocks fell across the board as Pres Trump's revived tariff threats & potential toughening of China curbs weighed on market optimism & the chances of interest rate cuts.  The biggest move in markets, however, came from the cryptocurrency markets, where the price of bitcoin tumbled below $90K for the first time since Nov.

Markets tick higher as stocks attempt a rebound

Dow went up 140, advancers slightly ahead of decliners & NAZ slid back 152.  The MLP index was off 1 to the 322s & the REIT index added 2+ to the 411s.  Junk bond funds remained weak & Treasuries were purchased, lowering yields.  Oil remained pennies higher but still below 71 & gold advanced 11 to 2964 (more on both below).

Dow Jones Industrials

Investors & economists expect the central bank to respond "strongly and systematically" to changes in inflation & the labor market, according to research published today by the San Francisco Fed that underscores the current sensitivity of financial markets to US economic data.  The Fed's perceived responsiveness to economic data picked up notably in 2022, driven first by inflation data &, last year, by labor market data, based on the analysis of perceptions embedded in professional forecasts & in bond market moves published in the regional Fed bank's latest Economic Letter.  The findings are in line with the Fed's actual response to inflation, which rose in 2021 but did not trigger any interest rate hikes until 2022.  They also track with the Fed's reaction to labor market data, which weakened notably in the middle of last year & helped drive the Fed's decision to cut the policy rate by a full percentage point starting last Sep.  The Fed's target policy rate is currently 4.25%-4.50%.  Recent weaker economic readings, including a survey released on Fri showing business activity fell to a 17-month low this month, have helped firm up market bets on 2 qtr-percentage-point reductions to the policy rate this year.  Worries about stalling economic growth appear to be outweighing fears of a resurgence in inflation, also evident in recent surveys, at least as far as market bets on how the Fed will react with monetary policy.  Interest rate futures contracts are currently priced for the first Fed rate cut this year to come in Jun, with the 2nd to happen as early as Oct.

Fed expected to respond strongly to inflation, job market conditions, research shows

Tesla (TSLA) is recalling more than 376K of its Model 3 & Model Y electric vehicles in the US over a potential power steering issue.  The recalled Model 3s & Model Ys could face a loss of power steering assistance "when the vehicle reaches a stop and then accelerates again" if they experience an "overstress condition" in the printed circuit board for electronic power-assisted steering (EPAS), TSLA said in a report submitted last week to the National Highway Traffic Safety Administration (NHTSA).  All the potentially affected vehicles feature EPAS & used a software release prior to 2023.38.4, the report added.  They belong to the model year 2023.  "A loss of power steering assist can require greater steering effort, especially at low speeds, increasing the risk of a crash," NHTSA continued.  TSLA said it designed the vehicles in a way that steering "will not be affected" if they suffer the "overstress condition" while driving above 0 miles per hour.  "Tesla’s design avoids any unreasonable risk to safety by preventing a loss of EPAS while the vehicle is in motion," the automaker said.  "In addition, Tesla does not believe that loss of EPAS when the vehicle reaches 0 mph is an unreasonable risk to safety because manual steering remains available."  TSLA said it decided to recall the affected vehicles in all markets to "avoid confusion for our customers" after a "determination by regulator in a non-US market that loss of EPAS at 0 mph should be remedied through a recall."  The stock fell 7.27.

Tesla recalls over 376K vehicles over potential power steering issue

Microsoft (MSFT), a Dow stock, has canceled an unspecified number of data center leases amid the AI spending boom.  The development comes as investors are closely watching whether Big Tech hyperscalers will continue to spend heavily on AI infrastructure.  MSFT operates data centers equipped with thousands of servers housing advanced computing chips such as Nvidia’s (NVDA) to power its Azure cloud & AI applications.  A typical data center operated by a Big Tech "hyperscaler" firm like Microsoft uses over 100 megawatts of power.  A MSFT spokesperson said, "While we may strategically pace or adjust our infrastructure in some areas, we will continue to grow strongly in all regions."  The spokesperson added, "[O]ur plans to spend over $80B on infrastructure this FY remains on track as we continue to grow at a record pace to meet customer demand."  MSFT, the largest backer of OpenAI, has said it plans to spend $80 billion in capital expenditures in its fiscal year 2025, driven by its push in the artificial intelligence market.  MSFT stock fell 4.21.

Microsoft said to be canceling leases for AI data centers

Gold's price is higher, trading near $2947, supported by a weaker $ softer US yields in a reaction to the recent German federal election outcome.  Although the far-right party Alternative for Germany (AfD) has gained 20% of votes, the Christian Democratic Union of Germany (CDU) is comfortable in the lead with 208 seats against AfD's 152.  US yields dropped off & the CME Federal Reserve (Fed) Futures are now favoring a 25 basis points (bps) rate cut in Jun, where last week odds were rather for no rate cut in Jun.  Meanwhile, traders will watch the US GDP release for the 4th qtr of 2024 later this week.  Given the recent slowdown in US activity & economic data (for example, the softer Services Purchase Managers Index (PMI) reading on Fri, another drop in US yields could be triggered, with markets anticipating the Federal Reserve lowering its monetary policy rate to boost the economy & demand.

Gold positive after Germai election result rules out far right participation

Oil prices steadied as investors awaited clarity on talks to end the war in Ukraine & weighed up the prospect of a resumption in crude exports from northern Iraq.  Brent futures were down 6¢ at $74.37 barrel while US West Texas Intermediate (WTI) crude futures declined 14¢ to $70.26.  Both Brent & WTI dropped by more than $2 on Fri, registering weekly declines of 0.4% & 0.5% respectively.  All eyes remain on efforts to end Russia's war on Ukraine, which enters its 4th year today.  Officials said yesterday that EU leaders will meet for an extraordinary summit on Mar 6 to discuss additional support for Ukraine & European security guarantees.  Ukrainian president Volodymyr Zelenskiy said that he was willing to step down if it meant peace for his country.  Pres Trump has initiated talks with Russia without inviting Ukraine or the EU to the table.  A senior Russian diplomat said Russian & USteams plan to meet for further discussions this week.  Sanctions imposed by the US & EU on Russian oil exports have disrupted seaborne oil supply flows, but an end to the war in Ukraine would not necessarily increase Russian supplies to the market because the country is a member of the OPEC+ group that has curbed production.  However, oil prices could still drop because of a decrease in geopolitical risk.

Oil prices steady as traders await progress on push for Ukraine peace deal

Stocks staged a modest comeback to kick off the week as investors largely shrugged off the worst trading action of the year on Fri when fears over inflation & economic uncertainty dragged down the major indices.  Multiple factors fueled the decline last week including WalMart's (WMT), Walmart's (WMT) soft guidance as consumer spending fears came into focus, along with the potential economic impact of tariffs & MSFT'S reported decision (above)to cancel leases for data center capacity.  While there are merits to these concerns, these concerns may only be flesh wounds to the positive for these equities, laying out multiple catalysts in the week ahead.

Markets wobble as they try to comeback after Friday's selling

Dow rose 164, advancers & decliners were even & NAZ fell 85.  The MLP index dropped 5 to 318 & the REIT index gained 3+ to the 411s.  Junk bond funds slid lower & Treasuries had limited buying with yields slightly lower (more below).  Oil inched higher but stayed under 71 & gold went up 4 to 2958.

Dow Jones Industrials

Apple (AAPL) is committing $500B to the US economy in a historic initiative, marking "an extraordinary new chapter in the history of American innovation." AAPL's 11-figure commitment will roll out over the next 5 years.  It will involve building an advanced AI server manufacturing factory near Houston, as well as doubling the company's Advanced Manufacturing Fund from $5-10B.  The tech giant also plans to establish an Apple Manufacturing Academy in Detroit, as well as hire 20K new employees with focuses on research & development, silicon engineering, artificial intelligence & machine learning.  "This new pledge builds on AAPL's long history  of investing in American innovation and advanced high-skilled manufacturing, and will support a wide range of initiatives that focus on artificial intelligence, silicon engineering, and skills development for students and workers across the country," the company said.  AAPL also plans to expand teams & facilities in numerous states, including Michigan, Texas, California, Arizona, Nevada, Iowa, Oregon, North Carolina & Washington.  CEO Tim Cook said that his company is "bullish on the future of American innovation."  "We're proud to build on our long-standing U.S. investments with this $500 billion commitment to our country’s future," he added.  "From doubling our Advanced Manufacturing Fund, to building advanced technology in Texas, we’re thrilled to expand our support for American manufacturing."  "And we’ll keep working with people and companies across this country to help write an extraordinary new chapter in the history of American innovation."  The announcement comes 2 days after Pres Trump to the tech giant's plans, saying that the company planned to invest "hundreds of billions of dollars" in the US.  The stock rose 2.53.

Apple announces historic US investment in bet on American innovation

Starbucks (SBUX) CEO Brian Niccol announced that the company is laying off over 1000 corp employees as it works to simplify operations.  Specifically, it is eliminating 1100 current support partner roles & closing several hundred additional open & unfilled positions.  "We are simplifying our structure, removing layers and duplication and creating smaller, more nimble teams," Niccol said.  "Our intent is to operate more efficiently, increase accountability, reduce complexity and drive better integration. All with the goal of being more focused and able to drive greater impact on our priorities."  Niccol informed employees about the layoffs in Jan, stating that they were part of the "Back to Starbucks" strategy – a series of changes aimed at enhancing the in-store customer experience while improving efficiency.  Niccol, who became CEO in Sep with plans to return the company to its coffeehouse roots, is working to boost profitability & improve the work environment after the company faced years of growing pressure from unionization campaigns nationwide & consecutive disappointing fiscal qtrs as traffic declined.  Niccol said that the layoffs were "a necessary change to position Starbucks for future success."  The stock rose 2.01.

Starbucks to lay off over 1,000 corporate workers

Treasury yields ticked down as investors looked to a busy week ahead, with a flurry of economic data due including a key inflation reading & insights on housing.  The 10-year Treasury yield was more than 2 basis points lower at 4.394% & the 2-year Treasury yield fell 1 basis point at 4.183%.  1 basis point is equal to 0.01% & yields & prices move in opposite directions.  Investors are expecting a packed week of economic data starting today with the Chicago Fed National Activity Index for Jan & the Dallas Fed Manufacturing Index.  Earlier this month, Fed Chair Jerome Powell indicated that after a hotter-than-expected CPI report in Jan, the Fed doesn't “need to be in a hurry” to lower interest rates further.  Markets have interpreted the recent messaging as indications that the Fed will be on hold with rates, probably into the summer, after cutting its benchmark borrowing level by a full percentage point in the latter part of 2024.

Treasury yields inch higher as investors await a flurry of economic data

Stocks were mixed as tech stocks faltered, with investors weighing the prospects for AI ahead of this week's economic reports.  Stocks were attempting to rebound after Fri's steep declines capped a losing week, which was marked by data showing American consumers & businesses are getting concerned about Trump's tariff plans.

Markets nosedive as consumers start to sour on US economy

Dow plunged 748 (near session lows), decliners over advancers about 3-1 & NAZ dropped 438.  The MLP index fell 5 to the 322s & the REIT index slid 2+ to 409.  Junk bond funds were flattish & Treasuries had heavy buying which sharply reduced yields.  Oil fell 2+ to 70 & gold pulled back 8 to 2947 (more on both below).

Dow Jones Industrials

ConocoPhillips (COP) said it would sell its interests in the Ursa & Europa Fields to Shell (SHEL) for $735M, as part of the shale producer's plan to streamline its portfolio. The company has been looking to offload non-core assets to help lower debt after its $22.5B takeover of rival Marathon Oil.  Earlier this month, COP said it was divesting its non-core Lower 48 assets for $600 million.  "This (Shell) transaction reflects our ongoing commitment to further strengthen our portfolio by divesting non-core assets and shows significant progress toward our $2 billion disposition target," COP said.  The transaction is expected to close by the end of the 2nd qtr of 2025 after which Shell's working interest in Ursa would increase to 61.35% from 45.4%.  SHEL said the acquisition expands its ownership in an established long-producing asset that "generates robust free cash flow, while also providing more options for growth."  COP stock fell 4.11 & SHEL stock finished down 1.67.

ConocoPhillips to sell interests in Ursa and Europa Fields to Shell for $735 million

Facebook parent company Meta (META) recently announced that it approved bonuses of up to 200% for its exec.  In a filing with the SEC, META said that its Compensation, Nominating & Governance Committee (CNGC) approved an increase in the target bonus percentage for named execs other than CEO Mark Zuckerberg.  The change increases bonuses from 75% of the named exec officer's base salary to 200% of their salary, & would start taking effect with the company's 2025 annual performance period.  "In approving this increase, the CNGC considered that the target total cash compensation for the named executive officers (other than the CEO) was at or below the 15th percentile of the target total cash compensation of executives holding similar positions at the peer group of companies that the Company benchmarks against for executive compensation purposes," Meta said.  With the change, the total cash compensation for the non-CEO exec at META "falls at approximately the 50th percentile of the Peer Group Target Cash Compensation."  The stock sank 11.29.

Meta approves bonuses of up to 200% for company execs as it lays off workers

In a recent report, the Services PMI (Purchasing Managers' Index), a key indicator of economic health in the private sector, was recorded at 49.7. This figure, published monthly by Markit Economics, is significantly lower than the forecast of 53.0, indicating a potential slowdown in the economy.  The PMI index is based on surveys of over 400 execs in private sector service companies, including sectors such as transport & communication, financial intermediaries, business & personal services, computing & IT, hotels & restaurants.  An index level of 50 denotes no change since the previous month, while a level above 50 signals an improvement, & below 50 indicates a deterioration.  The recent 49.7 reading is not only lower than the forecast but also shows a slight dip compared to the previous month's figure of 52.9.  This could be a sign of a potential economic slowdown, as a reading below 50 indicates a contraction in the services sector, which could have ripple effects on the broader economy.  The PMI is a significant indicator, as it is one of the most closely watched business surveys in the world, often moving markets & influencing economic policy.  A reading that is stronger than forecast is generally supportive (bullish) for the$, while a weaker than forecast reading is generally negative (bearish) for the $.  The lower-than-expected PMI reading could potentially impact the $ negatively.

US Manufacturing PMI exceeds expectations, indicating sector expansion

Gold prices eased as investors booked profits from the previous session's record high, but were set for an 8th straight weekly gain, driven by strong safe-haven demand amid concerns over Pres Trump's tariff plans.  Spot gold shed 0.1% to $2939 an ounce.  Bullion has gained around 1.9% this week after rising to a record $2954 yesterday.  US gold futures settled 0.1% lower at $2953.  It's just a classical movement of new all-time highs & profit-taking, but the fundamentals for gold remain solid.  Prices have shattered 2 record highs this week to trade above $2950 an oz, as uncertainties surrounding global economic growth & political instability have underscored investor appetite for bullion, which has risen 11.5% so far in 2025.

Gold eases from record high on profit-taking, eyes eighth weekly gain

Oil fell after the breach of a key technical level accelerated losses driven by the possibility of increased flows from Iraq, weakening the prospects of supply constraints that have gripped the market recently.  West Texas Intermediate slid more than 2% to trade below $71 a barrel, with the drop deepening after prices dipped below their 100-day moving average of about $71.51.  The decline puts oil at risk of its 5th straight weekly loss, which would be the longest streak in more than a year.  Crude has been trapped in a roughly $5 range for the past 3 weeks because of an uncertain outlook for supply, including increasing expectations that OPEC+ will delay a planned production increase & a drone attack that threatened Kazakh pipeline flows.  At the same time, Pres Trump's rapid-fire tariff actions & other policy decisions have dimmed the outlook for demand & boosted US consumers' expectations for long-term inflation.  OPEC+ postponing its 120K barrel-a-day output hike, a move delegates are flagging as a possibility, would mark the 4th time the group delayed plans to revive production halted in 2022.  At present, the alliance aims to restore a total of 2.2M barrels a day in monthly increments, starting in Apr.

Oil Falls After Weak Technicals Accelerate Supply-Driven Losses

Stocks fell as all 3 major indices looked set to record losing weeks.  There are signs that the uncertainty is starting to weigh on consumers.  Sentiment took a hit this month as Americans anticipate tariff-induced price hikes.  Additional economic data hinted at fading optimism. US business activity growth came close to stalling in Feb, according to flash PMI survey data published today.  Business expectations for the year ahead slumped, weighed down by uncertainty related to federal gov policies.  Dow gave back a significant 418 last week.