Dow soared 360, advancers over decliners 5-2 & NAZ went up a modest 29. The MLP index rose 3+ to the 163s & the REIT index added 1+ to the 397s (near 12 month highs). Junk bond funds edged higher & Treasuries were slightly lower in price. Oil recovered 2+ to 60 after yesterday's selloff & gold added 5 to 1730.
MJ (Alerian MLP index tracking fund)
|
|
General Motors (GM) will suspend production of its mid-size pickup trucks due to an
ongoing global semiconductor chip shortage. It's the latest shutdown as
the automaker prioritizes production of its larger, more profitable
full-size pickups & SUVs. Downtime at the Missouri plant will
start Mon & run thru Apr 12. It
produces GMC Canyon & Chevrolet Colorado pickups. Van production at
the facility will not be impacted, according to GM. GM
also will pull ahead scheduled downtime for the plant by 2 weeks to
May 24 thru Jul 19 to “allow for more time to build product” during H2, the union said & GM spokesman confirmed the plans. In addition to the pickups, Barnas said GM
will extend downtime at a car plant in mid-Michigan by 2 weeks to
mid-Apr. GM has temporarily shuttered or cut production at several plants that produce cars or crossovers to prioritize production of its full-size pickups & SUVs. “GM
continues to leverage every available semiconductor to build and ship
our most popular and in-demand products, including full-size trucks and
SUVs for our customers,” he added. “We have not
taken downtime or reduced shifts at any of our full-size truck plants
due to the shortage.” GM plants in Kansas & Ingersoll, Ontario, that shuttered in early
Feb over the chip shortage are expected to remain closed until at
least mid-Apr. GM plants in Brazil & South Korea also have been
affected by the shortage. A plant in Mexico is expected to reopen Apr 5
after being shut down since Feb 8. GM's actions are the latest
as the auto industry attempts to deal with the global chip shortage
after suppliers directed chips away from the automotive industry during
rolling plant shutdowns last spring due to Covid. It has been estimated the chip shortage to cut $60B in revenue from the global automotive industry this year. The stock fell 60¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM forced to cut production of mid-size pickups due to chip shortage
Ever since the pandemic struck last year, St Louis Fed Pres James Bullard has been one of the most optimistic members of the central bank, predicting early & often that the economy could rebound strongly — well ahead of his colleagues. But that doesn't mean Bullard projects an early exit from the Fed's easy policy. Yesterday, Bullard said that his “dot” on the Fed's “dot plot” in Mar shows no rate hike thru the end of 2023. It will stay there until Bullard sees actual evidence of strong growth this year. “I am continuing to see us near zero through 2023,” Bullard added. “My main concern is that we not start to pull [any move to exit] forward before we see whether the data actually is consistent with the very strong forecast for 2021,” he continued. Bullard is forecasting “a pretty good” 2021, with US GDP accelerating to a 6.5% annual growth rate, inflation picking up to a 2.5% annual rate & the unemployment rate falling to 4.5%, from 6.2% in Feb. “I want to see those numbers before we contemplate any changes to monetary policy,” Bullard said. There are even “upside risks” to the forecast, Bullard said, meaning potentially an even better performance. The downside risks, mainly a resurgence of COVID-19, are waning, he added. The Fed has also said it will continue to purchase $80B of Treasuries & $40B of mortgage-backed securities until there has been “substantial further progress” in meeting the Fed's goals of maximum employment & stable 2% inflation. When asked if his forecast for 2021 would meet the standard needed to taper the purchases, Bullard said the Fed hasn't started the debate on when to taper & won't until later this year, & even then “only if we actually see all the good things happening that we’re now projecting to happen.” “We are still in a crisis. It could go the wrong way. So we really want to get the pandemic behind us before we start contemplating changes,” Bullard said. Markets are pricing in the first rate hike sometime in 2022 & investors are worried that inflation might get out of hand. He said he thinks inflation will rise above the Fed's 2% target in 2021 & 2022, but that rise is actually helpful, not harmful.
Fed’s Bullard won’t forecast any interest-rate hikes until he sees proof of strong economy
US orders for long-lasting manufactured goods fell in Feb for the first time since last spring in a month marked by severe weather, but the lapse in growth is likely temporary as the economy regains momentum after a winter lull. Orders for durable goods fell 1.1% in Feb, the gov said. These are products such as electronics, appliances, machines, cars & other transportation equipment meant to last at least 3 years. The forecast called for a 0.6% increase. The setback appeared to be temporary. A slew of other indicators show industrial production on the rise & gathering momentum. Manufacturers are making as many products now as they were before the pandemic, aided by a shift in spending toward goods & away from services such as leisure & travel. What could add an extra boost in the coming months is massive federal stimulus & an increasing number of Americans being vaccinated. That should allow the economy to mend faster & allow people to return to work. The decline in orders last month was broad based. Bookings in every major category fell except for commercial passenger planes. Auto makers reported the biggest drop in orders — a decline of 8.7%. Sales have been fairly strong throughout the pandemic, but a shortage of computer chips is making it harder for manufacturers to keep pace. Extreme weather also constrained production & kept buyers away from showrooms. Orders in the oft-volatile category of commercial aircraft, on the other hand, jumped 103%. Boeing (BA), a Dow stock, reported more new orders than cancellations last month for the first time since the start of the pandemic. If transportation is excluded, durable-goods orders slipped a smaller 0.9% in Feb. Regular ups & downs in transportation often exaggerate monthly changes in the level of demand. A key measure of business investment, meanwhile, also fell in Feb after 9 straight increases. These are known as core orders & exclude defense & transportation. Businesses are still investing, but cautiously so in light of the pandemic. They are preparing for the end of the pandemic & a potential explosion in new orders as the global economy heals. The one worry: Many key materials used in the production of goods, ranging from lumber to computer chips (see above), are in short supply. That's pushing up prices & preventing some delays in the manufacturing of autos or other goods.
Surging U.S. manufacturers take temporary step back in February as durable-goods orders post first drop in 10 months
Some are saying that end of qtr positioning is going on. The best performers this year are being sold while the weaker ones are rising. The latest macro economic data from Feb is weak, but investors are looking past that.
Dow Jones Industrials
No comments:
Post a Comment