Market Insights 3/14/2019

U.S. equities finished mixed and very near the flat line in very choppy trading, as investors mulled a host of news and events, including another dose of disappointing Chinese economic data.

Treasury yields and crude oil prices were mixed, the U.S. dollar moved higher, and gold tumbled.

The Markets….

The Dow Jones Industrial Average inched 7 points higher to 25,710

The S&P 500 Index declined 2 points (0.1%) to 2,809

The Nasdaq Composite lost 13 points (0.2%) to 7,631

In moderately-heavy volume, 912 million shares were traded on the NYSE and 2.2 billion shares changed hands on the Nasdaq

WTI crude oil rose $0.35 to $58.61 per barrel and wholesale gasoline lost $0.01 to $1.85 per gallon

The Bloomberg gold spot price fell $12.95 to $1,296.17 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.3% higher at 96.81

Import prices rise, along with jobless claims, new home sales miss

The Import Price Index rose 0.6% m/m for February, above the Bloomberg projection of a 0.3% gain, following January’s upwardly-revised 0.1% gain from an initially-reported 0.5% decline. Compared to last year, prices were down by 1.3%, versus forecasts of a 1.5% decrease and compared to January’s upwardly-revised 1.6% drop.

Weekly initial jobless claims rose by 6,000 to 229,000, versus expectations calling for 225,000, with the prior week’s figure being unrevised at 223,000. The four-week moving average declined by 2,500 to 223,750, while continuing claims increased by 18,000 to 1,776,000, north of estimates of 1,763,000.

New home sales fell 6.9% month-over-month (m/m) in January to an annual rate of 607,000 units, versus forecasts calling for 622,000 units and the upwardly-revised 652,000 unit pace in December. The median home price was down 3.8% y/y to $317,200.

Treasuries were mixed, as the yield on the 2-year ticked 1 basis point (bp)lower to 2.45%, while the yield on the 10-year note rose 1 bp to 2.64%, and the 30-year bond rate was up 3 bps to 3.04%. The U.S. dollar trimmed a recent pullback, with the British pound seeing pressure after last night’s Brexit vote that took a “no deal” divorce from the European Union (EU) off the table.

In late day action, the nation’s Parliament voted in favor of a delay in Britain leaving the EU. Also, the markets continue to grapple with mixed economic data amid the backdrop of the Fed being patient with monetary policy.

The week’s economic calendar will come to a close tomorrow with the Federal Reserve’s industrial production and capacity utilization report, with production expected to increase 0.4% m/m during February and utilization to tick higher to 78.4%, and the Job Openings and Labor Turnover Survey (JOLTS) will also be released, anticipated to show 7.3 million jobs were available to be filled in January, matching the prior month’s reading, while the preliminary March University of Michigan Consumer Sentiment Index will round out the docket, forecasted to post a reading of 95.3, above the 93.8 registered in February.

Europe higher as Brexit continues to garner attention, Asia mixed

European equities finished higher, with the British pound paring yesterday’s gains following yesterday’s vote to not leave the European Union (EU) without a deal in place, setting the stage for another vote that occurred after the markets were closed.

The nation’s Parliament voted in favor of a delay in Britain leaving the EU, paving the way for Prime Minister Theresa May to head to Europe to request such a delay past the March 29 deadline, a deferment May had previously indicated would be short-term and no later than June. The euro was also lower and bond yields in the region were mixed.

Stocks in Asia finished mixed following the continued gains in the U.S. yesterday, though mainland Chinese markets saw some pressure following another dose of disappointing economic data. The markets also paid attention to the latest U.K. Brexit developments as the region voted yesterday to not leave the EU without a deal in place.

China reported a 17-year low in industrial production growth for the first two months of the year, while its retail sales rose in line with expectations and its fixed asset investment accelerated.

Stocks in mainland China fell, but those traded in Hong Kong saw modest gains, with the data likely being countered by the nation’s recent stimulus measures and the lingering optimism of a potential trade deal with the U.S.