Stock market higher, other indexes not so much
The US stock market is at an all time high this month but other indexes are flashing red. Here are a few to consider.
-The Chicago Purchasing Management Index sank to 43.2 in October from 47.1 in the prior month. This is the lowest level since December 2015. Economists has expected a reading of 48.3, according to Econoday.
-Economic activity in the manufacturing sector contracted in November. “The November PMI® registered 48.1 percent, a decrease of 0.2 percentage point from the October reading of 48.3 percent. The New Orders Index registered 47.2 percent, a decrease of 1.9 percentage points from the October reading of 49.1 percent. The Production Index registered 49.1 percent, up 2.9 percentage points compared to the October reading of 46.2 percent. The Backlog of Orders Index registered 43 percent, down 1.1 percentage points compared to the October reading of 44.1 percent November was the fourth consecutive month of PMI® contraction, at a faster rate compared to the prior month.
4th quarter GDP at 1.8% The latest estimate for US GDP growth for Q4 1.8%, according to the median nowcast. That compares with a 2.1% gain in Q3, according to the Bureau of Economic Analysis. BEA is scheduled to release the initial Q4 data on Jan. 30.
The latest revised Q4 estimate continues to reflect a borderline sluggish expansion, although the current nowcast marks a modest improvement over the 1.5% estimate published on November 25.
Rail traffic down 23% in late November
US railroads carried 23% fewer carloads of goods in late November as slower manufacturing in the US hurt shipments.“Rail traffic continues to struggle because U.S. manufacturing is soft, trade disputes and the uncertainty they entail are ongoing, and economic growth abroad isn’t what it could be,” said Association of American Railroads Senior Vice President John T. Gray. “That said, we’re confident that rail volumes will begin to grow again as the manufacturing portion of the economy finds firmer footing.”
California ports export fewer goods
While October 2019 exports of California-made products were up handily over last year, a sharp drop in re-exported merchandise meant that the state’s overall export trade was lower than in October 2018, according to a Beacon Economics’ analysis of the latest U.S. trade statistics released today by the U.S. Census Bureau.
California businesses shipped a total of $15.48 billion in merchandise abroad in the latest numbers, a nominal 3.0% decline from the $15.96 billion exported in October 2018. However, shipments of manufactured goods rose 3.3% to $9.77 billion from the $9.46 billion, while exports of non-manufactured goods (chiefly the state’s agricultural products and raw materials) increased 5.0% to $2.31 billion up from $2.20 billion. Dragging down the state’s overall export trade number was a 20.7% collapse in re-exports, which fell to $3.41 billion from $4.30 billion.
The declining numbers were mirrored by a 3.5% drop in the number of loaded export containers from the Ports of Los Angeles, Long Beach, and Oakland. Export airfreight tonnage at Los Angeles International airport was down 9.6% from last October.
Chevron assets falter
CNBC reports Chevron’s $11 billion write-down could reduce total S&P earnings by $1.32, according to Howard Silverblatt of S&P Dow Jones Indices.The nation’s second-largest oil company on Tuesday announced the write-down as it seeks to revalue some of its assets as commodity prices continue to falter.
SF Fed: Owing to tariff increases, softening global growth, and a strong dollar, the manufacturing sector has been cooling. In September, shipments and new orders were down 1.3% and 3.5%, respectively, from a year ago. Although the manufacturing sector makes up a relatively small share of GDP, its connectedness to other sectors poses some risk that its weakness could spread.
Not enough farmworkers?
146,000: That is the decline in the number of field and crop workers in America. Most farmers are urging Congress to support the Farm Workforce Modernization Act on the House floor in next few weeks.
Consumer confidence has been falling for the past three months
Steel maker hurting
Motley fool reports Since President Trump’s steel tariffs took effect in March 2018, U.S. Steel has lost around 70% of its value, as well as announcing hundreds of layoffs and multiple disruptions for plants across America. The company’s poor performance and outlook have resulted in negative average analyst-estimated earnings per share in 2020.
U.S. Steel is plummeting despite the Trump administration’s promise to revitalize the struggling coal and steel industries. The 25% tariffs on imported steel were meant to insulate the domestic steel market from competitors to prevent layoffs and return to a growth mindset. The opposite took shape. So far, the tariffs have dissuaded the market from investing in steel companies, leading many to believe that the industry can’t survive without protection from tariffs. Also hurting the industry are declining flat-rolled and tubular steel prices, U.S. Steel’s two core product segments.
Travel to US slows
International inbound travel to the United States continued to decline in September, marking the fifth consecutive month this year, according to the U.S. Travel Association’s latest Travel Trends Index (TTI). Inbound travel volume dipped by 0.4 percent for the month, year-over-year, and is expected to decrease by another 0.6 percent over the next six months compared to the same period last year. Prolonged trade tensions and the high value of the dollar continue to dampen demand for travel to the United States.
Jobless Claims Jump
The number of Americans filing applications for unemployment benefits jumped to more than a two-year high last week.Initial claims for state unemployment benefits surged to 252,000 for the week ended Dec. 7, the highest reading since September 2017, the Labor Department reported.