March 1, 2018
Stocks fell sharply at mid-session after President Trump, seeking to support the nation's metals producers, said he would impose 25 percent tariffs on imported steel and 10 percent tariffs on aluminum. The Dow has had a very bad week, falling more than 1 percent beginning on Tuesday and 1.7 percent today to 24,608.
Jerome Powell finished up his Capitol Hill appearance and helped the stock market early in the session, playing the other side of Tuesday's testimony when he stressed economic strength and today assuring lawmakers that neither the economy nor wages are overheating.
Economic data were heavy led by a sizable 0.3 percent monthly increase in core PCE prices though the year-on-year rate, in an offset, held lifeless at 1.5 percent. Taxes for consumers fell sharply in January as part of the new tax cut package which helped to make for a solid 0.5 percent monthly gain in wages & salaries. Despite the income gain, however, consumer spending proved very soft in January, up only 0.2 percent, with the first indication on February consumer spending, today's unit vehicle sales, also soft, no better than flat which points to a fourth straight disappointing month for the motor vehicle component of the retail sales report.
Money once again moved back into the bond market as the 10-year Treasury yield fell 5 basis points to 2.81 percent. The dollar has been stable this week though the dollar index did dip 0.4 percent in today's session to 90.25. Oil edged lower to just under $61.50 while gold held steady near $1,320.