MARKET RECAP - FINANCIALS, METALS & ENERGY

U.S. Dec personal spending fell -0.5%, weaker than expectations of -0.3% and the biggest decline in 9-1/4 years.  Jan personal income unexpectedly fell -0.1%, weaker than expectations of +0.3% and the first decline in 3 years.

The U.S. Feb ISM manufacturing index fell -2.4 to 54.2, weaker than expectations of -0.8 to 55.8 and the slowest pace of expansion in 2-1/4 years.  The Feb ISM prices paid unexpectedly fell -0.2 to 49.4, weaker than expectations of +2.2 to 51.8 and the steepest pace of contraction in 3 years. 

The University of Michigan U.S. Feb consumer sentiment unexpectedly fell -1.7 to 93.8, weaker than expectations of +0.4 to 95.9.

Market closes

Stock Market --The S&P 500 on Friday closed higher: S&P 500 +0.69%, Dow Jones +0.43%, Nasdaq 100 +0.77%.  Bullish factors included (1) carry-over support from a sharp rally in Chinese stocks after the China Feb Caixin manufacturing PMI rose +1.6 to 49.8, stronger than expectations of +0.2 to 48.5, and (2) optimism that China and the U.S. were close to signing a new trade accord after a report said U.S. officials are preparing a final trade deal that U.S. President Trump and Chinese President Xi Jinping could sign in weeks.  A bearish factor was the -2.4 point fall in the U.S. Feb ISM manufacturing index to 54.2, weaker than expectations of -0.8 to 55.8 and the slowest pace of expansion in 2-1/4 years. 

Interest Rates — Jun 10-year T-notes on Friday tumbled to a 1-month low and closed lower: TYH9 -11.50, FVH9 -7.75.  Bearish factors included (1) the rally in global stock markets on optimism the U.S. and China were close to a trade deal, which curbed safe-haven demand for T-notes, and (2) increased inflation expectations after the 10-year T-note breakeven inflation rate rose to a 2-3/4 month high.

Forex --The dollar index on Friday closed higher: Dollar Index +0.370 (+0.38%), EUR/USD -0.0006 (-0.05%), USD/JPY +0.50 (+0.45%).  Bullish factors included (1) strength in USD/JPY which climbed to a 2-1/4 month high as the rally in global stocks reduced the safe-haven demand for the yen, and (2) the jump in the 10-year T-note yield to a 1-month high, which improves the dollar's interest rate differentials. 

Metals — Metals on Friday closed lower with Apr gold at a 1-month low and May silver at a 5-week low:  Apr gold closed down -16.9 (-1.28%) and March silver closed down -0.378 (-2.42%).  Bearish factors included (1) a stronger dollar, and (2) U.S industrial metal demand concerns after the Feb ISM Feb ISM manufacturing index fell -2.4 to a 2-1/4 year low of 54.2.

Energy — Apr crude oil and gasoline on Friday closed lower: Apr crude oil -1.42 (-2.48%) and Apr gasoline -2.20 (-1.26%).  Bearish factors included (1) a stronger dollar, and (2) signs of U.S. economic weakness that are negative for fuel demand after Dec personal spending fell -0.5%, the biggest decline in 9-1/4 years, and after the Feb ISM manufacturing index fell -2.4 to 54.2, the slowest pace of expansion in 2-1/4 years.  A bullish factor was reduced OPEC output after OPEC Feb crude production fell -560,000 bpd to a 3-year low pf 30.5 million bpd.