US Stock Market Overview – The Nasdaq Rallies, Lead by Apple, While Walgreens Weighs on the Dow

US stocks were mixed on Tuesday with the Nasdaq notching up a small 0.25% gains, the S&P 500 also finished in the black and the Dow Industrials bucked the trend. Sectors were mixed, led higher by real-estate and technology with energy the worst performing sector. This comes despite a surge in crude oil prices which notched up robust gains.  Durable goods orders were subdued and GM reported weak car sales. The Atlanta Fed up its forecast of Q1 GDP growth which helped the dollar remain buoyed.

Durable Goods Orders Slide

Business investment in the US is dipping according to the US Commerce Department. US orders for non-defense capital goods excluding aircraft slipped 0.1% pulled down by declining demand for machinery. The January figures were revised slighter higher to 0.9% from 0.8%. Expectations were for core capital goods orders to increase 2.6% year over year. Shipments of core capital goods were flat in February. Headline durable goods orders dropped 1.6% in February. The report by the Commerce Department was delayed because of the government shutdown. Orders for motor vehicles dipped 0.1% in February. Orders for non-defense aircraft plunged 31.1% after rising 9.2% percent in January.

GM Reports Sales Drop

The drop in vehicle sales reported by the commerce department was mimicked by a sales report released by General Motors on Tuesday. The company reported Q1 sales on Tuesday that fell 7% year over a year saying that buyers are spending more on expensive sport utility vehicles and pickup trucks. The company said that same store sale on transaction prices for pickups increased to $8,040 compared with the outgoing models in the same quarter of 2018, reflecting the continued interest among buyers.

GDP Forecasts Point to Stronger Growth in the US

Solid construction spending helped buoy the forecasts for Q1 growth in the US. The Atlanta Fed’s GDPNow model is now tracking 2.1% growth up from 1.7% previously.  The New York Fed’s Nowcast model is tracking 1.3% for Q1 and 1.6% for Q2.  Final Q4 growth was just revised down to 2.2% from 2.6% according to the US Commerce Department.

World Trade is Contracting

World trade slipped by 0.3% in the Q4 and is forecast to growth by 2.6% in 2019 according to the  World Trade Organization. It forecast in September that 2018 growth would be 3.9%, down from 4.6% in 2017. Goods trade volumes are expected to grow more strongly in developing economies this year, with 3.4% growth in exports compared with 2.1% in developed economies.

Energy Shares and Oil Diverge

There was a divergence in energy shares on Friday. The entire sectors were lower, from upstream to integrated and downstream. Even oil services stocks were under pressure. This came despite a breakout in crude oil prices which eclipsed the 200-day moving average and close at $62.75, the highest close since early November.