Trade war?  What trade war? The bulls are running again today, and it’s as if there was not even a mention of a potential war brewing with China.  While the Trade Balance report for February continued to widen, the trade deficit with China has narrowed from $35.9 billion in January to $29.3 billion in February.      

Overall, the deficit was $57.6 billion compared to $56.7 billion in January, strengthening President Trumps call for tariffs on imports.  This is the largest deficit since October 2008.  Exports (+$3.5 billion) and imports (+$4.4 billion) both increased indicating global growth continues to expand.  It’s just that imports increased at a faster pace than exports. 

Exports:

• Goods $137.2 billion
• Service $67.3 billion

Imports             

• Goods $214.2 billion
• Service $47.8 billion 

Industrial supplies and materials led exports, increasing $2.0 billion:

•          Nonmonetary gold increased $0.6 billion
•          Crude oil increased $0.3 billion
•          Natural gas increased $0.3 billion

Imports were paced by capital goods, which increased $1.8 billion:

•          Civilian aircraft increased $0.5 billion
•          Materials-handling equipment increased $0.3 billion
•          Computers increased $0.3 billion

As we approach the jobs number tomorrow, initial unemployment claims for the week ending March 31, edged up 24,000 to 242,000 exceeding the estimate of 225,000 and up from the prior week’s revised 218.000.  A better gauge, the 4-week moving average was 228,250 up from 228,250.   Despite the increase, the number of Americans on unemployment fell to the lowest level since 1973 as labor market conditions tighten.

At midday, the Equity indexes are following through on yesterday’s gains.  The Dow Jones Industrial Average is currently up 285 points, 1.17%, at 24,550.  If we hold onto the gains, it will be three days in a row that the Dow closed higher.  As previously mentioned, the Dow is forming a large descending triangle pattern.  The descending trend-line comes in at the all-important 24,700.  We will be paying close attention as we approach that area. 

The advancers are firmly in control of decliners 2037/794 on the NYSE and 1535/1017 on the Nasdaq.  There are 42 new highs on the NYSE and 47 on the Nasdaq compared to 13 new lows on the NYSE and 20 on the Nasdaq. 

While the markets look good, the Dow is 100 points off the high.