The market showed early resolve, but it turned lower in part to Boeing (BA) turning lower on news of Transportation Secretary Elaine Chao appearance in front of the Senate committee. Her observations that it was “very questionable” why some Boeing 737 Max safety features were not required.

"It is very questionable that these were safety oriented additions, why they were not part of the required template of measures that should go into an airplane. “

She concluded saying the issue will be reviewed by an outside committee and the department's inspector general.

Selling is widespread with all sectors lower.  It’s interesting that the more defensive sectors are off the most, with Utilities down more than 1.0%. Healthcare is still reeling from the Department of Justice looking to dump Obamacare (which was written by healthcare insurance companies for their benefit), but there are no details on a potential replacement.

There is no doubt Obamacare didn’t live up to its promise.  Although parts are popular, the economic impact has been punitive for many middle-income earners and small businesses.  I suspect the Supreme Court will ultimately rule on Obamacare without the individual mandate.   If drug and health insurers aren’t authoring the next solution, it would be tough on their bottom lines.

This is the thickest part of the swamp and hardest to drain.

S&P 500 Index	-0.55%
Communication Services (XLC)	-0.49%
Consumer Discretionary (XLY)	-0.13%
Consumer Staples (XLP)	-0.63%
Energy (XLE)	-0.62%
Financials (XLF)	-0.25%
Health Care (XLV)	-0.95%
Industrials (XLI)	-0.08%
Materials (XLB)	-0.35%
Real Estate (XLRE)	-0.61%
Technology (XLK)	-0.74%
Utilities (XLU)	-1.06%

Semiconductors

The SOXX is under serious pressure after German chipmaker Infineon (IFNNY) lowered its 2019 growth forecast for the second time in as many months.  The company points to a slower rebound in demand and China’s weak auto market. 

There is also speculation that some investors are ringing the register to have cash for the onslaught of hot IPOs, including Lyft this Friday.

Inverted Yield Curve

There is obviously still concerns over falling yields and potential inverted yield curve, although the key relationship between the two and ten year bonds is not there, yet.   Moreover, we can’t conflate the rush of foreign capital into the safety of US bonds as a sign the US economy is in trouble.

US Trade

The US trade deficit came in better than anticipated after reaching the ten-year high in December.  This supports the speculation there was a rush to front-load imports from China before higher tariffs were imposed.

China trade (goods and services)

• Imports -2.9%
• Goods Imports $32.2 billion -12.3%
• Exports +0.9%

 

 

 

 

 

 

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