Dow rose 39, advancers over decliners about 5-4 & NAZ gained 6. The MLP index was off 1+ to the 281s & the REIT index fell 3+ to the 353s. Junk bond funds were mixed & Treasuries remained weak, drifting lower. Oil was off chump change in the 49s & gold added 3 to 1314.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.931797627087742)
The Federal Reserve began its 2-day policy meeting & experts wonder whether damage inflicted by recent hurricanes across parts of the US could stave off an interest rate hike initially predicted for later this year. While the Fed is not expected to hike interest rates tomorrow, officials projected one more raise before the end of the year. However, concerns over $B worth of economic damage & a potential impact on GDP, have caused some to believe the central bank may alter that timetable. The Fed approved rate hikes in Mar & June of this year. On the other hand, some believe the hurricanes won't impact the Fed's decision making, but rather policy decisions – including an expected announcement tomorrow that the central bank will begin unwinding its massive $4.5T balance sheet – will continue to be based off of Fed Chair Janet Yellen's clearly communicated mandates & goals.
Top Reps on a key Senate panel have reached a tentative agreement on a tax plan that would add about $1.5T to the gov's $20T debt over 10 years, according to congressional leakers. Tennessee Sen. Bob Corker, a member of the chamber's dwindling band of deficit hawks, said that Reps have "potentially gotten to a very good place" on agreeing to how much the upcoming tax measure might cost, once the Senate's tax writers have blended together rate cuts, additional revenue raised thru curbing tax breaks, & the beneficial effects of what he called "pro-growth tax reform." Corker didn't offer a number, but officials familiar with the Senate Budget panel's internal discussions said the tax measure would amount to $1.5T. Corker said he's willing to be flexible with revenue estimates & said, "I'm all for pro-growth tax reform but over a decade it needs to pay for itself per valid models." The divide between the Senate GOP's deficit hawk & "supply side" wings has to be overcome before action on this fall's tax measure can commence in earnest. The work of the budget panel is critical since Reps need to agree on a budget plan in order to pass a follow-up tax bill that's a top priority of Pres Trump & a centerpiece of the party's fall agenda without fear of a filibuster by Dems. But both House & Senate Reps are divided & the budget debate is months behind schedule. A few hours ago, Sen. Ron Johnson, one of the budget panel's more ardent advocates of tax cuts, said a 10-year, $1.5T tax cut "ought to be a minimum." Many Reps in DC promise that cutting corp & individual rates & ridding the code of inefficient tax breaks, deductions along with preferences will boost the economy & cause a burst of new revenue.
The deficit in the broadest measure of US trade rose to the highest level in more than 8 years this spring, reflecting in part a drop in fines & penalties paid by foreign companies. The deficit in the current account increased to $123B, up 8.5% from an imbalance of $113.5B in Q1, the Commerce Dept reported. It was the biggest deficit since a gap of $150B in Q4-2008. The current account is the most complete measure of trade because it includes not only goods & services but investment flows & other payments between the US & the world. Pres Trump has promised to reduce America's trade deficit, contending it costs US factory jobs. One of the biggest contributing factors to the larger deficit in Q2 was a decline in receipts from foreigners after they had risen sharply in Q1. The gov attributed the $5.2B decrease in receipts of secondary income from foreigners to a decline in fines & penalties paid by foreign companies. That category had risen sharply in Q1. Exports of goods & services increased $2.2B in Q2. Exports are getting a lift from a pickup in global growth & a drop in the value of the US $ against other currencies. A weaker $ makes American products more competitive on foreign markets. Imports of goods & services were also up in Q2, rising $11.8B, reflecting rising domestic demand from stronger US growth. The rise in the current account deficit put the imbalance in Q2 at a level equivalent to 2.6% of the total economy, as measured by GDP, up from 2.4% in Q1. By comparison, the largest current account deficit in relation to GDP was in Q4-2005 when the deficit totaled 6.3% of GDP.
A business group urged China to carry out promises to open its economy & warned that inaction might fuel a backlash against free trade amid mounting US & European criticism. The EU Chamber of Commerce said that Beijing is backtracking in some areas, including by imposing new restrictions on food imports, express delivery & legal services. It proposed hundreds of possible changes to open the state-dominated economy wider or simplify rules in fields from cosmetics to medical devices. "The current lack of reciprocity in market access is becoming politically unsustainable," the European chamber president, Mats Harborn, said. "We are worried that if this is not quickly changed, there will be a backlash against economic globalization." The chamber's American counterpart & other groups have issued similar appeals. Beijing faces mounting complaints from DC & the EU about its trade surpluses & barriers to foreign acquisitions of Chinese assets while its own companies are buying foreign brands & technology. The US trade representative, Robert Lighthizer, complained that Chinese efforts to create industrial champions & induce foreign companies to hand over technology threaten the world trading system. President Xi Jinping, who took power in 2012 & other leaders have promised to give market forces a bigger role, treat foreign & Chinese companies equally & reduce the dominance of state industry. But reform advocates complain little has been done to carry out those pledges. A foreign ministry spokesman, Lu Kang, defended Beijing's trade record & said it has abided by its market-opening commitments under the World Trade Organization. "China stays committed to the opening up and reform and lets the market play a decisive role in the allocation of resources," Lu said. China is a key market for autos, aircraft, smartphones, cosmetics& other goods. But Beijing bars foreign companies from fields including finance, telecoms & utilities. In other words, companies are required to work thru local partners that might become competitors. The European chamber report noted the Organization for Economic Cooperation & Development ranks China 59th out of 62 countries in terms of openness to foreign direct investment. It appealed for changes in fields from aerospace to cosmetics, including opening more industry segments, easing limits on foreign ownership stakes in companies & simplifying regulation.
Stocks are churning while they wait to hear what Janet has to say tomorrow. Even though her comments are expected to be unexciting, drama has been added trying to guess about a possible rate hike in Dec. Trump's speech at the UN is finished with little visible reaction by the stock market. Today's rise for the Dow was its 6th straight record.& 8th straight advance. Tax talk has been helpful. However these streaks do not last forever.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Federal Reserve began its 2-day policy meeting & experts wonder whether damage inflicted by recent hurricanes across parts of the US could stave off an interest rate hike initially predicted for later this year. While the Fed is not expected to hike interest rates tomorrow, officials projected one more raise before the end of the year. However, concerns over $B worth of economic damage & a potential impact on GDP, have caused some to believe the central bank may alter that timetable. The Fed approved rate hikes in Mar & June of this year. On the other hand, some believe the hurricanes won't impact the Fed's decision making, but rather policy decisions – including an expected announcement tomorrow that the central bank will begin unwinding its massive $4.5T balance sheet – will continue to be based off of Fed Chair Janet Yellen's clearly communicated mandates & goals.
Hurricane costs give Fed fresh challenges
Top Reps on a key Senate panel have reached a tentative agreement on a tax plan that would add about $1.5T to the gov's $20T debt over 10 years, according to congressional leakers. Tennessee Sen. Bob Corker, a member of the chamber's dwindling band of deficit hawks, said that Reps have "potentially gotten to a very good place" on agreeing to how much the upcoming tax measure might cost, once the Senate's tax writers have blended together rate cuts, additional revenue raised thru curbing tax breaks, & the beneficial effects of what he called "pro-growth tax reform." Corker didn't offer a number, but officials familiar with the Senate Budget panel's internal discussions said the tax measure would amount to $1.5T. Corker said he's willing to be flexible with revenue estimates & said, "I'm all for pro-growth tax reform but over a decade it needs to pay for itself per valid models." The divide between the Senate GOP's deficit hawk & "supply side" wings has to be overcome before action on this fall's tax measure can commence in earnest. The work of the budget panel is critical since Reps need to agree on a budget plan in order to pass a follow-up tax bill that's a top priority of Pres Trump & a centerpiece of the party's fall agenda without fear of a filibuster by Dems. But both House & Senate Reps are divided & the budget debate is months behind schedule. A few hours ago, Sen. Ron Johnson, one of the budget panel's more ardent advocates of tax cuts, said a 10-year, $1.5T tax cut "ought to be a minimum." Many Reps in DC promise that cutting corp & individual rates & ridding the code of inefficient tax breaks, deductions along with preferences will boost the economy & cause a burst of new revenue.
GOP has potential agreement on tax reform cost
The deficit in the broadest measure of US trade rose to the highest level in more than 8 years this spring, reflecting in part a drop in fines & penalties paid by foreign companies. The deficit in the current account increased to $123B, up 8.5% from an imbalance of $113.5B in Q1, the Commerce Dept reported. It was the biggest deficit since a gap of $150B in Q4-2008. The current account is the most complete measure of trade because it includes not only goods & services but investment flows & other payments between the US & the world. Pres Trump has promised to reduce America's trade deficit, contending it costs US factory jobs. One of the biggest contributing factors to the larger deficit in Q2 was a decline in receipts from foreigners after they had risen sharply in Q1. The gov attributed the $5.2B decrease in receipts of secondary income from foreigners to a decline in fines & penalties paid by foreign companies. That category had risen sharply in Q1. Exports of goods & services increased $2.2B in Q2. Exports are getting a lift from a pickup in global growth & a drop in the value of the US $ against other currencies. A weaker $ makes American products more competitive on foreign markets. Imports of goods & services were also up in Q2, rising $11.8B, reflecting rising domestic demand from stronger US growth. The rise in the current account deficit put the imbalance in Q2 at a level equivalent to 2.6% of the total economy, as measured by GDP, up from 2.4% in Q1. By comparison, the largest current account deficit in relation to GDP was in Q4-2005 when the deficit totaled 6.3% of GDP.
US current account deficit hits $123.1 billion
A business group urged China to carry out promises to open its economy & warned that inaction might fuel a backlash against free trade amid mounting US & European criticism. The EU Chamber of Commerce said that Beijing is backtracking in some areas, including by imposing new restrictions on food imports, express delivery & legal services. It proposed hundreds of possible changes to open the state-dominated economy wider or simplify rules in fields from cosmetics to medical devices. "The current lack of reciprocity in market access is becoming politically unsustainable," the European chamber president, Mats Harborn, said. "We are worried that if this is not quickly changed, there will be a backlash against economic globalization." The chamber's American counterpart & other groups have issued similar appeals. Beijing faces mounting complaints from DC & the EU about its trade surpluses & barriers to foreign acquisitions of Chinese assets while its own companies are buying foreign brands & technology. The US trade representative, Robert Lighthizer, complained that Chinese efforts to create industrial champions & induce foreign companies to hand over technology threaten the world trading system. President Xi Jinping, who took power in 2012 & other leaders have promised to give market forces a bigger role, treat foreign & Chinese companies equally & reduce the dominance of state industry. But reform advocates complain little has been done to carry out those pledges. A foreign ministry spokesman, Lu Kang, defended Beijing's trade record & said it has abided by its market-opening commitments under the World Trade Organization. "China stays committed to the opening up and reform and lets the market play a decisive role in the allocation of resources," Lu said. China is a key market for autos, aircraft, smartphones, cosmetics& other goods. But Beijing bars foreign companies from fields including finance, telecoms & utilities. In other words, companies are required to work thru local partners that might become competitors. The European chamber report noted the Organization for Economic Cooperation & Development ranks China 59th out of 62 countries in terms of openness to foreign direct investment. It appealed for changes in fields from aerospace to cosmetics, including opening more industry segments, easing limits on foreign ownership stakes in companies & simplifying regulation.
EU Chamber warns China: Open economy faster or risk backlash
Stocks are churning while they wait to hear what Janet has to say tomorrow. Even though her comments are expected to be unexciting, drama has been added trying to guess about a possible rate hike in Dec. Trump's speech at the UN is finished with little visible reaction by the stock market. Today's rise for the Dow was its 6th straight record.& 8th straight advance. Tax talk has been helpful. However these streaks do not last forever.
Dow Jones Industrials
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