Dow gained 84, advancers over decliners 5-4 & NAZ went up 15. The MLP index fractionally higher in the 284s & the REIT index about even in the 349s. Junk bond funds & Treasuries were flattish. Oil was pennies lower & gold prices fluctuated around 1274 (a 7 week low).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.7530579975854983)
Rep leaders are considering putting limits on the $1.3T state & local tax deduction, instead of eliminating it, in order to secure votes from members in the hardest-hit states. House Ways & Means Chairman Kevin Brady discussed options at last night with several GOP members who have defended the break, known as the SALT deduction. They talked about measures including capping the deduction for top earners & allowing individuals to choose between deducting mortgage interest or property taxes, but not both, when calculating their taxes. “We want to make sure that we’re not addressing the concerns of an individual making $5 million a year living in a $40 million dollar home or condo,” said Rep Chris Collins of NY. “And that’s where the capping could come in,” said Collins, an ally of Pres Trump. “You can phase things out as incomes go up which addresses the attack that this would be a tax cut for the wealthy.” The purpose of the meeting with Brady was to find “a way to get the California, New York & New Jersey Reps on board for tax reform,” according to Collins. “They’re going to need our votes,” said Rep King of NY said. Rep lawmakers have indicated resistance to a bill that would end the state & local tax deduction. The tax framework released by the White House & Rep leaders last week lacks extensive details about ways to offset its rate cuts with additional revenue. It proposes that most itemized deductions for individuals should be eliminated, but would protect breaks for mortgage interest & charitable giving. Ending the state & local tax break is estimated to generate $1.3T in revenue over 10 years, which would help offset proposed tax-rate cuts. Changing the state & local break instead of ending it would reduce that amount. Collins said Brady was “very open” to his concerns, & he “came away with a very good, optimistic feeling there’ll be an accommodation made for the SALT deduction.” “Chairman Brady hosts regular dinners with members of the House Republican conference to talk about important tax reform policy issues,” Emily Schillinger, a Brady spokeswoman. “He hosted one last night and members did discuss the state and local tax deduction.” Rep Jeff Denham of California said his state's high taxes would put his constituents at a disadvantage if the state & local break is eliminated. "I don’t want to penalize Californians," said Denham, who represents a swing district in San Joaquin Valley. "The question is: Should people in my district and throughout California be able to have just as big of a tax cut as the rest of the country?" Senator Bob Corker says a tax bill mustn't add to the deficit & said yesterday he thinks the White House is showing "softness" on the state & local break, arguing that it’s "the easiest one" politically for Reps to eliminate. High-tax states tend to lean Dem, & GOP leaders are not counting on their support for a tax overhaul. White House economic adviser Gary Cohn said that scrapping state & local deduction was “not a red line” for Trump.
GOP Leaders Consider Changing State Tax Deduction Instead of Ending It
With stores closing & retailers filing for bankruptcy, a trade group says it still expects holiday sales to at least match the 3.6% growth of a year ago, as online shopping keeps increasing & improving wages may put people in a mood to spend. The National Retail Federation said it expects sales in Nov & Dec to rise 3.6-4%, to $679B-682B. It's the first time the group forecast in a range rather than by a fixed percentage, because the impact of several big hurricanes is still uncertain. Retailers fighting the dominance of the internet are trying to reinvent themselves & are being forced to close if they don't do it fast enough. Dozens of retail chains have filed for bankruptcy this year & hundreds of stores have closed, particularly among those dependent on clothing sales. But online spending is still growing strongly, which accounts for some of the optimism & stores that are doing well include off-price chains, dollar stores & discounters. "Retail is not dead," said theNRF. "It's transforming." Holiday forecasts from Deloitte, the Intl Council of Shopping Centers & AlixPartners have come in around the same level, ranging from growth of 3.5-4.5%. PwC predicts that holiday spending will rise 6%, but that includes travel & entertainment. Other forecasts exclude restaurants & travel. The NRF forecast — which considers economic indicators such as consumer credit, disposable personal income & monthly retail sales — excludes sales from autos, gas & restaurants but includes online spending & other non-store sales like those from catalogs. It estimates that online spending & other non-store sales will rise 11-15%. There's also one more day in the season this year since Christmas is on Mon. While job growth in Aug hit a lull, the US economy has been adding jobs. The economy is now in its 9th year of growth & unemployment is near a 16-year low. Still, retail experts point to a widening spending gap as wealthier shoppers benefit from a strong stock market & lower-income shoppers are more affected by rising costs in rent & health care. PwC''s survey shows that shoppers with incomes less than $60K planned to spend just 0.3% more this holiday season, while those with household income above that plan to step up their spending by 5%. In the $100K-149K income range, people plan to spend 15% more, & at more than $150K people said they'll spend 8% more.
The Federal Reserve's own actions, not transitory factors, are responsible for weak inflation, a Fed policymaker argued & the central bank should wait to raise rates again until inflation hits its 2% goal. "The Fed's policy to remove monetary accommodation over the past few years is likely an important factor driving inflation expectations lower," Minneapolis Fed Pres Neel Kashkari wrote on the bank's website, referring to the FOMC, which sets interest rates. "My preference would be not to raise rates again until we actually hit two percent core PCE inflation on a 12-month basis, unless we have seen a large drop in the headline unemployment rate signaling that we have used up remaining labor market slack, or a surprise increase in inflation expectations." His comments stake out a dovish view of policy at odds with that of the Fed's core, who expect inflation to strengthen as the labor market market tightens. Most Fed policymakers, including Fed Chair Janet Yellen, expect they will need to raise rates in Dec, & 3 more times next year, to keep the economy from overheating. Kashkari, who dissented twice this year against Fed rate hikes, arguing that the Fed's decision to end bond-buying in 2014, its hawkish guidance on rate hikes since then, & the 4 rate hikes it has actually completed have pushed inflation expectations down & kept job & wage growth slower than they would have been otherwise. Allowing inflation expectations to slip gives the Fed less leeway to fight future downturns with rate cuts, he added. "There is no reason to raise rates until we start to see wages and inflation climb back to target," Kashkari wrote. "The only explanation that would potentially call for further policy tightening is the transitory factor explanation. But the longer low inflation persists (here and around the world), the more tenuous that story becomes." The Fed should therefore "proceed with caution" on raising rates further, he continued.
Fed's rate hikes causing low inflation, Kashkari says
The stock market is not doing much of anything while waiting for more Sep data & then the start of earnings season. However there is a bias on the buy side with the Dow closing at its daily high, setting another record. Tax reform is in the air & gold has been heading lower for almost 2 months. The bulls are firmly in command of the stock market & want to take it higher.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Rep leaders are considering putting limits on the $1.3T state & local tax deduction, instead of eliminating it, in order to secure votes from members in the hardest-hit states. House Ways & Means Chairman Kevin Brady discussed options at last night with several GOP members who have defended the break, known as the SALT deduction. They talked about measures including capping the deduction for top earners & allowing individuals to choose between deducting mortgage interest or property taxes, but not both, when calculating their taxes. “We want to make sure that we’re not addressing the concerns of an individual making $5 million a year living in a $40 million dollar home or condo,” said Rep Chris Collins of NY. “And that’s where the capping could come in,” said Collins, an ally of Pres Trump. “You can phase things out as incomes go up which addresses the attack that this would be a tax cut for the wealthy.” The purpose of the meeting with Brady was to find “a way to get the California, New York & New Jersey Reps on board for tax reform,” according to Collins. “They’re going to need our votes,” said Rep King of NY said. Rep lawmakers have indicated resistance to a bill that would end the state & local tax deduction. The tax framework released by the White House & Rep leaders last week lacks extensive details about ways to offset its rate cuts with additional revenue. It proposes that most itemized deductions for individuals should be eliminated, but would protect breaks for mortgage interest & charitable giving. Ending the state & local tax break is estimated to generate $1.3T in revenue over 10 years, which would help offset proposed tax-rate cuts. Changing the state & local break instead of ending it would reduce that amount. Collins said Brady was “very open” to his concerns, & he “came away with a very good, optimistic feeling there’ll be an accommodation made for the SALT deduction.” “Chairman Brady hosts regular dinners with members of the House Republican conference to talk about important tax reform policy issues,” Emily Schillinger, a Brady spokeswoman. “He hosted one last night and members did discuss the state and local tax deduction.” Rep Jeff Denham of California said his state's high taxes would put his constituents at a disadvantage if the state & local break is eliminated. "I don’t want to penalize Californians," said Denham, who represents a swing district in San Joaquin Valley. "The question is: Should people in my district and throughout California be able to have just as big of a tax cut as the rest of the country?" Senator Bob Corker says a tax bill mustn't add to the deficit & said yesterday he thinks the White House is showing "softness" on the state & local break, arguing that it’s "the easiest one" politically for Reps to eliminate. High-tax states tend to lean Dem, & GOP leaders are not counting on their support for a tax overhaul. White House economic adviser Gary Cohn said that scrapping state & local deduction was “not a red line” for Trump.
GOP Leaders Consider Changing State Tax Deduction Instead of Ending It
With stores closing & retailers filing for bankruptcy, a trade group says it still expects holiday sales to at least match the 3.6% growth of a year ago, as online shopping keeps increasing & improving wages may put people in a mood to spend. The National Retail Federation said it expects sales in Nov & Dec to rise 3.6-4%, to $679B-682B. It's the first time the group forecast in a range rather than by a fixed percentage, because the impact of several big hurricanes is still uncertain. Retailers fighting the dominance of the internet are trying to reinvent themselves & are being forced to close if they don't do it fast enough. Dozens of retail chains have filed for bankruptcy this year & hundreds of stores have closed, particularly among those dependent on clothing sales. But online spending is still growing strongly, which accounts for some of the optimism & stores that are doing well include off-price chains, dollar stores & discounters. "Retail is not dead," said theNRF. "It's transforming." Holiday forecasts from Deloitte, the Intl Council of Shopping Centers & AlixPartners have come in around the same level, ranging from growth of 3.5-4.5%. PwC predicts that holiday spending will rise 6%, but that includes travel & entertainment. Other forecasts exclude restaurants & travel. The NRF forecast — which considers economic indicators such as consumer credit, disposable personal income & monthly retail sales — excludes sales from autos, gas & restaurants but includes online spending & other non-store sales like those from catalogs. It estimates that online spending & other non-store sales will rise 11-15%. There's also one more day in the season this year since Christmas is on Mon. While job growth in Aug hit a lull, the US economy has been adding jobs. The economy is now in its 9th year of growth & unemployment is near a 16-year low. Still, retail experts point to a widening spending gap as wealthier shoppers benefit from a strong stock market & lower-income shoppers are more affected by rising costs in rent & health care. PwC''s survey shows that shoppers with incomes less than $60K planned to spend just 0.3% more this holiday season, while those with household income above that plan to step up their spending by 5%. In the $100K-149K income range, people plan to spend 15% more, & at more than $150K people said they'll spend 8% more.
Retail group expects holiday sales to rise 3.6 to 4 percent
The Federal Reserve's own actions, not transitory factors, are responsible for weak inflation, a Fed policymaker argued & the central bank should wait to raise rates again until inflation hits its 2% goal. "The Fed's policy to remove monetary accommodation over the past few years is likely an important factor driving inflation expectations lower," Minneapolis Fed Pres Neel Kashkari wrote on the bank's website, referring to the FOMC, which sets interest rates. "My preference would be not to raise rates again until we actually hit two percent core PCE inflation on a 12-month basis, unless we have seen a large drop in the headline unemployment rate signaling that we have used up remaining labor market slack, or a surprise increase in inflation expectations." His comments stake out a dovish view of policy at odds with that of the Fed's core, who expect inflation to strengthen as the labor market market tightens. Most Fed policymakers, including Fed Chair Janet Yellen, expect they will need to raise rates in Dec, & 3 more times next year, to keep the economy from overheating. Kashkari, who dissented twice this year against Fed rate hikes, arguing that the Fed's decision to end bond-buying in 2014, its hawkish guidance on rate hikes since then, & the 4 rate hikes it has actually completed have pushed inflation expectations down & kept job & wage growth slower than they would have been otherwise. Allowing inflation expectations to slip gives the Fed less leeway to fight future downturns with rate cuts, he added. "There is no reason to raise rates until we start to see wages and inflation climb back to target," Kashkari wrote. "The only explanation that would potentially call for further policy tightening is the transitory factor explanation. But the longer low inflation persists (here and around the world), the more tenuous that story becomes." The Fed should therefore "proceed with caution" on raising rates further, he continued.
Fed's rate hikes causing low inflation, Kashkari says
The stock market is not doing much of anything while waiting for more Sep data & then the start of earnings season. However there is a bias on the buy side with the Dow closing at its daily high, setting another record. Tax reform is in the air & gold has been heading lower for almost 2 months. The bulls are firmly in command of the stock market & want to take it higher.
Dow Jones Industrials
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