Friday, November 10, 2017

Markets slip on tax delay concerns

Dow lost 39, decliners over advancers 5-4 & NAZ went up pocket change.  The MLP index slid lower in the 268s & the REIT index rose a fraction in the 362s.  Junk bond funds drifted lower (again) & Treasuries were weak.  Oil fell to the 56s & gold sank 11 to 1266.

AMJ (Alerian MLP Index tracking fund)

Live 24 hours gold chart [Kitco Inc.]

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The benchmark S&P 500 & the blue-chip Dow indices were lower as investors continued to grapple with concerns over a delay in corp tax cuts, while the Nasdaq pared losses, helped by gains in Nvidia (NVDA) & media stocks.  Senate Reps on Thurs unveiled a plan that would delay, by a year, lowering the corporate tax rate to 20% & provide small-business owners with a deduction rather than a special business rate.  The Senate Rep version of the bill differs markedly on corp, business & individual tax cuts from legislation detailed by their counterparts in the House of Representatives.  Expectations of lower taxes, one of Pres Trump's key promises, have helped powered the S&P more than 20% since the 2016 presidential election.  2 major indices ended lower for the week & NAZ inched higher, with the S&P & the Dow ending lower for the first time in 9 weeks.  6 of the 11 major S&P sectors were lower, with the energy index's 1.2% fall leading the decliners as oil prices fell.w

Dow, S&P slip on tax bill worries; Nvidia boosts Nasdaq

Donald Trump warned that the stock market was a "big, fat, ugly bubble" just weeks before he was elected.  A year later,the stock market remains on a milestone-shattering run that the pres has been eager to tout &   tweet about.  The S&P 500, the broadest measure of the stock market, has notched 61 record highs & climbed 21.3% in the year since Trump was elected.  That exceeds the S&P 500's gain in the first-term election anniversaries of all but 2 presidents since World War II:  George H.W. Bush (22.9%) & John F. Kennedy (27%).  It also outpaces the market's performance in the same postelection period of several other modern-era White House occupants, including Ronald Reagan (-3.3%), Bill Clinton (10.3%),   George W. Bush (-22.1%) & Barack Obama (4.1%).  But it trails the S&P 500's gain in the first year after the 2nd-term elections of Clinton (31.7%) & Obama (23.4%).

How 1-year Trump rally stacks up against other presidents

Baker Hughes reported that the number of oil & gas rigs in the US rose this week, bucking the downward trend of recent weeks.  The number of oil rigs climbed by 9, while the number of gas rigs stayed the same.  WTI & Brent have both continued a steady upward climb as the market grows bolder in believing that OPEC can rebalance the market, & after a series of surprise arrests in Saudi Arabia provided a bit of instability concerning oil supplies in the region.  The total oil & gas rig count in the US stands at 907 rigs, up 339 rigs from the year prior, with the number of oil rigs standing at 738 versus 452 a year ago.  The number of gas rigs stands at 169, up from 115 a year ago.  Canada, too, saw an increase to oil & gas rigs, with oil rigs climbing by 8 & gas rigs climbing by 4.  The spot price for WTI & Brent have been on a run, with WTI trading up 0.05% at $57.20, more than $2 up from last week. Brent crude was trading up 0.14% at $64.02, almost $3 over last week's price.  Along with an increase to the number of active oil rigs, US crude oil production was up for the week at  9.62M barrels per day, another new high for 2017 after reaching a high the week prior.

Oil Pulls Back After U.S. Rig Count Sees Significant Increase

Growing concerns about the future of legislation for lower taxes weighed heavily on the stock market today.  Until this is settled, one way or the other, selling pressure on stocks will continue.  At least the bulls can be happy that the averages are very near record levels.  The chart below shows an outstanding chart for the Dow over the last year.  But now it will need help from Congress to extend this run.

Dow Jones Industrials


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