Dow dropped 7, advancers over decliners 5-4 & NAZ lost 23. The MLP index went up 1+ to the 275s & the REIT index gained 1+ to the 353s. Junk bond funds were higher & Treasuries rose in price. Oil jumped up a big 1+ to the high 39s (not seen in more than 2 years) & gold added 9 to 1287 (maybe headed for 1300).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.12077895125454308)
Americans displayed their buying bona fides in the final run-up to Christmas, turning out in force to produce what may be the best holiday shopping season in years. And why not? A nation that loves to spend has plenty to feel good about, with low unemployment & a robust stock market. The season's tally should reach $671B, a “stellar” 5.5% increase from last year, according to Craig Johnson, head of research firm Customer Growth Partners. That would be the most since 2005, according to his calculations. The timing of Christmas didn't hurt, either, with a full weekend for procrastinators to redeem themselves. But signs of success were present all along, including a yen for home goods & electronics. Johnson boosted his holiday forecast earlier this month & he notes that retailers didn't have to resort to last-minute markdowns to draw shoppers. They were already coming in via the digital or brick-&-mortar doors. Sales thru Christmas Eve were about $598B, Johnson said & he expects another $73B to come this week.
This Holiday Shopping Season May Be the Best in More Than a Decade
China can achieve a goal of doubling the size of its economy by 2020 even if annual expansion slows to 6.3%, according to a senior Communist Party official, signaling a greater willingness to tackle debt & pollution at the expense of growth. In its blueprint for 2016 to 2020, China set a minimum annual growth target of 6.5% for the 5-year period to achieve the goal of doubling GDP from 2010 levels. But,an official from the Communist Party committee overseeing economic policy, said annualized growth of 6.3% in 2018-2020 would do. Based on current economic performance, the 2020 target won’t be a "huge barrier," the official said. China is seen growing 6.8% this year & 6.5% in 2018, according estimates. Pres Xi Jinping & other top leaders have likewise signaled less emphasis on growth, pledging earlier this month to focus on "critical battles" against financial risk, pollution & poverty in the next 3 years. The notion that China would abandon a growth target before 2020 was dismissed. GDP will reach 80T yuan ($12.2T) by year end, the State Council research office said. The economy only needs to grow by 6.3% a year & residential income by 5.3% to reach the targets of doubling 2020 GDP & per capita income from 2010 levels.
Craft breweries are raising a glass to the Reps' new tax overhaul: It cuts the excise tax on beer. Retailers, long saddled with heavy tax bills, will get relief. So will some high-profile names in corp finance. The tax measure that Pres Trump signed into law Fri distributes benefits across a range of American industries, from construction to health care. "As a general rule of thumb, everybody's doing well under this bill," Martin Sullivan, chief economist at Tax Analysts, says of US companies. "When you give out a trillion in tax breaks, it's hard to create a lot of losers." No wonder the stock market has been roaring in anticipation of fatter after-tax corp profits. The new law slashes the corp tax rate to 21% from 35% & applies a low one-time tax to the profits that corps have long kept overseas to avoid paying taxes under the current higher rate. It also delivers a windfall to people who pay personal taxes on business earnings. It lets companies immediately write off the full cost of new equipment. And it showers goodies on some individual industries, such as craft brewers, distilleries & wineries. The reasoning behind shrinking the tax burdens of corps is to free up money for companies to invest in buildings, equipment & people & thereby juice the economy, &, in turn, benefit workers. Yet some economists have expressed doubts that workers will benefit much from lower corp tax burdens. In $s, the biggest tax savings from 2018-2027 go to manufacturers: $262B & the next-most-fortunate are insurance & finance companies ($249B) & retailers ($171B). Supporters of the tax bill point out that America's 35% corp tax is one of the highest among advanced economies. But the tax code is so riddled with loopholes that few corps have actually paid that list price. Without the new law, the effective tax rate across all industries would have been 21.2% next year. With it, the effective rate across industries could drop to 9.2% in 2018. Not all industries have gained equally from loopholes. Retailers, for example, would have paid a 27.5% rate in 2018; under the new law, they'll pay just 15.6%. "The tax bill is a big shot in the arm for retailers, who have traditionally paid taxes at nearly the full amount," says Matthew Shay, CEO of the National Retail Federation. Shay says he thinks the bill will help retailers accelerate investment in e-commerce & mobile technology. He also predicts that the bill will induce foreign-owned retailers to shift investment $s into the US.
Housing prices in 20 US cities accelerated more than forecast in Oct, rising by the most since mid-2014 as lean inventories continued to prop up values amid steady demand, S&P CoreLogic Case-Shiller data showed. 20-city property values index increased 6.4% Y/Y (est 6.3%), the biggest gain since Jul 2014. The national home-price gauge rose 6.2% Y/Y, the most since Jun 2014. Seasonally adjusted 20-city index advanced 0.7% M/M (est 0.6%). A lingering shortage of previously owned homes is keeping housing prices elevated. That's allowed homeowners to recover the equity lost during the housing collapse & recession a decade ago. Sales, meanwhile, are strengthening as the labor market remains robust & borrowing costs stay close to historically low levels. For those looking to buy for the first time, conditions are less favorable. Growth in property values is outpacing wage gains & limiting affordability, representing a headwind for the market. Biggest gains in home prices occurring from the Rockies to the Pacific. “Home prices continue their climb supported by low inventories and increasing sales,” David Blitzer, chairman of the S&P index committee, said. But that climb may be interrupted by the Federal Reserve hiking interest rates next year, he added. “Since home prices are rising faster than wages, salaries, and inflation, some areas could see potential homebuyers compelled to look at renting."
The Dow & NAZ were hurt by a report that Apple (AAPL), with the largest market cap, will cut its sales forecast for the iPhone X by 40% in the qtr to 30M units. The stock dropped 4½ (3%). Otherwise, stocks did well on a sluggish day in the market. Dow remains about 250 short of 25K. The bulls could still take it there by the end of the year. Thoughts about how the tax bill will help the economy & strong economic data continue to bring out stock buyers. Meanwhile, gold (negative bets on stocks) is advancing.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Americans displayed their buying bona fides in the final run-up to Christmas, turning out in force to produce what may be the best holiday shopping season in years. And why not? A nation that loves to spend has plenty to feel good about, with low unemployment & a robust stock market. The season's tally should reach $671B, a “stellar” 5.5% increase from last year, according to Craig Johnson, head of research firm Customer Growth Partners. That would be the most since 2005, according to his calculations. The timing of Christmas didn't hurt, either, with a full weekend for procrastinators to redeem themselves. But signs of success were present all along, including a yen for home goods & electronics. Johnson boosted his holiday forecast earlier this month & he notes that retailers didn't have to resort to last-minute markdowns to draw shoppers. They were already coming in via the digital or brick-&-mortar doors. Sales thru Christmas Eve were about $598B, Johnson said & he expects another $73B to come this week.
This Holiday Shopping Season May Be the Best in More Than a Decade
China can achieve a goal of doubling the size of its economy by 2020 even if annual expansion slows to 6.3%, according to a senior Communist Party official, signaling a greater willingness to tackle debt & pollution at the expense of growth. In its blueprint for 2016 to 2020, China set a minimum annual growth target of 6.5% for the 5-year period to achieve the goal of doubling GDP from 2010 levels. But,an official from the Communist Party committee overseeing economic policy, said annualized growth of 6.3% in 2018-2020 would do. Based on current economic performance, the 2020 target won’t be a "huge barrier," the official said. China is seen growing 6.8% this year & 6.5% in 2018, according estimates. Pres Xi Jinping & other top leaders have likewise signaled less emphasis on growth, pledging earlier this month to focus on "critical battles" against financial risk, pollution & poverty in the next 3 years. The notion that China would abandon a growth target before 2020 was dismissed. GDP will reach 80T yuan ($12.2T) by year end, the State Council research office said. The economy only needs to grow by 6.3% a year & residential income by 5.3% to reach the targets of doubling 2020 GDP & per capita income from 2010 levels.
China Signals Slower Growth Is Acceptable to Tackle Debt, Smog
Craft breweries are raising a glass to the Reps' new tax overhaul: It cuts the excise tax on beer. Retailers, long saddled with heavy tax bills, will get relief. So will some high-profile names in corp finance. The tax measure that Pres Trump signed into law Fri distributes benefits across a range of American industries, from construction to health care. "As a general rule of thumb, everybody's doing well under this bill," Martin Sullivan, chief economist at Tax Analysts, says of US companies. "When you give out a trillion in tax breaks, it's hard to create a lot of losers." No wonder the stock market has been roaring in anticipation of fatter after-tax corp profits. The new law slashes the corp tax rate to 21% from 35% & applies a low one-time tax to the profits that corps have long kept overseas to avoid paying taxes under the current higher rate. It also delivers a windfall to people who pay personal taxes on business earnings. It lets companies immediately write off the full cost of new equipment. And it showers goodies on some individual industries, such as craft brewers, distilleries & wineries. The reasoning behind shrinking the tax burdens of corps is to free up money for companies to invest in buildings, equipment & people & thereby juice the economy, &, in turn, benefit workers. Yet some economists have expressed doubts that workers will benefit much from lower corp tax burdens. In $s, the biggest tax savings from 2018-2027 go to manufacturers: $262B & the next-most-fortunate are insurance & finance companies ($249B) & retailers ($171B). Supporters of the tax bill point out that America's 35% corp tax is one of the highest among advanced economies. But the tax code is so riddled with loopholes that few corps have actually paid that list price. Without the new law, the effective tax rate across all industries would have been 21.2% next year. With it, the effective rate across industries could drop to 9.2% in 2018. Not all industries have gained equally from loopholes. Retailers, for example, would have paid a 27.5% rate in 2018; under the new law, they'll pay just 15.6%. "The tax bill is a big shot in the arm for retailers, who have traditionally paid taxes at nearly the full amount," says Matthew Shay, CEO of the National Retail Federation. Shay says he thinks the bill will help retailers accelerate investment in e-commerce & mobile technology. He also predicts that the bill will induce foreign-owned retailers to shift investment $s into the US.
US industries can start counting their benefits from tax law
Housing prices in 20 US cities accelerated more than forecast in Oct, rising by the most since mid-2014 as lean inventories continued to prop up values amid steady demand, S&P CoreLogic Case-Shiller data showed. 20-city property values index increased 6.4% Y/Y (est 6.3%), the biggest gain since Jul 2014. The national home-price gauge rose 6.2% Y/Y, the most since Jun 2014. Seasonally adjusted 20-city index advanced 0.7% M/M (est 0.6%). A lingering shortage of previously owned homes is keeping housing prices elevated. That's allowed homeowners to recover the equity lost during the housing collapse & recession a decade ago. Sales, meanwhile, are strengthening as the labor market remains robust & borrowing costs stay close to historically low levels. For those looking to buy for the first time, conditions are less favorable. Growth in property values is outpacing wage gains & limiting affordability, representing a headwind for the market. Biggest gains in home prices occurring from the Rockies to the Pacific. “Home prices continue their climb supported by low inventories and increasing sales,” David Blitzer, chairman of the S&P index committee, said. But that climb may be interrupted by the Federal Reserve hiking interest rates next year, he added. “Since home prices are rising faster than wages, salaries, and inflation, some areas could see potential homebuyers compelled to look at renting."
The Dow & NAZ were hurt by a report that Apple (AAPL), with the largest market cap, will cut its sales forecast for the iPhone X by 40% in the qtr to 30M units. The stock dropped 4½ (3%). Otherwise, stocks did well on a sluggish day in the market. Dow remains about 250 short of 25K. The bulls could still take it there by the end of the year. Thoughts about how the tax bill will help the economy & strong economic data continue to bring out stock buyers. Meanwhile, gold (negative bets on stocks) is advancing.
Dow Jones Industrials
No comments:
Post a Comment