Dow went up 30, advancers over decliners 5-4 & NAZ gained 37. The MLP index rose 2+ to the 298s. Junk bond funds were mixed & Treasuries slid lower. Oil inched higher in the 63s & gold was flattish at 1333 (not far from recent highs).
AMJ (Alerian MLP Index tracking fund)
Stocks fluctuated as investors discounted the impact of the US gov partial shutdown & look toward a busy week of earnings. The $ weakened & Treasuries halted a recent selloff. The S&P 500 Index was mixed after a 3rd straight weekly gain ahead of earnings reports. European & Asian stocks climbed as emerging-market shares posted the best run since Jul. The $ slipped against most major currencies along with 10-year Treasury yields as Congress remained at an impasse over funding the gov for a 3rd day. The € climbed on optimism that German Chancellor Angela Merkel has made a potential breakthrough toward a 4th term. Nonetheless equity investors appear undecided over the latest US gov drama, weighing it against optimism over economic growth & profit increases that pushed many stock indices to all-time highs. Meanwhile, the next catalyst for bonds may come from commentary by policy makers after European & Japanese central bank decisions this week. Their signals that unprecedented stimulus will soon be wound back has sparked a surge in yields this month. West Texas oil was little changed after OPEC & Russia said output cuts will continue until the end of the year. The MSCI Emerging Market Index of stocks rose for a 7th day, poised for the longest winning streak in 6 months from the chorus of developing-nation bulls. Traders monitored China's appetite for a stronger currency as the yuan touched the symbolically key level of 6.4 per $. South Africa's rand rose to its highest since 2015 on speculation Pres Zuma may be forced to leave office.
Global growth is forecast to accelerate to the fastest pace in 7 years as US tax cuts spur businesses to invest, the IMF said. The fund raised its forecast for world expansion to 3.9% this year & next, up 0.2 percentage point both years from its projection in Oct. That would be the fastest rate since 2011, when the world was bouncing back from the financial crisis. About ½ of the IMF's global upgrade stems from the tax cuts passed in Dec & enacted this year. Cuts to the corp tax rate will give the world's biggest economy a shot in the arm, lifting US growth to 2.7% this year, 0.4 point higher than the fund expected in Oct, the IMF said in an update to its World Economic Outlook. Projected US growth was the highest among advanced economies. But in an unfortunate twist for Pres, who loathes the $505B trade gap, the nation’s current-account deficit will widen as stronger demand drives imports. The IMF also predicted that the tax plan will reduce US growth after 2022, offsetting earlier gains, as some of the individual cuts expire & the US tries to curb its budget deficit. The IMF also warns that a financial-market correction could spoil the party, a possible scenario it raises amid “rich asset valuations and very compressed term premiums.” Higher inflation could prompt the US Federal Reserve to raise its benchmark interest rate faster than expected, causing financial conditions to tighten around the world & sideswiping economies with heavy debt loads. The IMF’s sunnier outlook will be cause for relief as the world's financial & political elite converge on Davos this week for the annual meeting of the World Economic Forum. Just past the first anniversary of his administration, Trump is scheduled to speak on Jan 26 to deliver an “America First” message touting his economic agenda. A gov shutdown in DC could scuttle the his plans for Davos, though. Some of the discussion in Davos will be focused on guarding against complacency. In addition to overheating in financial markets, the IMF flagged protectionism, geopolitical tensions & extreme weather as risks to the global economy. The IMF says the global recovery now under way is the broadest in 7 years, with growth picking up last year in 120 countries accounting for ¾ of world output. The fund lifted its outlook for the euro zone to 2.2% growth in 2018, up 0.3 point from Oct & Japan will grow 1.2% in 2018, up 0.5 point. China will expand at a 6.6% pace this year, up 0.1 point from Oct. The fund left its 2018 forecast for India unchanged from 3 months ago, at 7.4%. As the UK works thru Brexit, its growth was forecast at 1.5% in 2018 & again in 2019.
IMF Raises 2018 Global Growth Forecast, Partly on U.S. Tax Cuts
The equity rally that saw the S&P 500 cap its 3rd straight weekly advance, the best start since 1987, is being driven by 2 things: Upward earnings revisions & the crush of money flowing into stocks. Optimism that the advance fueled by Trump's presidency will keep going is high among institutions & mom-&-pop investors alike. A survey by the Univ of Mich shows that a record 66% of Americans believe the stock market will climb in the next year.
Those guys in DC continue to spin their wheels, going nowhere fast as the gov shutdown goes on with no sign of ending. Both sides are digging their heels in, not a good outlook going forward. But today's report from the IMF & the survey of investors' attitudes is encouraging for the stock markets with market averages at or very near record highs. Additionally, earnings reports are expected to be favorable. Now those guys in DC need to get their act together so the stock market can advance.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 63.22 | -0.15 | -0.2% |
| GC=F | Gold | 1,332.40 | -0.70 | -0.1% |
Stocks fluctuated as investors discounted the impact of the US gov partial shutdown & look toward a busy week of earnings. The $ weakened & Treasuries halted a recent selloff. The S&P 500 Index was mixed after a 3rd straight weekly gain ahead of earnings reports. European & Asian stocks climbed as emerging-market shares posted the best run since Jul. The $ slipped against most major currencies along with 10-year Treasury yields as Congress remained at an impasse over funding the gov for a 3rd day. The € climbed on optimism that German Chancellor Angela Merkel has made a potential breakthrough toward a 4th term. Nonetheless equity investors appear undecided over the latest US gov drama, weighing it against optimism over economic growth & profit increases that pushed many stock indices to all-time highs. Meanwhile, the next catalyst for bonds may come from commentary by policy makers after European & Japanese central bank decisions this week. Their signals that unprecedented stimulus will soon be wound back has sparked a surge in yields this month. West Texas oil was little changed after OPEC & Russia said output cuts will continue until the end of the year. The MSCI Emerging Market Index of stocks rose for a 7th day, poised for the longest winning streak in 6 months from the chorus of developing-nation bulls. Traders monitored China's appetite for a stronger currency as the yuan touched the symbolically key level of 6.4 per $. South Africa's rand rose to its highest since 2015 on speculation Pres Zuma may be forced to leave office.
Stocks Mixed, Treasuries Rise as Shutdown Drags On: Markets Wrap
Global growth is forecast to accelerate to the fastest pace in 7 years as US tax cuts spur businesses to invest, the IMF said. The fund raised its forecast for world expansion to 3.9% this year & next, up 0.2 percentage point both years from its projection in Oct. That would be the fastest rate since 2011, when the world was bouncing back from the financial crisis. About ½ of the IMF's global upgrade stems from the tax cuts passed in Dec & enacted this year. Cuts to the corp tax rate will give the world's biggest economy a shot in the arm, lifting US growth to 2.7% this year, 0.4 point higher than the fund expected in Oct, the IMF said in an update to its World Economic Outlook. Projected US growth was the highest among advanced economies. But in an unfortunate twist for Pres, who loathes the $505B trade gap, the nation’s current-account deficit will widen as stronger demand drives imports. The IMF also predicted that the tax plan will reduce US growth after 2022, offsetting earlier gains, as some of the individual cuts expire & the US tries to curb its budget deficit. The IMF also warns that a financial-market correction could spoil the party, a possible scenario it raises amid “rich asset valuations and very compressed term premiums.” Higher inflation could prompt the US Federal Reserve to raise its benchmark interest rate faster than expected, causing financial conditions to tighten around the world & sideswiping economies with heavy debt loads. The IMF’s sunnier outlook will be cause for relief as the world's financial & political elite converge on Davos this week for the annual meeting of the World Economic Forum. Just past the first anniversary of his administration, Trump is scheduled to speak on Jan 26 to deliver an “America First” message touting his economic agenda. A gov shutdown in DC could scuttle the his plans for Davos, though. Some of the discussion in Davos will be focused on guarding against complacency. In addition to overheating in financial markets, the IMF flagged protectionism, geopolitical tensions & extreme weather as risks to the global economy. The IMF says the global recovery now under way is the broadest in 7 years, with growth picking up last year in 120 countries accounting for ¾ of world output. The fund lifted its outlook for the euro zone to 2.2% growth in 2018, up 0.3 point from Oct & Japan will grow 1.2% in 2018, up 0.5 point. China will expand at a 6.6% pace this year, up 0.1 point from Oct. The fund left its 2018 forecast for India unchanged from 3 months ago, at 7.4%. As the UK works thru Brexit, its growth was forecast at 1.5% in 2018 & again in 2019.
IMF Raises 2018 Global Growth Forecast, Partly on U.S. Tax Cuts
The equity rally that saw the S&P 500 cap its 3rd straight weekly advance, the best start since 1987, is being driven by 2 things: Upward earnings revisions & the crush of money flowing into stocks. Optimism that the advance fueled by Trump's presidency will keep going is high among institutions & mom-&-pop investors alike. A survey by the Univ of Mich shows that a record 66% of Americans believe the stock market will climb in the next year.
Survey Shows Record 66% of Americans Are Bullish About Stocks
Those guys in DC continue to spin their wheels, going nowhere fast as the gov shutdown goes on with no sign of ending. Both sides are digging their heels in, not a good outlook going forward. But today's report from the IMF & the survey of investors' attitudes is encouraging for the stock markets with market averages at or very near record highs. Additionally, earnings reports are expected to be favorable. Now those guys in DC need to get their act together so the stock market can advance.
Dow Jones Industrials
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