Dow dropped 93, advancers over decliners less than 5-4 & NAZ was up 31. The MLP index was off fractionally to the 256s. Junk bond funds fluctuated & Treasuries went higher. Oil fell below 61 & gold gave back 5 to 1322.
AMJ (Alerian MLP index tracking)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.7429314997319132)
Pres Trump will sign an order today over steel & aluminum tariffs that he said could spare certain countries if they have strong trading & military ties with the US. Trump will sign the formal proclamations on the tariffs at 3:30PM (Eastern Time). Trump said that Mexico & Canada would likely not face the levies if they renegotiate the North American Free Trade Agreement. He also noted that the US has a trade surplus with Australia & called the nation a “long-term partner.” “We have other countries that are very much involved with us on trade but also on military,” Trump said. “We’ll be making a decision as to who they are.” Trump added that he's “sticking with 10 and 25 initially,” referring to the 10% tariff on aluminum imports & 25% on steel that he has said he'll impose. “I’ll have a right to go up or go down depending on the country, and I’ll have a right to drop out countries or add countries,” Trump said. Trump told reporters they will hear what he is doing at the afternoon meeting & that the administration is “going to be very fair, we’re going to be very flexible” but will protect American workers.
Trump Says U.S. to Be Very Flexible on Tariffs He’ll Sign Today
US household debt jumped in Q4 at the fastest pace of this expansion while wealth gains continued amid a rising stock market, underscoring the forces behind recent strength in consumer spending, a Federal Reserve report showed. Household debt increased at 5.2% annual rate, most in 10 years, after 3.5% in Q3. Net worth for households & non-profit groups rose by $2.08T Q/Q (2.1%, to $98.7T after a downwardly revised $1.65T gain). The value of financial assets, including stocks & pension-fund holdings, increased by $1.7T to $80.4T. The pace of household debt accumulation during the qtr reflects the Fed's previously reported outsize 7.8% annualized rise in consumer credit, along with a 3% gain in mortgage borrowing. Such activity helped fuel a 3.8% rise in consumer spending in the period, the fastest in more than a year. Figures released yesterday showed Americans put away their credit cards in Jan, as revolving credit outstanding rose by the least since early 2015. At the same time, Americans who own stocks & residential real estate benefited from gains in both asset types. The S&P 500 rose 6.1% last qtr, the best performance in 2 years. That advance preceded a correction in Feb; the index was up 2% this year thru yesterday. The median price of an existing home climbed 5.3% nationally in the final qtr of 2017 from a year earlier, according to the National Association of Realtors.
U.S. Household Debt Rose Last Quarter at Fastest Rate Since 2007
The Trump administration has requested a major reduction in the US-China trade deficit, far greater than what the pres claimed was requested. The administration requested a $100B reduction in the trade deficit with China. Officials from the US reportedly made the request during a meeting with Chinese Pres Xi Jinping's top economic deputy last week. Trump tweeted yesterday that China had been asked to cut the deficit with the US by $1B, less than 0.3% of the countries' annual trade gap. “China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” he wrote. The US trade deficit with China ballooned 16.7% to 36B in Jan, the highest since Sep 2015, while the overall shortfall jumped 5% to $56.6B in the month, the highest level since 2008, the Commerce Dept said.
Long-term US mortgage rates climbed this week to their highest average in more than 4 years, ratcheting up affordability pressures at the start of the traditional spring home buying season. Mortgage buyer Freddie Mac said that the average rate on 30-year fixed-rate mortgages climbed to 4.46% this week from 4.43% last week. This marks the highest average since Jan 2014. The 30-year rate averaged 4.21% a year ago. The average rate on 15-year, fixed-rate loans rose to 3.94% from 3.90% last week. Higher mortgage rates appear to be weighing on home sales, since buyers are facing higher borrowing costs. Home purchases slumped 3.2% from Dec to Jan, according to the National Association of Realtors. On a yearly basis, home sales have fallen 4.8%, the sharpest annual decline since Aug 2014. Relatively low mortgage rates had helped to ease the financial pressures from home prices rising faster than wages & the worsening shortage of properties listed for sale. But rising rates are slowly hurting affordability. Mortgage rates have been heading upward for the past 9 weeks. The interest rates charged on home loans usually hew close to changes in inflation & the interest paid on US gov debt. But the recent increases in mortgage rates have come even as the yield on the 10-year Treasury note has stayed below its 2-week high of 2.95%.
European Central Bank leaves key interest rates, monetary stimulus program size unchanged.
Pres Trump is moving ahead with tariffs on steel & aluminum, bucking many members of his own party as he seeks to reinvigorate US industry & protect national security. Here are the details of what Trump is ordering, according to a senior administration official:
• Tariffs of 25% on imported steel and 10% on aluminum.
• Canada & Mexico will be excluded for now, as the US discusses its national security relationships & the North American Free Trade Agreement with both countries.
• Tariffs could be modified for other countries, such as Australia, which Trump called a “long-term partner” at a cabinet meeting.
• The tariffs will go into effect 15 days from today.
The
tariffs are being imposed under a law that allows action to defend
national security, with both materials being critical to
the US defense industrial base.
Trump’s announcement is certain to inflame already-smoldering tensions with congressional Reps, many of whom have urged him to hold off on sweeping tariffs.
Stocks were rising in the last 2 hours on hopes for what the tariff announcement would say. After the announcement, the Dow dropped 100 to around even, then rallied at the close. This is based on gut reactions, more analysis will be done. The Dow is up 200 YTD.
Dow Jones Industrials
AMJ (Alerian MLP index tracking)
Pres Trump will sign an order today over steel & aluminum tariffs that he said could spare certain countries if they have strong trading & military ties with the US. Trump will sign the formal proclamations on the tariffs at 3:30PM (Eastern Time). Trump said that Mexico & Canada would likely not face the levies if they renegotiate the North American Free Trade Agreement. He also noted that the US has a trade surplus with Australia & called the nation a “long-term partner.” “We have other countries that are very much involved with us on trade but also on military,” Trump said. “We’ll be making a decision as to who they are.” Trump added that he's “sticking with 10 and 25 initially,” referring to the 10% tariff on aluminum imports & 25% on steel that he has said he'll impose. “I’ll have a right to go up or go down depending on the country, and I’ll have a right to drop out countries or add countries,” Trump said. Trump told reporters they will hear what he is doing at the afternoon meeting & that the administration is “going to be very fair, we’re going to be very flexible” but will protect American workers.
Trump Says U.S. to Be Very Flexible on Tariffs He’ll Sign Today
US household debt jumped in Q4 at the fastest pace of this expansion while wealth gains continued amid a rising stock market, underscoring the forces behind recent strength in consumer spending, a Federal Reserve report showed. Household debt increased at 5.2% annual rate, most in 10 years, after 3.5% in Q3. Net worth for households & non-profit groups rose by $2.08T Q/Q (2.1%, to $98.7T after a downwardly revised $1.65T gain). The value of financial assets, including stocks & pension-fund holdings, increased by $1.7T to $80.4T. The pace of household debt accumulation during the qtr reflects the Fed's previously reported outsize 7.8% annualized rise in consumer credit, along with a 3% gain in mortgage borrowing. Such activity helped fuel a 3.8% rise in consumer spending in the period, the fastest in more than a year. Figures released yesterday showed Americans put away their credit cards in Jan, as revolving credit outstanding rose by the least since early 2015. At the same time, Americans who own stocks & residential real estate benefited from gains in both asset types. The S&P 500 rose 6.1% last qtr, the best performance in 2 years. That advance preceded a correction in Feb; the index was up 2% this year thru yesterday. The median price of an existing home climbed 5.3% nationally in the final qtr of 2017 from a year earlier, according to the National Association of Realtors.
U.S. Household Debt Rose Last Quarter at Fastest Rate Since 2007
The Trump administration has requested a major reduction in the US-China trade deficit, far greater than what the pres claimed was requested. The administration requested a $100B reduction in the trade deficit with China. Officials from the US reportedly made the request during a meeting with Chinese Pres Xi Jinping's top economic deputy last week. Trump tweeted yesterday that China had been asked to cut the deficit with the US by $1B, less than 0.3% of the countries' annual trade gap. “China has been asked to develop a plan for the year of a One Billion Dollar reduction in their massive Trade Deficit with the United States. Our relationship with China has been a very good one, and we look forward to seeing what ideas they come back with. We must act soon!” he wrote. The US trade deficit with China ballooned 16.7% to 36B in Jan, the highest since Sep 2015, while the overall shortfall jumped 5% to $56.6B in the month, the highest level since 2008, the Commerce Dept said.
Trump administration seeks $100 billion reduction in US-China trade gap
Trade ministers from 11 Pacific Rim countries
signed a sweeping free trade agreement to streamline trade &
slash tariffs on the same day that Pres Trump was expected
to formalize new tariffs on aluminum & steel to protect US
producers. Trump withdrew the US from the
Trans-Pacific Partnership last year, causing fears that it would not
prosper without its most influential country. But the remaining 11
members pressed ahead, saying they were showing resolve against
protectionism through global trade. The
ministers dropped key provisions that the Americans had required on
protection of intellectual property, among others. The renegotiated pact was also renamed the Comprehensive &
Progressive Trans-Pacific Partnership (CPTPP). The
pact that covers 500M people includes Australia, Brunei, Canada,
Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore &
Vietnam. Its success highlights the isolation of the US on trade & the "America first" philosophy. The US, originally the biggest TPP economy, was
one of the trade deal's strongest supporters before Trump took office.
Trump has said he prefers country-to-country deals & is seeking to
renegotiate several major trade agreements, including the North American
Free Trade Agreement that includes the US, Mexico & Canada. This
is "a strong sign against the protectionist pressures, and in favor of a
world open to free trade, without unilateral sanctions and the threat
of trade wars," Chilean Foreign Minister Heraldo Munoz said. The
EU said this week that it is ready to retaliate against
Trump's tariffs, of 25% on imported steel & 10% on
aluminum imports, with counter-measures against iconic US products. The
EU threat & Trump's impending announcement on the tariffs were
expected to escalate the risk of a trade war, in which nations try to
punish each other by hiking taxes on traded goods. Experts say that
tends to harm both exporting nations as well as importing countries'
consumers, who face higher costs. The EU
considers itself to be caught in the crossfire of a trade dispute, in
which Trump has mainly singled out China for being unfair in its
commercial deals. The original TPP was
conceived by the US as a counterweight to China's growing economic
influence through a robust trading bloc that excluded the Asian giant. The thinking was that China would have an incentive to open its market & liberalize its policies in an effort to eventually qualify for TPP
membership. China's foreign minister, Wang Yi, commented on the deal before it was signed. "China
did not participate in the CPTPP Agreement. However, China has always
been a staunch supporter of trade liberalization and an important
participant in Asia-Pacific regional cooperation and economic
integration," Wang Yi said. "Of
course, we also hope that the various free trade arrangements in the
Asia-Pacific region will be able to communicate and coordinate with each
other and form a benign interaction, playing a constructive role in
their respective fields in resisting trade protectionism and building an
open world economy."
11 nations sign Pacific trade pact as Trump plans US tariffs
Long-term US mortgage rates climbed this week to their highest average in more than 4 years, ratcheting up affordability pressures at the start of the traditional spring home buying season. Mortgage buyer Freddie Mac said that the average rate on 30-year fixed-rate mortgages climbed to 4.46% this week from 4.43% last week. This marks the highest average since Jan 2014. The 30-year rate averaged 4.21% a year ago. The average rate on 15-year, fixed-rate loans rose to 3.94% from 3.90% last week. Higher mortgage rates appear to be weighing on home sales, since buyers are facing higher borrowing costs. Home purchases slumped 3.2% from Dec to Jan, according to the National Association of Realtors. On a yearly basis, home sales have fallen 4.8%, the sharpest annual decline since Aug 2014. Relatively low mortgage rates had helped to ease the financial pressures from home prices rising faster than wages & the worsening shortage of properties listed for sale. But rising rates are slowly hurting affordability. Mortgage rates have been heading upward for the past 9 weeks. The interest rates charged on home loans usually hew close to changes in inflation & the interest paid on US gov debt. But the recent increases in mortgage rates have come even as the yield on the 10-year Treasury note has stayed below its 2-week high of 2.95%.
US mortgage rates climb to 4-year high
European Central Bank leaves key interest rates, monetary stimulus program size unchanged.
European Central Bank leaves key interest rates, monetary stimulus program size unchanged
Pres Trump is moving ahead with tariffs on steel & aluminum, bucking many members of his own party as he seeks to reinvigorate US industry & protect national security. Here are the details of what Trump is ordering, according to a senior administration official:
• Tariffs of 25% on imported steel and 10% on aluminum.
• Canada & Mexico will be excluded for now, as the US discusses its national security relationships & the North American Free Trade Agreement with both countries.
• Tariffs could be modified for other countries, such as Australia, which Trump called a “long-term partner” at a cabinet meeting.
• The tariffs will go into effect 15 days from today.
Trump’s announcement is certain to inflame already-smoldering tensions with congressional Reps, many of whom have urged him to hold off on sweeping tariffs.
Here are the details on Trump’s tariffs on steel and aluminum
Stocks were rising in the last 2 hours on hopes for what the tariff announcement would say. After the announcement, the Dow dropped 100 to around even, then rallied at the close. This is based on gut reactions, more analysis will be done. The Dow is up 200 YTD.
Dow Jones Industrials
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