Dow sank 218 (near session lows), advancers slightly ahead of decliners & NAZ lost 25. The MLP index gained 3+ to the 249s along with the advance in oil prices & the REIT index fell to the 324s. Junk bond funds fluctuated & Treasuries crawled higher in price. Oil shot up to the 66s & gold added 10 to 1355 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.7258997143454177)
The US budget deficit widened to $600B halfway thru the fiscal year, as spending growth outstripped revenue. Receipts rose 1.6% to $1.5T between Oct-Mar compared with a year earlier, while outlays climbed by 4.8% to $2.1T, the Treasury Dept said in its monthly budget statement. Corp income taxes fell to $78.6B in H1 of fiscal 2018, from $100.2B a year earlier. Tax & spending measures approved by Pres Trump are expected to push the budget deficit to $804B in the current fiscal year, from $665B in fiscal 2017, & then surpass the $1T mark by 2020. The CBO economic projections released this week were the first since the Trump administration enacted tax cuts this year that the White House says will pay for themselves by generating more economic growth, & also signed off on a $300B spending increase. The non-partisan CBO warned that faster growth would be front-loaded over the next several years, rising to an estimated 3.3% this year, before slowing amid rising inflation & interest rates. Federal debt is expected to be almost 100% of GDP by 2028, an “amount far greater than the debt in any year since just after World War II,” the CBO said. Higher spending on social programs for an aging population is another growing strain on the budget. In H1 of fiscal 2018, social security benefits rose by 4% as the number of beneficiaries & their average payment rose, according to CBO. “Projected deficits over the 2018-2027 period have increased markedly since June 2017, when CBO issued its previous projections,” CBO Director Keith Hall said during a Congressional hearing. “The increase stems primarily from tax and spending legislation enacted since then.” For Mar, the budget deficit widened to $208.7B, up from $176.2B the same month a year earlier.
U.S. Budget Gap Hits $600 Billion in First Half of Fiscal Year
Fed wary of trade war, says tax cuts a 'significant boost'
Oil prices hit new 2018 highs as missile strikes on top crude exporter Saudi Arabia added to the market's worries about escalating conflict between the US & Russia in Syria. Brent, the benchmark for intl oil prices, earlier climbed to its highest level in more than 3 years after Pres Trump earlier warned Russia to "Get ready" for a missile attack on Syria (whose gov Moscow has backed during its 7-year civil war). The threat came after the Russian ambassador to Lebanon said his nation's military would intercept American missiles & potentially target the US craft that fired them. The potential American strike follows a suspected chemical attack on the rebel-held city of Douma, allegedly by forces loyal to Syrian Pres Assad. WTI crude ended the session up $1.31 (2%), at $66.70, its best settle since Dec 2014. During the session, WTI rose as high as $67.45. Brent crude was at $72 a barrel, up 96¢ (1.4$), after hitting a high of $73.09.
Oil hits more than 3-year high on Saudi strikes, US-Russia tension
Gold futures hit their highest price since Aug 2016, rising as investors fled to perceived safe havens after Pres Trump threatened a missile strike in Syria. Gold for Jun climbed as much as 1.75% to $1369 an ounce, its highest level since Aug 2016. Gold futures prices later retreated slightly from those levels. The metal's price jumped markedly after Trump warned Russia to "get ready" for a missile strike in Syria following a recent chemical weapons attack allegedly carried out by the gov of Syrian Pres Assad. Trump also criticized Russia's gov in a rare rebuke on Sun, scolding Russian Pres Putin for Moscow's support of Assad. Trump said in a tweet: "Get ready Russia, because [missiles] will be coming, nice and new and 'smart!' You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it!" Assets such as gold & US Treasuries, considered less risky options by many investors, rallied immediately after these comments. Investors have been patiently waiting for gold to break above its Aug 2016 high, around $1377 an ounce, which would send the metal to levels not seen since Mar 2014. Gold rose even after the latest data pointed to tame inflation. The Labor Dept reported that consumer prices fell for the first time in 10 months in Mar, hampered by a decline in gasoline prices. The dept did report, however, that core CPI, which excludes volatile energy & food components, climbed 0.2% to bring its year-on-year gain to 2.1%, its largest advance since Feb 2017.
Tensions are high in the Mideast. Saudi Arabia intercepted another missile fired at Riyadh today. Gold & oil have been rising for days with growing demand from growing uncertainties in the Mideast. Trump will have to play out this hand, not much to do until that happens, although earnings reports will bring excitement. The Dow continues to stay close to 24K as it has done for weeks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The US budget deficit widened to $600B halfway thru the fiscal year, as spending growth outstripped revenue. Receipts rose 1.6% to $1.5T between Oct-Mar compared with a year earlier, while outlays climbed by 4.8% to $2.1T, the Treasury Dept said in its monthly budget statement. Corp income taxes fell to $78.6B in H1 of fiscal 2018, from $100.2B a year earlier. Tax & spending measures approved by Pres Trump are expected to push the budget deficit to $804B in the current fiscal year, from $665B in fiscal 2017, & then surpass the $1T mark by 2020. The CBO economic projections released this week were the first since the Trump administration enacted tax cuts this year that the White House says will pay for themselves by generating more economic growth, & also signed off on a $300B spending increase. The non-partisan CBO warned that faster growth would be front-loaded over the next several years, rising to an estimated 3.3% this year, before slowing amid rising inflation & interest rates. Federal debt is expected to be almost 100% of GDP by 2028, an “amount far greater than the debt in any year since just after World War II,” the CBO said. Higher spending on social programs for an aging population is another growing strain on the budget. In H1 of fiscal 2018, social security benefits rose by 4% as the number of beneficiaries & their average payment rose, according to CBO. “Projected deficits over the 2018-2027 period have increased markedly since June 2017, when CBO issued its previous projections,” CBO Director Keith Hall said during a Congressional hearing. “The increase stems primarily from tax and spending legislation enacted since then.” For Mar, the budget deficit widened to $208.7B, up from $176.2B the same month a year earlier.
U.S. Budget Gap Hits $600 Billion in First Half of Fiscal Year
Federal Reserve officials expect to quicken the
pace of interest rate hikes over the next few years as tax cuts
contribute to a brighter US economic outlook. In
minutes from the central bank's Mar meeting, the Fed said that members of the policy-setting FOMC believe
inflation will move closer to its 2% target in the coming months, even
as wage growth remains modest.“ A number of
participants” indicated that a stronger economic forecast & increased
confidence of higher inflation “implied that the appropriate path for
the federal funds rate over the next few years would likely be slightly
steeper than they had previously expected,” the FOMC said. Officials also see the $1.5T
tax reform package, signed in Dec,
providing a “significant boost” to the economy. During the meeting, the Fed lifted its
estimate for US growth to 2.7% in 2018, up from 2.5%, &
raised the benchmark interest rate by a qtr-percentage point. The
Fed cited increased trade tensions as a potential headwind for the
economy. Tariffs imposed on steel & aluminum are unlikely to
have a significant effect on the economic outlook, but a “strong
majority” of meeting participants agreed that any retaliation by other
nations & uncertainty over trade policies present “downside risks” to
the economy.
Fed wary of trade war, says tax cuts a 'significant boost'
Oil prices hit new 2018 highs as missile strikes on top crude exporter Saudi Arabia added to the market's worries about escalating conflict between the US & Russia in Syria. Brent, the benchmark for intl oil prices, earlier climbed to its highest level in more than 3 years after Pres Trump earlier warned Russia to "Get ready" for a missile attack on Syria (whose gov Moscow has backed during its 7-year civil war). The threat came after the Russian ambassador to Lebanon said his nation's military would intercept American missiles & potentially target the US craft that fired them. The potential American strike follows a suspected chemical attack on the rebel-held city of Douma, allegedly by forces loyal to Syrian Pres Assad. WTI crude ended the session up $1.31 (2%), at $66.70, its best settle since Dec 2014. During the session, WTI rose as high as $67.45. Brent crude was at $72 a barrel, up 96¢ (1.4$), after hitting a high of $73.09.
Oil hits more than 3-year high on Saudi strikes, US-Russia tension
Gold futures hit their highest price since Aug 2016, rising as investors fled to perceived safe havens after Pres Trump threatened a missile strike in Syria. Gold for Jun climbed as much as 1.75% to $1369 an ounce, its highest level since Aug 2016. Gold futures prices later retreated slightly from those levels. The metal's price jumped markedly after Trump warned Russia to "get ready" for a missile strike in Syria following a recent chemical weapons attack allegedly carried out by the gov of Syrian Pres Assad. Trump also criticized Russia's gov in a rare rebuke on Sun, scolding Russian Pres Putin for Moscow's support of Assad. Trump said in a tweet: "Get ready Russia, because [missiles] will be coming, nice and new and 'smart!' You shouldn't be partners with a Gas Killing Animal who kills his people and enjoys it!" Assets such as gold & US Treasuries, considered less risky options by many investors, rallied immediately after these comments. Investors have been patiently waiting for gold to break above its Aug 2016 high, around $1377 an ounce, which would send the metal to levels not seen since Mar 2014. Gold rose even after the latest data pointed to tame inflation. The Labor Dept reported that consumer prices fell for the first time in 10 months in Mar, hampered by a decline in gasoline prices. The dept did report, however, that core CPI, which excludes volatile energy & food components, climbed 0.2% to bring its year-on-year gain to 2.1%, its largest advance since Feb 2017.
Tensions are high in the Mideast. Saudi Arabia intercepted another missile fired at Riyadh today. Gold & oil have been rising for days with growing demand from growing uncertainties in the Mideast. Trump will have to play out this hand, not much to do until that happens, although earnings reports will bring excitement. The Dow continues to stay close to 24K as it has done for weeks.
Dow Jones Industrials
No comments:
Post a Comment