Dow gained 240, advancers over decliners better than 5-2 & NAZ added a modest 34. The MLP index recovered 4+ to the 243s & the REIT index went up 3+ to the 329s. Junk bond funds fluctuated & Treasuries were sold all day, raising their their yields. Oil climbed in the 63s & gold lost 11 to 1328 while stocks were being purchased.
AMJ (Alerian MLP index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.592671116830888)
Pres Trump's push to rebalance global trade in America's favor has investors on edge, as his threats to impose import tariffs and curb foreign investment raise the specter of retaliation that could spark a global trade war. US stocks continued rising today after American & Chinese officials the previous day indicated a willingness to find a negotiated solution to their trade spat. But neither side has announced plans to hold formal talks to stop them from imposing tariffs on each others' goods. Pres Trump called Chinese Pres Xi Jinping a “friend” but said it’s time to stop China from “taking advantage” of America over trade. Trump spoke at an event in West Virginia where he touched on US trading relationships all over the globe.
EU, Japan Join U.S. WTO Complaint Over China Tech
Chinese state media hailed their leaders' quick counteroffensive in the brewing trade war with the US & said America would learn a “painful lesson” by tangling with China. The articles & editorials across the Communist Party's media stable came even as the country started a long holiday weekend. They emphasized that China was acting only in self-defense & that the Trump administration's move to levy a 25% tariff on about 1300 types of Chinese imports was opposed by many in the US. “As China deploys its counterattack, the pleasure that the U.S. achieved from those tariffs will now cause them suffering as their financial and political gains diminish to zero,” the Global Times wrote in an editorial. The tabloid, which sometimes takes more hawkish positions, has run 5 editorials on the trade issue since Mon. China said it would levy an additional 25% tariff on about $50B of US imports, matching the scale of proposed US tariffs. The US is allowing 60 days for public feedback, leaving room for talks. China has said its tariffs will take effect when the US ones do. The People's Daily, the Communist Party's mouthpiece, hailed the quickness of China's reciprocal tariffs, saying “China showed its sword in less than 24 hours with a reaction that even the Americans must not have anticipated.” It devoted 3 pages in today's edition to coverage of the tit-for-tat tariffs. The paper said that Sino-US ties were no longer that of David & Goliath, but of 2 equally matched giants, & that Pres Trump's incitement of a trade war was out of step with global sentiment. The daily's correspondents based in the US filed an article about how businesses & consumers in the US opposed Trump's tariffs. The Global Times said China had many more weapons in its arsenal to deploy against the US in the event of a trade war. It could devalue its currency, or promote the yuan as an alternative to the $ in the global financial system.
Small-business owners in the US are becoming more aggressive with their pay packages as the tight job market makes it difficult to attract talent. The National Federation of Independent Business (NFIB) said a net 33% of small firms raised compensation in Mar, the largest share since 2000, as hiring plans picked up. “Small businesses are telling us that they’re optimistic, hiring and willing to raise wages to find the right employees for the businesses,” Juanita Duggan, CEO of the NFIB, said. A net 20%, up 2 percentage points from a month earlier, said they planned to add to payrolls, according to the survey. While the number of firms reporting job openings climbed to 53% in Mar from 52% a month earlier, 47% indicated that they had few or no qualified workers to fill those positions. That helps explain why businesses are making more of an effort to boost pay.
Share of U.S. Small Businesses Raising Pay Hits 17-Year High
US economy can grow 3% to 4%, Larry Kudlow says
Stocks had another good run, but many unanswered questions remain. With 60 days to comment on the new tariffs, that dark cloud will be hanging over the market for 2 months & the bulls will have a difficult time making their case for higher stock prices (even with the US economy supplying good data). The Dow chart below continues to look dreary. Its next goal will be to advance over the 24K level. That won't be easy.
Dow Jones Industrials
AMJ (Alerian MLP index tracking fund)
Pres Trump's push to rebalance global trade in America's favor has investors on edge, as his threats to impose import tariffs and curb foreign investment raise the specter of retaliation that could spark a global trade war. US stocks continued rising today after American & Chinese officials the previous day indicated a willingness to find a negotiated solution to their trade spat. But neither side has announced plans to hold formal talks to stop them from imposing tariffs on each others' goods. Pres Trump called Chinese Pres Xi Jinping a “friend” but said it’s time to stop China from “taking advantage” of America over trade. Trump spoke at an event in West Virginia where he touched on US trading relationships all over the globe.
- “You have to go after the people who aren’t treating you right.”
- “I think we’re going to have a fantastic relationship long term with China but we have to get this straightened out, we have to have some balance.”
- The European Union is “very solidly against us in terms of trade, it’s very unfair. We can’t even do business. They send everything over here, they don’t want to take our product. We can’t let that happen.”
- “We’re working very hard on Nafta with Mexico and Canada. We’ll have something, I think, fairly soon.” He then added, “There’s no rush. We’ll get it done right and we’ll terminate it.”
China announced plans this week to impose 25% retaliatory tariffs on $50B worth of imports from the US if the Trump administration slaps duties on a similar value of Chinese merchandise. China's list of targets included an older model of Boeing (BA & a Dow stock) 737 jetliners while excluding its best-selling 737 Max 8 plane. Targeting BA -- the largest US industrial company & exporter -- raised concerns about the rippling impact on the US economy from an escalating trade spat. The EU & Japan have asked to join the Trump administration's World Trade Organization case over China's alleged discriminatory technology licensing. The EU & Japan said they had a “substantial trade interest” in the US-China dispute proceeding. The Trump administration announced the launch of the the WTO case last week as part of its response to China's alleged theft of US intellectual property. Pres Trump signed an order last week proposing tariffs on about $50B worth of Chinese goods. China this week said it would strike back by imposing tariffs on the same amount of US imports. In the request, the EU said it exports high-tech products to China valued at €30B ($37B) & the aggregate value of EU direct investments into China total €180B. Japan said it is “one of the largest stakeholders in technology transfer to China” & Japanese nationals hold a significant number of patent rights in China.
EU, Japan Join U.S. WTO Complaint Over China Tech
Chinese state media hailed their leaders' quick counteroffensive in the brewing trade war with the US & said America would learn a “painful lesson” by tangling with China. The articles & editorials across the Communist Party's media stable came even as the country started a long holiday weekend. They emphasized that China was acting only in self-defense & that the Trump administration's move to levy a 25% tariff on about 1300 types of Chinese imports was opposed by many in the US. “As China deploys its counterattack, the pleasure that the U.S. achieved from those tariffs will now cause them suffering as their financial and political gains diminish to zero,” the Global Times wrote in an editorial. The tabloid, which sometimes takes more hawkish positions, has run 5 editorials on the trade issue since Mon. China said it would levy an additional 25% tariff on about $50B of US imports, matching the scale of proposed US tariffs. The US is allowing 60 days for public feedback, leaving room for talks. China has said its tariffs will take effect when the US ones do. The People's Daily, the Communist Party's mouthpiece, hailed the quickness of China's reciprocal tariffs, saying “China showed its sword in less than 24 hours with a reaction that even the Americans must not have anticipated.” It devoted 3 pages in today's edition to coverage of the tit-for-tat tariffs. The paper said that Sino-US ties were no longer that of David & Goliath, but of 2 equally matched giants, & that Pres Trump's incitement of a trade war was out of step with global sentiment. The daily's correspondents based in the US filed an article about how businesses & consumers in the US opposed Trump's tariffs. The Global Times said China had many more weapons in its arsenal to deploy against the US in the event of a trade war. It could devalue its currency, or promote the yuan as an alternative to the $ in the global financial system.
China's State Media Warns of Pain for Trump in Trade Battle
Small-business owners in the US are becoming more aggressive with their pay packages as the tight job market makes it difficult to attract talent. The National Federation of Independent Business (NFIB) said a net 33% of small firms raised compensation in Mar, the largest share since 2000, as hiring plans picked up. “Small businesses are telling us that they’re optimistic, hiring and willing to raise wages to find the right employees for the businesses,” Juanita Duggan, CEO of the NFIB, said. A net 20%, up 2 percentage points from a month earlier, said they planned to add to payrolls, according to the survey. While the number of firms reporting job openings climbed to 53% in Mar from 52% a month earlier, 47% indicated that they had few or no qualified workers to fill those positions. That helps explain why businesses are making more of an effort to boost pay.
Share of U.S. Small Businesses Raising Pay Hits 17-Year High
Pres Trump has officially ended the
war on business according to National Economic Council Director Larry
Kudlow, who said the US economy has gotten a head start on economic
growth. “I think it’s possible,” he said, “to be in the three to four percent growth zone,” he said. The
Commerce Dept revised its first estimate of economic growth in
Q4-2017 to 2.5%, down 0.1% from its
earlier estimate. The economy grew 2.3% thru 2017, up from 1.5% in
2016. “The last three quarters we picked up
from under 2 [percent] to 3.1% at an annual rate. Now three quarters is
not a lifetime, I get that, but it’s a good start,” Kudlow said. Trump visited West Virginia today to tout
the benefits of tax reform & wants Congress to consider a “phase two”
of the tax plan. While Kudlow could not predict the precise elements of
the next package, he said the GOP & Pres Trump want expensing & personal income rate tax deductions to be permanent. “That’s
very high on everybody’s list and I think you’d get more bang for the
buck on these tax cuts if you do make them permanent,” he said. “There
are other ideas floating around but perhaps later this year, we’ll see
something more concrete.” As the economy
continues to gain more momentum, wage growth has increased concerns over
higher inflation but Kudlow said he's not concerned about wage growth
getting too hot. “We want to remove barriers,
including trade barriers. I want to remove tax barriers and regulatory
barriers and energy barriers,” he added. “Trump has ended the war on
business. He’s ended the war on investors. He’s ended the war on
success. He doesn’t want to punish people. He wants to reward them.”
US economy can grow 3% to 4%, Larry Kudlow says
Stocks had another good run, but many unanswered questions remain. With 60 days to comment on the new tariffs, that dark cloud will be hanging over the market for 2 months & the bulls will have a difficult time making their case for higher stock prices (even with the US economy supplying good data). The Dow chart below continues to look dreary. Its next goal will be to advance over the 24K level. That won't be easy.
Dow Jones Industrials
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