Dowsoard 460, advancers over decliners about 5-1 & NAZ shot up 111. The MLP index recovered 4+ to the 243s & the REIT index was fractionally lower in the 326s. Junk bond funds rose & Treasuries eased back slightly. Oil gained 1+ to the 64s & gold crawled up 2 to 1242.
AMJ (Alerian MLP Index tracking fund)
Trade talks between the world's biggest economies broke down last week after the Trump administration demanded that China curtail support for high-technology industries, according to a leaker, signaling that a resolution may be some ways off. Liu He, a vice premier overseeing economics & finance, told a group of officials Thurs that Beijing had rejected a US request to stop subsidizing industries related to its "Made in China 2025" initiative. The US has accused China of using the policy to force companies into transferring technology in areas like robotics, aerospace & artificial intelligence. The US demands came after Beijing offered to narrow the trade deficit by $50B, including by importing more liquefied natural gas, agricultural products, semiconductors & luxury goods. The plans also included opening the financial sector at a faster rate & giving US companies more access to China's booming e-commerce market. Liu said Pres Xi Jinping was ready to fight back hard if US counterpart Trump wanted a trade war. China was open to talks with the US, but wouldn’t initiate them under the current conditions. The dust-up suggests that the trade dispute won't be resolved quickly, despite Trump's optimistic tweets & Xi's conciliatory address to a regional economic forum today. In recent days, Chinese officials have expressed increased frustration with the US, with the foreign ministry yesterday calling talks “impossible” under current conditions. Trump later signaled that a deal with China was within reach, saying his administration would “probably” resolve a dispute that has roiled financial markets and raised fears of a major clash between the world's biggest economies. Xi's speech today lifted stocks in Asia & US equity futures. Xi pledged a “new phase of opening up” & reiterated plans to allow more foreign participation in sectors like automobile manufacturing & banking, & said China would strengthen measures to protect intellectual property rights. Xi also called on countries to export high-technology goods to China, which has been a point of contention with the US. A commentary in the official People's Daily after the speech said Beijing would never open at the expense of its interests, a signal that it would continue supporting “Made in China 2025.” A White House official who watched Xi's speech welcomed his remarks on intellectual property while saying that actions speak louder than words. Trump's administration was unified in the view that US jobs were endangered by what it called China's forced technology transfers & state-directed intellectual property theft. The White House said China should change its behavior & take action to change the trajectory of its trading relationship with the US.
U.S.-China Talks Stalled Over Trump’s Demands on High-Tech Industries
Stocks surged following conciliatory remarks from Chinese Pres Xi Jinping aimed at releasing some pressure from a trade dispute between the world's biggest economies. Treasuries fell with the $. All major US equity indexes were up more than 1% & around the world stocks responded to Xi's speech, in which he said Cold War & zero-sum mentalities were “out of place,” & backed free trade & dialogue to resolve disputes. The Stoxx Europe 600 Index followed shares from Sydney to Hong Kong higher. With Xi's comments & Pres Trump's more friendly tone pointing to a potentially less combative approach to the nations' disagreements, traders are weighing whether fears of a trade war have become overblown. That’s reinvigorating faith in the synchronized global-growth story ahead of earnings season, even after a Federal Reserve official cautioned that the spat won't be resolved soon. Oil & metals climbed. Treasuries extended declines with the ¥ & gold pared a drop to trade little changed after the US gov reported that wholesale prices rose more than expected in Mar. European gov bonds edged lower & the single currency rose after somewhat hawkish remarks by a ECB official. Meanwhile, political worries simmered in the background. Despite gains in technology stocks driving US equities higher on yesterday, the S&P 500 erased about 2/3 of its advance following news the FBI conducted a raid at the office of Trump's longtime lawyer. And Russian assets remain in focus in the wake of a fresh round of US sanctions. The ruble extended its decline, dropping to the weakest level since Dec 2016 & equities fluctuated before rising. The € rose with European sovereign bond yields after ECB Governing Council member Ewald Nowotny said that he “would have no problem” with raising rates under certain conditions.
Sentiment among US small companies took a step back in Mar as a smaller share of owners said they expected business conditions to improve in coming months, a possible reflection of concerns about the economic impact from tariffs. Expansion plans & sales expectations also eased, pushing the index of small-business optimism to a 5-month low of 104.7, according to the National Federation of Independent Business (NFIB). In Feb, the group's gauge of sentiment advanced to 107.6, the 2nd-highest level in the survey’s 45-year history. While the NFIB doesn't explicitly ask respondents why they are more upbeat or less confident, 8 of the 10 components that make up the index declined in Mar. That may indicate tariffs on some imported steel & aluminum, along with heated rhetoric between US & Chinese officials over proposed trade actions, could be playing a role in tamping down sentiment. At the same time, the index remains near a record & the report contained some promising aspects about the economy. A measure of earnings trends was the 2nd-best since 1987 & a greater share of small-business owners reported higher average selling prices. The latter helps explain why Federal Reserve policy makers have been raising interest rates. Last week, the NFIB reported that a net 33% of small firms raised compensation during the month, the largest share since 2000, as hiring plans picked up.
The speech by Xi got a lot of attention & a warm reception around the world. But it's just a speech. Hard talks about trade issues lie ahead & they will last for some time. No quick solutions are seen. In addition, Zucherberg testifies before Congress today & that can produce tense times. Big tech companies have been making a lot of money. Now fresh eyes in Congress will be looking at tech companies & questions of privacy are coming. For the time being, Xi's speech is controlling the stock market.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 64.75 | +1.33 | +2.1% |
| GC=F | Gold | 1,342.70 | +2.60 | +0.2% |
Trade talks between the world's biggest economies broke down last week after the Trump administration demanded that China curtail support for high-technology industries, according to a leaker, signaling that a resolution may be some ways off. Liu He, a vice premier overseeing economics & finance, told a group of officials Thurs that Beijing had rejected a US request to stop subsidizing industries related to its "Made in China 2025" initiative. The US has accused China of using the policy to force companies into transferring technology in areas like robotics, aerospace & artificial intelligence. The US demands came after Beijing offered to narrow the trade deficit by $50B, including by importing more liquefied natural gas, agricultural products, semiconductors & luxury goods. The plans also included opening the financial sector at a faster rate & giving US companies more access to China's booming e-commerce market. Liu said Pres Xi Jinping was ready to fight back hard if US counterpart Trump wanted a trade war. China was open to talks with the US, but wouldn’t initiate them under the current conditions. The dust-up suggests that the trade dispute won't be resolved quickly, despite Trump's optimistic tweets & Xi's conciliatory address to a regional economic forum today. In recent days, Chinese officials have expressed increased frustration with the US, with the foreign ministry yesterday calling talks “impossible” under current conditions. Trump later signaled that a deal with China was within reach, saying his administration would “probably” resolve a dispute that has roiled financial markets and raised fears of a major clash between the world's biggest economies. Xi's speech today lifted stocks in Asia & US equity futures. Xi pledged a “new phase of opening up” & reiterated plans to allow more foreign participation in sectors like automobile manufacturing & banking, & said China would strengthen measures to protect intellectual property rights. Xi also called on countries to export high-technology goods to China, which has been a point of contention with the US. A commentary in the official People's Daily after the speech said Beijing would never open at the expense of its interests, a signal that it would continue supporting “Made in China 2025.” A White House official who watched Xi's speech welcomed his remarks on intellectual property while saying that actions speak louder than words. Trump's administration was unified in the view that US jobs were endangered by what it called China's forced technology transfers & state-directed intellectual property theft. The White House said China should change its behavior & take action to change the trajectory of its trading relationship with the US.
U.S.-China Talks Stalled Over Trump’s Demands on High-Tech Industries
Stocks surged following conciliatory remarks from Chinese Pres Xi Jinping aimed at releasing some pressure from a trade dispute between the world's biggest economies. Treasuries fell with the $. All major US equity indexes were up more than 1% & around the world stocks responded to Xi's speech, in which he said Cold War & zero-sum mentalities were “out of place,” & backed free trade & dialogue to resolve disputes. The Stoxx Europe 600 Index followed shares from Sydney to Hong Kong higher. With Xi's comments & Pres Trump's more friendly tone pointing to a potentially less combative approach to the nations' disagreements, traders are weighing whether fears of a trade war have become overblown. That’s reinvigorating faith in the synchronized global-growth story ahead of earnings season, even after a Federal Reserve official cautioned that the spat won't be resolved soon. Oil & metals climbed. Treasuries extended declines with the ¥ & gold pared a drop to trade little changed after the US gov reported that wholesale prices rose more than expected in Mar. European gov bonds edged lower & the single currency rose after somewhat hawkish remarks by a ECB official. Meanwhile, political worries simmered in the background. Despite gains in technology stocks driving US equities higher on yesterday, the S&P 500 erased about 2/3 of its advance following news the FBI conducted a raid at the office of Trump's longtime lawyer. And Russian assets remain in focus in the wake of a fresh round of US sanctions. The ruble extended its decline, dropping to the weakest level since Dec 2016 & equities fluctuated before rising. The € rose with European sovereign bond yields after ECB Governing Council member Ewald Nowotny said that he “would have no problem” with raising rates under certain conditions.
Stocks Climb as China Seeks to Ease Tariff Tension: Markets Wrap
Sentiment among US small companies took a step back in Mar as a smaller share of owners said they expected business conditions to improve in coming months, a possible reflection of concerns about the economic impact from tariffs. Expansion plans & sales expectations also eased, pushing the index of small-business optimism to a 5-month low of 104.7, according to the National Federation of Independent Business (NFIB). In Feb, the group's gauge of sentiment advanced to 107.6, the 2nd-highest level in the survey’s 45-year history. While the NFIB doesn't explicitly ask respondents why they are more upbeat or less confident, 8 of the 10 components that make up the index declined in Mar. That may indicate tariffs on some imported steel & aluminum, along with heated rhetoric between US & Chinese officials over proposed trade actions, could be playing a role in tamping down sentiment. At the same time, the index remains near a record & the report contained some promising aspects about the economy. A measure of earnings trends was the 2nd-best since 1987 & a greater share of small-business owners reported higher average selling prices. The latter helps explain why Federal Reserve policy makers have been raising interest rates. Last week, the NFIB reported that a net 33% of small firms raised compensation during the month, the largest share since 2000, as hiring plans picked up.
The speech by Xi got a lot of attention & a warm reception around the world. But it's just a speech. Hard talks about trade issues lie ahead & they will last for some time. No quick solutions are seen. In addition, Zucherberg testifies before Congress today & that can produce tense times. Big tech companies have been making a lot of money. Now fresh eyes in Congress will be looking at tech companies & questions of privacy are coming. For the time being, Xi's speech is controlling the stock market.
Dow Jones Industrials
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