Dow sank 178 finishing near the lows, decliners over advancers 3-2 & NAZ lost 15. The MLP index was flattish in the 269s & the REIT index continued at 331. Junk bond funds did little & Treasuries remained steady with the 10 year Treasury holding at 3.07%. Oil slid back pennies in the 72s following recent strength & gold was flat.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.06815945443311178)
Pres Trump may be trying to level the playing field when it comes to trade between the US & China, but not every American company has a complaint to file against Beijing. When it comes to working out of China, Cisco (CSCO & a Dow stock) CEO Chuck Robbins described an environment that treats the US tech giant fairly & offers “pretty good access.” “I can only speak from our perspective, and actually, we’ve had pretty good access to the country,” he said. “We’ve had no real issues, relative to the [intellectual property] theft in the early 2000s.” After days of negotiations, the US & China announced on today that Beijing would dramatically reduce its tariffs on imported American vehicles & auto parts from 25% to 15%. The 2 economic powerhouses also reportedly had agreed to a broad outline to settle a dispute over Chinese telecom giant ZTE. Trump has been insistent about reducing the trade deficit, which the White House has blamed for the loss of Ms of US jobs, between the 2 countries & has taken aim at China's practice of intellectual property theft. The US Trade Representative found that Chinese theft of American IP costs at $225-600B annually. But Robbins said those type of issues haven't plagued CSCO in years. “In general, we’ve been treated fairly in China, actually,” he said. “We’ve not had any pressure for technology transfer or anything like that. I can’t speak for others, but that’s been our experience.” The stock fell 10¢.
If you would like to learn more about CSCO, click on this link:
club.ino.com/trend/analysis/stock/CSCO?a_aid=CD3289&a_bid=6ae5b6f7
OPEC may decide to raise oil output as soon as Jun due to worries over Iranian & Venezuelan supply & after DC raised concerns the oil rally was going too far, according to sources. Gulf OPEC countries are leading the initial talks on when the exporting group can boost oil production to cool the oil market after crude rose above $80 a barrel last week & how many barrels each member can add. OPEC & non-OPEC producers led by Russia have agreed to curb output by 1.8M barrels per day (bpd) until the end of 2018 to reduce high global oil stocks, but the inventory overhang has now fallen close to OPEC's target. "All options are on the table," one Gulf oil source told Reuters, adding that a decision to raise output might be taken in Jun when OPEC next meets to decide on its output policy, but there is no certain number yet by how much the group would need to ease its oil supply curbs. OPEC & its non-OPEC allies may opt to relax record high compliance with the supply curb agreement, another source said. OPEC's compliance with the deal reached an unprecedented 166% in Apr, meaning it has cut well above its target. "We are still studying the different scenarios," the 2nd source said, adding that even if OPEC decided to ease the output restrictions in Jun it may take 3-4 months to put into effect. "That is one of the options," an OPEC source said (referring to adding more supply at the Jun meeting). Falling Venezuelan output due to an economic crisis has helped OPEC & its allies deliver a bigger cut than intended. Saudi Energy Minister Khalid al-Falih is set to meet his counterparts from Russia & the UAE, which holds the OPEC presidency in 2018, this week to discuss this issue. So far, OPEC has said it sees no need to ease output restrictions despite a fall in global stocks to the groups desired levels & concerns among consuming nations that the price rally could undermine demand. But the sources said that the quick decline in global oil inventories & worries about the impact on oil supplies after the US decision to withdraw from the intl nuclear deal with Iran, as well as Venezuela's collapsing oil output, were behind the change in OPEC's thinking.
OPEC may decide to ease oil supply curbs in June, sources say
Pres Trump said that there's a "substantial" chance that his summit with North Korean leader Kim Jong UN "may not work out" for Jun. Trump made the remark while he met with Moon Jar-in, South Korea's pres, for pivotal discussions ahead of the Trump's planned meeting with the North Korean dictator. "Whether or not it happens, you'll be knowing pretty soon," Trump said. He also declined to say whether he has spoken with North Korea's leader. The summit is scheduled for Jun 12 in Singapore, widely viewed as a neutral site. Yet doubts continue to grow about whether the meeting will actually take place. Trump's remarks today were the strongest indication yet that the summit might not happen as planned. Last week, North Korea said it would reconsider whether to hold the meeting after abruptly canceling talks with South Korea amid joint military drills with the US on the Korean Peninsula. The communist dictatorship also took issue with Trump's national security advisor, John Bolton, who suggested using a denuclearizarion model similar to one used with Libya. That nation's dictator at the time, Moammar Gadhafi, agreed to give up nuclear weapons in exchange for relaxed US sanctions. Eventually, however, the US supported a violent overthrow of Gadhafi. North Korea called any attempt to impose a Libya-style arrangement on the country "awfully sinister." Trump has said, though, that the "Libyan model isn't a model that we have at all." Trump also suggested that Kim soured on the idea of a potential summit after the North Korean leader had a 2nd secret meeting with Chinese Pres Xi Jinping. "There was a somewhat different attitude after that meeting," the US pres said of Kim. "I can't say that I'm happy about it." The South Korean pres struck a more optimistic note about the planned summit between Trump & Kim. Moon pushed back against US skepticism about the meeting & said he is confident that Trump will make the summit a success. In his remarks, Trump did say that he believes Kim is "absolutely very serious" about denuclearization. The Trump administration has made it clear that it wants North Korea to give up its nuclear weapons program. Trump also made some promises to the North Korean leader. "He will be safe, he will be happy, his country will be rich," Trump said. "Kim will be extremely happy if it works out." The pres added the meeting won't happen if certain conditions aren't met. He also said a summit could happen further down the road if it doesn't occur next month as planned.
AMJ (Alerian MLP Index tracking fund)
Pres Trump said the US
has not yet reached an agreement to save Chinese telecom giant ZTE,
though the 2 nations are “discussing deals.” “We
can do a 301, where we don’t need China,” Trump told reporters during a
meeting with South Korean Pres Moon Jae-in at the White House, adding that the US could fine ZTE $1.3B. “We can just
say, ‘Look, this is what we want, this is what we think is fair.’ That’s
always a possibility if a negotiated deal doesn’t work out.” The comment contradicts an earlier report that
said DC & Beijing had agreed to a broad outline of a deal. If
reached, the administration would lift the ban on US businesses from
selling supplies to ZTE, a punishment it enacted after the company was
found to have violated restrictions on US exports. In
return, the telecom giant would have to make changes to its management,
board seats & could face steep fines. China also offered to scale
back $B of US farm tariffs as part of the deal. Trump instructed the Commerce Dept
earlier this month to assist ZTE in getting “back into business, fast,”
saying the penalty imposed on the company hurts US businesses. The
decision to help China, in the midst of a potential trade war, sparked
criticism from lawmakers. Sen Marco Rubio, said
Beijing was able to reach a deal on ZTE “without giving up anything
meaningful,” adding that China was “out-negotiating” the Trump
administration when it came to trade. Trump also said he wasn't pleased with the way
trade talks are going with the world's 2nd-largest economy, despite
tweeting yesterday that China agreed to buy “massive amounts” of farm &
agricultural products from the US. “We have a long way to go, but I want it to go fairly quickly,” Trump said. Negotiators
from the US & China announced Sat that they had created a
framework for addressing trade imbalances, which included Beijing
agreeing to purchase more American-made goods.
Trump says no deal with China on ZTE ... just yet
Pres Trump may be trying to level the playing field when it comes to trade between the US & China, but not every American company has a complaint to file against Beijing. When it comes to working out of China, Cisco (CSCO & a Dow stock) CEO Chuck Robbins described an environment that treats the US tech giant fairly & offers “pretty good access.” “I can only speak from our perspective, and actually, we’ve had pretty good access to the country,” he said. “We’ve had no real issues, relative to the [intellectual property] theft in the early 2000s.” After days of negotiations, the US & China announced on today that Beijing would dramatically reduce its tariffs on imported American vehicles & auto parts from 25% to 15%. The 2 economic powerhouses also reportedly had agreed to a broad outline to settle a dispute over Chinese telecom giant ZTE. Trump has been insistent about reducing the trade deficit, which the White House has blamed for the loss of Ms of US jobs, between the 2 countries & has taken aim at China's practice of intellectual property theft. The US Trade Representative found that Chinese theft of American IP costs at $225-600B annually. But Robbins said those type of issues haven't plagued CSCO in years. “In general, we’ve been treated fairly in China, actually,” he said. “We’ve not had any pressure for technology transfer or anything like that. I can’t speak for others, but that’s been our experience.” The stock fell 10¢.
club.ino.com/trend/analysis/stock/CSCO?a_aid=CD3289&a_bid=6ae5b6f7
Cisco CEO describes ‘fair treatment’ by China
OPEC may decide to raise oil output as soon as Jun due to worries over Iranian & Venezuelan supply & after DC raised concerns the oil rally was going too far, according to sources. Gulf OPEC countries are leading the initial talks on when the exporting group can boost oil production to cool the oil market after crude rose above $80 a barrel last week & how many barrels each member can add. OPEC & non-OPEC producers led by Russia have agreed to curb output by 1.8M barrels per day (bpd) until the end of 2018 to reduce high global oil stocks, but the inventory overhang has now fallen close to OPEC's target. "All options are on the table," one Gulf oil source told Reuters, adding that a decision to raise output might be taken in Jun when OPEC next meets to decide on its output policy, but there is no certain number yet by how much the group would need to ease its oil supply curbs. OPEC & its non-OPEC allies may opt to relax record high compliance with the supply curb agreement, another source said. OPEC's compliance with the deal reached an unprecedented 166% in Apr, meaning it has cut well above its target. "We are still studying the different scenarios," the 2nd source said, adding that even if OPEC decided to ease the output restrictions in Jun it may take 3-4 months to put into effect. "That is one of the options," an OPEC source said (referring to adding more supply at the Jun meeting). Falling Venezuelan output due to an economic crisis has helped OPEC & its allies deliver a bigger cut than intended. Saudi Energy Minister Khalid al-Falih is set to meet his counterparts from Russia & the UAE, which holds the OPEC presidency in 2018, this week to discuss this issue. So far, OPEC has said it sees no need to ease output restrictions despite a fall in global stocks to the groups desired levels & concerns among consuming nations that the price rally could undermine demand. But the sources said that the quick decline in global oil inventories & worries about the impact on oil supplies after the US decision to withdraw from the intl nuclear deal with Iran, as well as Venezuela's collapsing oil output, were behind the change in OPEC's thinking.
OPEC may decide to ease oil supply curbs in June, sources say
Pres Trump said that there's a "substantial" chance that his summit with North Korean leader Kim Jong UN "may not work out" for Jun. Trump made the remark while he met with Moon Jar-in, South Korea's pres, for pivotal discussions ahead of the Trump's planned meeting with the North Korean dictator. "Whether or not it happens, you'll be knowing pretty soon," Trump said. He also declined to say whether he has spoken with North Korea's leader. The summit is scheduled for Jun 12 in Singapore, widely viewed as a neutral site. Yet doubts continue to grow about whether the meeting will actually take place. Trump's remarks today were the strongest indication yet that the summit might not happen as planned. Last week, North Korea said it would reconsider whether to hold the meeting after abruptly canceling talks with South Korea amid joint military drills with the US on the Korean Peninsula. The communist dictatorship also took issue with Trump's national security advisor, John Bolton, who suggested using a denuclearizarion model similar to one used with Libya. That nation's dictator at the time, Moammar Gadhafi, agreed to give up nuclear weapons in exchange for relaxed US sanctions. Eventually, however, the US supported a violent overthrow of Gadhafi. North Korea called any attempt to impose a Libya-style arrangement on the country "awfully sinister." Trump has said, though, that the "Libyan model isn't a model that we have at all." Trump also suggested that Kim soured on the idea of a potential summit after the North Korean leader had a 2nd secret meeting with Chinese Pres Xi Jinping. "There was a somewhat different attitude after that meeting," the US pres said of Kim. "I can't say that I'm happy about it." The South Korean pres struck a more optimistic note about the planned summit between Trump & Kim. Moon pushed back against US skepticism about the meeting & said he is confident that Trump will make the summit a success. In his remarks, Trump did say that he believes Kim is "absolutely very serious" about denuclearization. The Trump administration has made it clear that it wants North Korea to give up its nuclear weapons program. Trump also made some promises to the North Korean leader. "He will be safe, he will be happy, his country will be rich," Trump said. "Kim will be extremely happy if it works out." The pres added the meeting won't happen if certain conditions aren't met. He also said a summit could happen further down the road if it doesn't occur next month as planned.
Trump says his summit with North Korea leader Kim Jong Un might not happen in June
Treasury Sec Steve Mnuchin said that US tariffs on Chinese steel & aluminum imports will stay in place even as the Trump administration suspends separate proposed tariffs on Chinese goods. The framework of a deal that emerged from trade talks in DC last week only involves holding off on up to $150B in potential tariffs on technology & other products, Mnuchin said. "As it relates to China, the steel and aluminium tariffs will remain enforced," he added. "Those were not part of our discussions. We were merely focused on the proposed $150 billion." "Those are not being touched," he continued. Mnuchin emerged from the talks saying DC & Beijing had put a potential trade war "on hold," although top Trump administration officials have given few concrete details about a final trade pact. The world's 2 largest economies are holding talks as they try to avoid a potentially damaging escalation in tariffs. Pres Trump has long pledged to crack down on alleged trade abuses by foreign countries & he has consistently placed China at the top of his target list. But the administration appears to be separating steel & aluminum tariffs from other measures specific to China. Trump has specifically targeted alleged intellectual property theft by Chinese companies & China's massive trade surplus with the US.
Treasury Secretary Mnuchin says steel and aluminum tariffs on China will stay in place
There is no shortage of drama in DC (& elsewhere) about the future of trade negotiations. All that talk which is followed by more talk. Talk, talk, talk! But the prospects are for little to be decided over the short term. Now growing uncertainty about the possible North Korea negotiations is giving traders one more worry to deal with. The Dow can not get far away from the 24K trend line it has been stuck to for months even though the US economy is doing well. Where were the bulls today?
Dow Jones Industrials
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