Dow added 27, advancers over decliners about 5-4 & NAZ went up 52. The MLP index rose 1+ to 271 & te REIT index bounced back 1+ to the 341s. Junk bond funds did little & Treasuries were purchased, taking the yield on the 10 year Treasury down to 2.95%. Oil climbed in the 66s & gold gained 5 to 1306.
AMJ (Alerian MLP Index tracking fund)
Stocks cautiously higher following rate hike, economic data
China's gov renewed its threat to scrap deals with DC aimed at defusing a sprawling trade dispute as the White House prepared to release a list of Chinese goods targeted for tariff hikes. Pres Trump has threatened to raise tariffs on up to $150B of Chinese goods in response to complaints about Beijing's trade surplus & technology policy. As part of that, the White House is due to issue a list tomorrow of $50B of Chinese goods targeted for a 25% tariff. Beijing has promised to buy more American soybeans, natural gas & other exports but warned after Jun 3 talks between Commerce Secretary Wilbur Ross & China's top economic official, Vice Premier Liu He, that all deals were off if Trump's threatened tariffs went ahead. "We made clear that if the U.S. rolls out trade sanction including the imposition of tariffs, all outcomes reached by the two sides in terms of trade and economy will not come into effect," said a foreign ministry spokesman, Geng Shuang. "I just want to repeat this point today." Beijing also has announced plans to cut import duties on autos & some consumer goods & to ease limits on foreign ownership in auto manufacturing, insurance & some other industries, though those don't directly address US complaints. Economists also warn that Beijing will resist changing technology development policies DC dislikes but that Chinese leaders see as successful. The first round of tariff hikes planned by DC is in response to complaints Beijing steals or pressures foreign companies to hand over technology in violation of its World Trade Organization market-opening commitments. China also has threatened to retaliate with its own tariff hikes on $50B of US exports including pork & soybeans, though authorities avoided renewing that threat following the latest round of talks. Today, a Commerce Ministry spokesman said some Chinese exporters are rushing to fill orders due to concern about possible trade risks. The spokesman didn't mention DC & Trump's threat of tariff hikes. "A few companies have increased the number of 'short orders' to avoid risks," Gao Feng said at a regular briefing. "However, this is not the mainstream and will not affect our country's situation of steady and healthy development of foreign trade."
China threatens to scrap US trade deals if the White House hikes tariffs on Chinese goods
Economic continues to be strong & projections for Q2 GDP make for good reading. But trade talks are stumbling at best. That can not be forgotten when looking at the stock market. The Dow has been above 25K for more than a week, digesting its run in early Jun. The test for the bulls is to extend this rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 66.96 | +0.32 | +0.5% |
| GC=F | Gold | 1,307.50 | +6.20 | +0.5% |
Stocks moved higher, following the latest batch of economic data and the Fed's decision to hike interest rates. Yesterday, the Federal Reserve moved, as expected, increasing interest rates by 25 basis points. While
the hike was anticipated, the Fed is now looking for a total of 4
rate hikes in 2018 instead of 3. Including in the hike, the Fed
has increased short-term rates 2 times in 2018. The ECB moved as expected to
maintain interest rates & the central bank said it expects to end its
bond-buying program in Dec. Stateside,
there was a barrage of economic data being released today, including
US retail sales, which increased by 0.8% in May; import prices, which
jumped 0.6% in May & weekly jobless claims – which dropped by 4K
to 218K while the 4-week average of claims fell 1K to
224K. Commodities were mostly higher.
Stocks cautiously higher following rate hike, economic data
US retail sales increased more than expected in
May as consumers bought motor vehicle & a range of other goods even as
they paid more for gasoline, the latest indication of an acceleration
in economic growth in Q2. The
Commerce Dept said retail sales jumped 0.8%
last month, the biggest advance since Nov 2017. Data for Apr was
revised up to show sales rising 0.4% instead of the previously
reported 0.2% gain. The forecast called for retail sales rising 0.4% in
May. Retail sales in May increased 5.9% from a year ago. Excluding
automobiles, gasoline, building materials & food
services, retail sales increased 0.5% last month after an
upwardly revised 0.6% increase in Apr. These coreretail sales correspond most closely with the consumer spending
component of GDP. They were previously reported to
have risen 0.5% in Apr. The strong retail sales report added to data
ranging from the labor market to manufacturing & trade in suggesting
the economy was regaining momentum in the second quarter after growth
slowed at the start of the year amid a sharp step-down in consumer
spending. Growth estimates for Q2 are as high as a 4.6% annualized rate after the economy grew
at a 2.2% rate in Q1. In
May, auto sales rose 0.5% after gaining 0.2% in Apr. Receipts at service stations surged 2.0%, reflecting higher
gasoline prices. Prices at the pump have risen by 15.5% this
year, according to Energy Information Administration data.
Expensive gasoline, if sustained, could pull spending away from other
categories. Sales at building material stores
rebounded 2.4% last month after declining 0.8% in Apr. Receipts at clothing stores surged 1.3%, the largest gain since
Mar 2017. There were also increases in online retail sales, but
receipts at furniture stores fell 2.4%, the largest drop since
2013. Sales at restaurants & bars jumped 1.3 percent, the biggest gains in over a year.
US retail sales post biggest gain in 6 months
China's gov renewed its threat to scrap deals with DC aimed at defusing a sprawling trade dispute as the White House prepared to release a list of Chinese goods targeted for tariff hikes. Pres Trump has threatened to raise tariffs on up to $150B of Chinese goods in response to complaints about Beijing's trade surplus & technology policy. As part of that, the White House is due to issue a list tomorrow of $50B of Chinese goods targeted for a 25% tariff. Beijing has promised to buy more American soybeans, natural gas & other exports but warned after Jun 3 talks between Commerce Secretary Wilbur Ross & China's top economic official, Vice Premier Liu He, that all deals were off if Trump's threatened tariffs went ahead. "We made clear that if the U.S. rolls out trade sanction including the imposition of tariffs, all outcomes reached by the two sides in terms of trade and economy will not come into effect," said a foreign ministry spokesman, Geng Shuang. "I just want to repeat this point today." Beijing also has announced plans to cut import duties on autos & some consumer goods & to ease limits on foreign ownership in auto manufacturing, insurance & some other industries, though those don't directly address US complaints. Economists also warn that Beijing will resist changing technology development policies DC dislikes but that Chinese leaders see as successful. The first round of tariff hikes planned by DC is in response to complaints Beijing steals or pressures foreign companies to hand over technology in violation of its World Trade Organization market-opening commitments. China also has threatened to retaliate with its own tariff hikes on $50B of US exports including pork & soybeans, though authorities avoided renewing that threat following the latest round of talks. Today, a Commerce Ministry spokesman said some Chinese exporters are rushing to fill orders due to concern about possible trade risks. The spokesman didn't mention DC & Trump's threat of tariff hikes. "A few companies have increased the number of 'short orders' to avoid risks," Gao Feng said at a regular briefing. "However, this is not the mainstream and will not affect our country's situation of steady and healthy development of foreign trade."
China threatens to scrap US trade deals if the White House hikes tariffs on Chinese goods
Economic continues to be strong & projections for Q2 GDP make for good reading. But trade talks are stumbling at best. That can not be forgotten when looking at the stock market. The Dow has been above 25K for more than a week, digesting its run in early Jun. The test for the bulls is to extend this rally.
Dow Jones Industrials
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