Dow inched up 3, advancers ahead of decliners 5-2 & NAZ gained 41. The MLP index was even in the 262s & the REIT index rose 1+ to 359. Junk bond funds drifted lower & Treasuries were slightly higher. Oil climbed in the 73s & gold lost 1 to 1256.
AMJ (Alerian MLP Index tracking fund)
Stocks opened flat, but they reduced their earlier losses after a strong jobs report overshadowed tariffs. The US economy added 213K jobs in June with the unemployment rate rising to 4%. Wage growth remained steady at 2.7% even though hourly wages inched higher by 0.2%. The forecast called for the US economy to add 195K jobs in Jun with the unemployment rate holding steady at May's 3.8% (the lowest since 2000). China's customs authority, said China will levy tariffs on 545 items worth $34B in response to US tariffs, according to the China Daily newspaper. This comes after US tariffs went into effect at this AM.
Stocks open flat, trim losses following jobs report
The monthly trade deficit is at its lowest levels during the Trump presidency. The Commerce Dept revealed that the trade deficit, the gap between what the US exports & what it imports from foreign countries, was $43.1B for the month of May, down 6.6% from Apr. May exports rose by 1.9% from the previous month to $215.3B, while imports increased by 0.4% to $258.4B. The trade deficit is at its lowest level since Oct 2016, a month before the presidential election. It has also fallen for 3 consecutive months & is down year over year. The data release came on the same day the US & China started a trade war with both countries instituting tariffs on $34B worth of the other country's goods.
US trade deficit drops to smallest since before 2016 election
The war of higher tariffs between the US & China has begun. Traders are taking it all in with a sense of calm, partially because today's tariff hikes have been well advertised. The Dow chart below shows there has no major sell-off in recent months, investors are cautious about making new investments. That sense of caution will limit any market advance for months.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 72.67 | -0.27 | -0.4% |
| GC=F | Gold | 1,256.60 | -2.20 | -0.2% |
The US economy added a higher-than-expected number of jobs in Jun, with 213K positions created versus expectations for 195K. The
unemployment rate moved higher, off an 18-year low, to 4% from May's
3.8%. The slight move higher is a positive as it reflects
more workers entering the workforce after sitting on the sidelines,
drawn by the plethora of jobs. In Jun, 601K Americans entered the
labor force & not all found jobs. This trend comes as companies are bemoaning the lack of available labor. The forecast called for the unemployment rate to
hold steady at May's 3.8%, the lowest since 2000. The Jun labor force participation rate came in at 62.9%. May & June jobs additions were
upwardly revised by a net 37K. Thru H1
employers added an average of 215K workers to payrolls each month.
Last year, the average monthly jobs growth was 182K.
American employers created an unexpectedly high number of jobs in June
Stocks opened flat, but they reduced their earlier losses after a strong jobs report overshadowed tariffs. The US economy added 213K jobs in June with the unemployment rate rising to 4%. Wage growth remained steady at 2.7% even though hourly wages inched higher by 0.2%. The forecast called for the US economy to add 195K jobs in Jun with the unemployment rate holding steady at May's 3.8% (the lowest since 2000). China's customs authority, said China will levy tariffs on 545 items worth $34B in response to US tariffs, according to the China Daily newspaper. This comes after US tariffs went into effect at this AM.
Stocks open flat, trim losses following jobs report
When the clock stuck midnight, US tariffs on $34B in Chinese imports took effect. Beijing vowed to respond immediately in kind, the 2 biggest economies are on a collision course for a full-blown trade war. China's
customs authority said China will levy tariffs on 545 items worth $34B in response to US tariffs, according to the China Daily
newspaper. China has said it would respond with
tariffs on hundreds of US goods, including top exports such as
soybeans, sorghum & cotton, threatening US farmers in states that
backed Trump in the 2016 election, such as Texas & Iowa. Earlier on Fri, China's state media reportedly
lashed out at Pres Trump, accusing the White House of behaving
like a "gang of hoodlums" as the deadline approached. Trump
has warned that the US may ultimately target over $500B worth of Chinese goods, roughly the total amount that the
US imported from China last year. Asian
markets have taken a beating as threats heated up. Chinese shares
slipped further from early deals & pulled Asian markets down, while
the yuan currency also weakened. Yesterday,
Ford (F) said that for now, it will not hike prices of imported Ford & higher-margin luxury Lincoln models in China. A
China central bank adviser said the planned US import tariffs on $50B worth of Chinese goods, $34B plus a planned follow-on
list worth $16B, will cut China's economic growth by 0.2
percentage points, according to the official Xinhua news agency. US
Customs & Border Protection officials are due to collect 25%
duties on a range of products including motor vehicles, computer disk
drives, parts of pumps, valves & printers along with many other industrial
components. The list avoids direct tariffs on consumer goods such as cellphones & footwear.
China retalites against US tariffs with itariffs against American goods
The monthly trade deficit is at its lowest levels during the Trump presidency. The Commerce Dept revealed that the trade deficit, the gap between what the US exports & what it imports from foreign countries, was $43.1B for the month of May, down 6.6% from Apr. May exports rose by 1.9% from the previous month to $215.3B, while imports increased by 0.4% to $258.4B. The trade deficit is at its lowest level since Oct 2016, a month before the presidential election. It has also fallen for 3 consecutive months & is down year over year. The data release came on the same day the US & China started a trade war with both countries instituting tariffs on $34B worth of the other country's goods.
US trade deficit drops to smallest since before 2016 election
The war of higher tariffs between the US & China has begun. Traders are taking it all in with a sense of calm, partially because today's tariff hikes have been well advertised. The Dow chart below shows there has no major sell-off in recent months, investors are cautious about making new investments. That sense of caution will limit any market advance for months.
Dow Jones Industrials
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