Dow went up 90, advancers over decliners 3-2 & NAZ gained 48. The MLP index fell 1+ to the 281s & the REIT index was even in the 359s. Junk bond funds rose & Treasuries were steady. Oil dropped 2 to the 68s & gold lost 1 to 1209.
AMJ (Alerian MLP Index tracking fund)
Stocks gain on trade talk hopes
The House Ways & Means Committee is expected today to begin considering 3 bills that Reps have dubbed Tax Reform 2.0. In addition to making the recently reduced tax rates for individuals permanent, the legislative package would expand tax-advantaged savings accounts, including for retirement & education. A Ways & Means spokesperson said that the bills under consideration should get committee approval this week & House Speaker Paul Ryan has said publicly that he wants a floor vote by the end of the month. However, even if the legislation passes in the Rep-controlled House, it's expected to stall after that, with the Senate unlikely to take it up until after the midterm elections — if at all. In addition to a lack of Dem support, which would be needed to clear the 60-vote hurdle for the bills to pass in the Senate, there's been lackluster public backing for the already-passed tax cuts that took effect this year. A poll released last month shows that 37% of the public approve, while 45% disapprove. One of the new legislative package's biggest sticking points is its price tag: an estimated $627B over the next decade, on top of the $1.5T the already-passed tax cuts are projected to cost over the next decade. Additionally, one of the measures would make permanent the controversial $10K cap on the deduction for state & local income taxes. Some Rep lawmakers from high-tax states such as NY & NJ oppose the "SALT" limit & have said they won't support extending it. Even if the tax-reform 2.0 bills end up shelved this year, they could be revived next year when a new Congress is in place or at another time in the future, depending on the balance of power.
House GOP plows ahead with tax-cut bills despite facing uphill battle
US weekly jobless claims drop to near 49-year low
US consumer prices increase less than expected in August
Stocks recovered in what has been a flattish month. Even tech shares which have been out of favor recently are finding buyers. Hope springs eternal on prospects for trade talks, but a lot of work still needs to be done. Talks with Canada are stuck in the mud & China relations are very challenging. However the Dow is back above 26K (see below) & other averages are near record levels as economy data continues to be encouraging.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 69.39 | -0.98 | -1.4% |
| GC=F | Gold | 1,216.60 | +5.70 | +0.5% |
Stocks gained following the latest
positive economic data while hopes that trade talks with China may get
going added support. Economic data released
included weekly jobless claims, which stayed at a 49-year low, & consumer price inflation, which tapered to an annual clip of 2.7% from 2.9%. Pres Trump's chief economic adviser Larry
Kudlow confirmed that Treasury Secretary
Steve Mnuchin has proposed renewed trade talks with China. However, the
next round of talks on a trade agreement with Canada are on hold. A
meeting was reportedly expected to be held on today, but Canadian
Foreign Minister Chrystia Freeland went back to Canada to brief Prime
Minister Trudeau & says she is staying there & that officials needed
to do more work before she could hold fresh talks. All eyes are also on the Carolina coast as
Hurricane Florence remains on track to make landfall tomorrow. The force of the hurricane has been downgraded to a category 2 from a
category 4. Industries such as air travel, home improvement centers, generator makers & insurance companies may remain active. Stocks
were mostly flat yesterday, giving back some earlier gains that
followed a report that the US will reach out to China for
another round of trade talks. The Dow rose
27 to 25,998 & the S&P 500 gained 1 to close at 2888. The NAZ fell 18 (0.2%) to 7954.
Stocks gain on trade talk hopes
The House Ways & Means Committee is expected today to begin considering 3 bills that Reps have dubbed Tax Reform 2.0. In addition to making the recently reduced tax rates for individuals permanent, the legislative package would expand tax-advantaged savings accounts, including for retirement & education. A Ways & Means spokesperson said that the bills under consideration should get committee approval this week & House Speaker Paul Ryan has said publicly that he wants a floor vote by the end of the month. However, even if the legislation passes in the Rep-controlled House, it's expected to stall after that, with the Senate unlikely to take it up until after the midterm elections — if at all. In addition to a lack of Dem support, which would be needed to clear the 60-vote hurdle for the bills to pass in the Senate, there's been lackluster public backing for the already-passed tax cuts that took effect this year. A poll released last month shows that 37% of the public approve, while 45% disapprove. One of the new legislative package's biggest sticking points is its price tag: an estimated $627B over the next decade, on top of the $1.5T the already-passed tax cuts are projected to cost over the next decade. Additionally, one of the measures would make permanent the controversial $10K cap on the deduction for state & local income taxes. Some Rep lawmakers from high-tax states such as NY & NJ oppose the "SALT" limit & have said they won't support extending it. Even if the tax-reform 2.0 bills end up shelved this year, they could be revived next year when a new Congress is in place or at another time in the future, depending on the balance of power.
House GOP plows ahead with tax-cut bills despite facing uphill battle
The number of Americans filing for unemployment
benefits unexpectedly fell last week, hitting its lowest level in nearly
49 years & pointing to robust labor market conditions. Initial claims for state unemployment
benefits slipped 1K to a seasonally adjusted 204K for the latest week, the lowest level since 1969, the Labor
Dept said. The forecast called for claims rising to 210K. The
claims data covered last Labor Day holiday & claims tend to be
volatile around public holidays. The 4-week moving average
of initial claims, considered a better measure of labor market trends as
it irons out week-to-week volatility, fell 2K last week to 208K,
also the lowest level since 1969. The labor market is
viewed as being near or at full employment. It continues to strengthen,
with nonfarm payrolls increasing by 201K jobs in Aug & annual
wage growth notching its biggest gain in more than 9 years. Job
openings hit an all-time high of 6.9M in Jul. The Federal Reserve's Beige Book report described the labor market as "tight throughout
the country, with most districts reporting widespread shortages." Though there have been
reports of some companies either planning job cuts or laying off workers
because of trade tensions between the US & its major trade
partners, they have been partially offset by increased hiring in the
steel industry. Economists, however, warn
of widespread job losses if the Trump administration presses ahead with
tariffs on nearly all Chinese imports. The claims report
also showed the number of people receiving benefits after an initial
week of aid dropped 15K to 1.70M for the latest week,
the lowest level since 1973. The 4-week moving average of continuing claims decreased 8K to 1.71M, the
lowest level since 1973.
US weekly jobless claims drop to near 49-year low
US consumer prices rose less than expected in
Aug as increases in gasoline & rents were offset by declines in
healthcare & apparel costs, and underlying inflation pressures also
appeared to be slowing. The Labor Dept said
its Consumer Price Index increased 0.2% last month after a
similar gain in Jul. In the 12 months thru Aug, the CPI increased
2.7%, slowing from Jul's 2.9% rise. Excluding the volatile
food & energy components, the CPI edged up 0.1%. Core CPI had increased by 0.2% for 3 straight months. In the
12 months thru Aug, the core CPI increased 2.2% after
rising 2.4% in Jul. An escalating trade war between the US & China is
expected to keep inflation high. Minutes of the central
bank's Jul 31-Aug 1 meeting showed "several
participants commented that increases in the prices of particular goods,
such as those induced by the tariff increases, would likely be one
source of short-term upward pressure on the inflation rate." Last month, gasoline
prices rebounded 3.0% after dropping 0.6% in Jul. Food
prices edged up 0.1%, matching the Jul rise while food consumed at home
was unchanged. The forecast called for the CPI climbing 0.3% & the core CPI gaining 0.2% in Aug. Despite the moderation in
price increases last month, inflation pressures are steadily building
up, driven by a tightening labor market & robust economic growth. The Federal Reserve
tracks a different inflation measure, the personal consumption
expenditures (PCE) price index excluding food & energy, for monetary
policy. The core PCE price index increased 2.0% in Jul, hitting
the central bank's 2% target for the 3rd time this year.
US consumer prices increase less than expected in August
Stocks recovered in what has been a flattish month. Even tech shares which have been out of favor recently are finding buyers. Hope springs eternal on prospects for trade talks, but a lot of work still needs to be done. Talks with Canada are stuck in the mud & China relations are very challenging. However the Dow is back above 26K (see below) & other averages are near record levels as economy data continues to be encouraging.
Dow Jones Industrials
No comments:
Post a Comment