Dow shot up 147 (not far from the highs), advancers over decliners 5-4 & NAZ rose 59. The MLP index fell 1+ to the 281s & the REIT index was steady in the 359s. Junk bond funds were in demand & Treasuries continued about even. Oil dropped 1+, above session lows, more below & gold gave back 5 to 1205.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
HHS secretary says storm could be of 'historic proportions'
Ross: Hurricane won’t ‘move the needle’ US economy
As a major hurricane menaces the East Coast, Congress is moving to avert a legislative disaster that could lead to a partial gov shutdown just weeks before the Nov midterm elections. Senators approved a $147B package yesterday night to fund the Energy Dept, veterans' programs & the legislative branch. The bill is the first of 3 spending packages Congress hopes to approve this month to avoid a gov shutdown when the new budget year begins Oct 1. The measure, which represents a compromise between House & Senate negotiators, was approved 92-5. The House is set to vote on the package today. If all 3 compromise spending packages are approved by both chambers & signed by Pres Trump, they would account for nearly 90% of annual spending, including the military & most civilian agencies. Lawmakers would still need a short-term patch for a portion of the gov, including the Dept of Homeland Security, which oversees Trump's long-promised wall along the US-Mexico border. Approval of the initial spending bill was so important to Rep leaders that they moved up a vote planned for Thurs, citing the threat of Hurricane Florence bearing down on the Southeast coast. The bill represents a marked departure from recent years, when Congress has routinely ignored agency-specific spending measures in favor of giant “omnibus” packages that fund the entire gov all at once. Trump has said he won't sign another bloated bill & lawmakers have been working to approve a series of smaller spending measures.
Congress moving ahead on spending to avert shutdown
Oil prices fell, slipping back from 4-month highs as investors focused on the risk that emerging market crises & trade disputes could dent demand. Benchmark Brent crude was down 70¢ a barrel at $79.04 & US light crude fell $1.15 to a low of $69.22 a barrel. The Intl Energy Agency said today that although the oil market was tightening at the moment & world oil demand would soon reach 100M barrels per day (bpd), global economic risks were mounting. “Things are tightening up,” the agency said in its monthly report, but added: “As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the U.S. dollar raising the cost of imported energy.” “In addition, there is a risk to growth from an escalation of trade disputes,” the agency said. US companies in China are being hurt by tariffs in the growing trade war between DC & Beijing, prompting US business lobbies to urge the administration of Pres Trump to reconsider its approach. The White House has invited Chinese officials to restart trade talks just as it prepares to escalate a trade war with China with tariffs on $200B worth of Chinese goods. Short-term, the outlook is for tighter supply. Brent rose above $80 per barrel yesterday for the first time since May, spurred by expectations that US sanctions against Iran’s oil exports, which will start in Nov, will tighten global markets. US light crude pushed over $70 yesterday due to falling US crude inventories & production levels. The IEA said tightening supply was putting increasing pressure on prices: “The price range for Brent of $70-$80 per barrel in place since April could be tested,” it said. US crude stocks fell 5.3M barrels in the latest week to 396.2M barrels, the lowest since Feb 2015 & about 3% below the 5-year average for this time of year, the Energy Information Administration (EIA) said. US crude oil production fell by 100K bpd, to 10.9M bpd, as the industry faces pipeline capacity constraints.
Oil slips as economic concerns counter tighter supply
The inflation news was welcome news for traders & they are bidding up stocks. Also, trade talks may be percolating. The Dow is back over 26K, about 500 below the Jan record high. NAZ bounced back, going over 8K. The storm news is being taken in stride. The bulls are back, but this remains a time to be cautious with the storm out there & stumbling trade talks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Dept of Health & Human Services
(HHS) has declared a public health emergency for North & South
Carolina ahead of Hurricane Florence. Though
Florence was downgraded to Category 2 storm, it is expected to produce
catastrophic rainfall & flooding, life-threatening storm surge &
destructive winds. More than 10M people are in Florence's path. “This
hurricane is a very serious event,” HHS Secretary Alex Azar said. “It could be a storm of historic
proportions and people need to follow the directions of state and local
authorities and evacuating and taking care of preparedness.” HHS is “actively working” under Pres Trump's leadership with FEMA to ensure safety in the Carolinas. “We
are prepared,” Azar said. “We’ve already advance-placed our resources.
We’ve got Health and Human Services people in the field. We are in
communication with each of the governors and we are here to assist with
response and recovery as the hurricane comes on shore.” There are very high public health risks that can
occur in the aftermath of the storm, he said, but HHS is also concerned
about the well-being of seniors & patients in hospitals that could
lose power. Because of this, HHS has developed emPOWER Map 3.0 to
help people dependent on electric medical equipment. According to the
website, the tool “gives every public health official, emergency
manager, hospital, first responder, electric company, and community
member the power to discover the electricity-dependent Medicare
population in their state, territory, county, and ZIP Code.” “We
use our Medicare claims information,” he said. “We know every patient
that is dependent on electricity for their health care and we make that
available to the states and they can target these people and go find
them and get them relocated.”
HHS secretary says storm could be of 'historic proportions'
As Ms of Carolinians flee from their homes
while Hurricane Florence barrels closer to the region's coast, some in
the Trump administration are beginning to worry about the economic
ramifications the life-threatening storm could have for the country. “Overall,
it’s not going to move the national economy,” Wilbur Ross, the Secretary of Commerce, said today while touring the National
Oceanic & Atmospheric Administration. “We have an $18 trillion
economy, so one percent of $18 trillion would be $180 billion. That’s a
pretty big number.” But, Ross said it could
have “a lot of implications” for some vulnerable sectors of the economy,
including shipping & agriculture. He said
the massive Category 2 hurricane, whose rains already began lashing
North Carolina, could hinder the shipping industry,
affecting imports & exports because vessels will likely remain on the
water longer, thus raising transportation costs. Hundreds of ships are already marooned offshore, delaying the time it takes getting goods to ports & businesses. “Now,
since we import more than we export, probably that’ll be a little bit
of a help to the economy,” Ross said. “But, it will slow down shipping.” Agriculture will also be hit particularly hard, Ross added, since people will be unable to conduct business. Hog & pig farmers in North Carolina were scrambling to figure out what to do with their
livestock earlier this week. The state produces about 1/8 of the
country's hog & pigs.
Ross: Hurricane won’t ‘move the needle’ US economy
ECB Pres Mario Draghi says
that trade conflicts are "the major source of uncertainty" for the
global economy. Draghi says increased tariffs
coming about as part of a trade war could affect the economy by
affecting business confidence & today's complex value chains between
companies across borders. Pres Trump has imposed new
tariffs on some Chinese imports & on global imports of steel &
aluminum. A threat to impose new tariffs on autos has been put on hold. Draghi
spoke after the ECB confirmed plans to phase out its monthly
bond purchases by year end. The monetary authority for the eurozone left
key interest rates unchanged at record lows & says it plans no
increases till well into next year. The ECB has trimmed its economic growth outlook for this year & next. Draghi said that the bank's
staff growth projections had been trimmed to 2.0% from 2.1% for this year & to 1.8% from 1.9% for 2019. He said that somewhat weaker demand from outside the eurozone was behind the slightly weaker output & added that nonetheless the 19-country eurozone was enjoying an "ongoing, broad-based expansion." He
spoke after the ECB confirmed its plan to reduce its bond purchase
stimulus to €15B ($17.4B) per month from €30B & to phase the program out at year-end. The monetary authority
for the eurozone left interest rates unchanged at record lows.
The Latest: European Central Bank sees tariffs as key risk
As a major hurricane menaces the East Coast, Congress is moving to avert a legislative disaster that could lead to a partial gov shutdown just weeks before the Nov midterm elections. Senators approved a $147B package yesterday night to fund the Energy Dept, veterans' programs & the legislative branch. The bill is the first of 3 spending packages Congress hopes to approve this month to avoid a gov shutdown when the new budget year begins Oct 1. The measure, which represents a compromise between House & Senate negotiators, was approved 92-5. The House is set to vote on the package today. If all 3 compromise spending packages are approved by both chambers & signed by Pres Trump, they would account for nearly 90% of annual spending, including the military & most civilian agencies. Lawmakers would still need a short-term patch for a portion of the gov, including the Dept of Homeland Security, which oversees Trump's long-promised wall along the US-Mexico border. Approval of the initial spending bill was so important to Rep leaders that they moved up a vote planned for Thurs, citing the threat of Hurricane Florence bearing down on the Southeast coast. The bill represents a marked departure from recent years, when Congress has routinely ignored agency-specific spending measures in favor of giant “omnibus” packages that fund the entire gov all at once. Trump has said he won't sign another bloated bill & lawmakers have been working to approve a series of smaller spending measures.
Congress moving ahead on spending to avert shutdown
Oil prices fell, slipping back from 4-month highs as investors focused on the risk that emerging market crises & trade disputes could dent demand. Benchmark Brent crude was down 70¢ a barrel at $79.04 & US light crude fell $1.15 to a low of $69.22 a barrel. The Intl Energy Agency said today that although the oil market was tightening at the moment & world oil demand would soon reach 100M barrels per day (bpd), global economic risks were mounting. “Things are tightening up,” the agency said in its monthly report, but added: “As we move into 2019, a possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the U.S. dollar raising the cost of imported energy.” “In addition, there is a risk to growth from an escalation of trade disputes,” the agency said. US companies in China are being hurt by tariffs in the growing trade war between DC & Beijing, prompting US business lobbies to urge the administration of Pres Trump to reconsider its approach. The White House has invited Chinese officials to restart trade talks just as it prepares to escalate a trade war with China with tariffs on $200B worth of Chinese goods. Short-term, the outlook is for tighter supply. Brent rose above $80 per barrel yesterday for the first time since May, spurred by expectations that US sanctions against Iran’s oil exports, which will start in Nov, will tighten global markets. US light crude pushed over $70 yesterday due to falling US crude inventories & production levels. The IEA said tightening supply was putting increasing pressure on prices: “The price range for Brent of $70-$80 per barrel in place since April could be tested,” it said. US crude stocks fell 5.3M barrels in the latest week to 396.2M barrels, the lowest since Feb 2015 & about 3% below the 5-year average for this time of year, the Energy Information Administration (EIA) said. US crude oil production fell by 100K bpd, to 10.9M bpd, as the industry faces pipeline capacity constraints.
Oil slips as economic concerns counter tighter supply
The inflation news was welcome news for traders & they are bidding up stocks. Also, trade talks may be percolating. The Dow is back over 26K, about 500 below the Jan record high. NAZ bounced back, going over 8K. The storm news is being taken in stride. The bulls are back, but this remains a time to be cautious with the storm out there & stumbling trade talks.
Dow Jones Industrials
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