Dow crawled up 18, advancers over decliners better than 4-3 & NAZ added 4. The MLP index rose 2+ to 275 & the REIT index was about even at 347. Junk bond funds did little & Treasuries were flat. Oil shot up over 73 (more below) & gold recovered 8 to 1196.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Stocks take a breather after tech fueled rally
House passes tax reform 2.0 to make cuts permanent
Pres Trump signed a spending bill that will avert a gov shutdown despite previously calling the measure "ridiculous" because it did not include funding for a wall along the southern border. A leakr saidthat Trump had signed the bill. There had been some doubts about whether the pres would sign the bill, raising the specter that funding for the gov would lapse as early as Mon. But Trump had tamped down on concerns from top Reps in recent weeks, pledging that he would "keep the government open." Trump had blasted the spending package, which will fund the depts of Defense, Labor, & Health & Human Services for a year, because it did not include money for his proposed border wall. In Jul, the pres brushed off the prospect of a shutdown. "If we don't get border security after many, many years of talk within the United States, I would have no problem doing a shutdown," Trump said at the time. The pres appeared to double down on his pledge to obtain border wall spending as recently as late Sep. "I want to know, where is the money for Border Security and the WALL in this ridiculous Spending Bill, and where will it come from after the Midterms," Trump wrote in a Sep 20 Twitter post.
Trump signs spending bill to avoid government shutdown, despite frustrations over border wall
Oil prices rose more than 1%, with Brent climbing to a fresh 4-year high, as US sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production. Brent crude futures rose $1 (1.2%) to $82.72. The session high of $82.87 was its highest since Nov 2014. In Q3, Brent has so far gained 4%. US light crude ended the session up $1.13 at $73.25 a barrel, a 1.6% gain. The session high of $73.73 was the highest since Jul 11. The contract is up almost 4.9% this month but down 1.2% for the qtr. DC is demanding that buyers of Iranian oil cut imports to zero to force Tehran to negotiate a new nuclear agreement & to curb its influence in the Middle East. China's Sinopec is halving loadings of crude oil from Iran this month, as the state refiner comes under intense pressure from DC, according to leakers. However, India, another top buyer, is committed to buying oil from Tehran, the Iranian foreign minister said. Other OPEC countries have been increasing production in recent months, but global inventories have been falling as supply tightens. Saudi Arabia is expected to add extra oil to the market over the next couple of months to offset the drop in Iranian production. Leakers said Saudi Arabia & other producers had discussed a possible production increase of about 500K barrels per day (bpd) among OPEC & non-OPEC producers. Others have said that major suppliers were unlikely to offset losses due to the sanctions estimated at 1.5M bpd. At its 2018 peak in May, Iran exported 2.7M bpd, nearly 3% of daily global crude consumption. Looking to 2019, Saudi Arabia is concerned rising US shale production could create another glut, especially if a stronger $ & weaker emerging market economies reduce global demand for oil. OPEC forecasts that its non-OPEC rivals led by the US will increase output by 2.4M bpd in 2019 while global oil demand should grow by just 1.5M bpd. US crude production rose 269K bpd to a record 10.964M bpd in Jul, the Energy Information Administration said in its monthly report.
Brent hits four-year high as US sanctions on Iran tighten supply
St Louis Fed Pres James Bullard said that a successfully renegotiated North American Free Trade Agreement would be a positive development for the US economy. He said a concrete deal would show that a "trade war does not have to go on indefinitely." Mexico & the US are about to start the process of pursuing formal approval of a Nafta deal from the US Congress. Canada is not part of the deal but still can join. Bullard was not optimistic on the trade fight with China. "It does seem China is digging in, I'm not sure we can reach a deal in a reasonable time frame," he said. Bullard repeated that he thinks the Fed should delay further interest rate increases. Market signals show investors are not worried about inflation, which should allow the Fed to let the economy run & watch inflation closely, he added. Only 4 of 16 senior Fed officials penciled in a pause in Dec, the rest expected another qtr-point move.
This was another quiet day in trading with little economic news to move stocks. The Dow was near break even for much of the day. But it had an excellent qtr, rising about 2.2K & reached record highs last week. The bulls are feeling good even with all the turmoil in DC & over intl trade.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Stocks were flat on the final trading day of the month & the qtr. Traders
were digesting the news of the week, which included the final revision
on Q2 GDP & the Federal Reserve's
decision to increase interest rates. The final Q2 GDP reading came in at 4.2%, matching estimates.
Durable goods orders climbed to a 6-month high in Aug. The Federal Reserve's preferred measure of inflation, the year-over-year
change in core personal consumption expenditures minus food & energy,
held steady at 2% in Aug, & is in line with the Fed's 2% inflation
target. A reading on consumer sentiment came in slightly below
expectations, but remained above 100. Stocks rose broadly yesterday as investors digested the Federal Reserve's
decision to raise interest rates & looked ahead to Q3
earnings season next month.
Stocks take a breather after tech fueled rally
Reps have sped legislation thru the
House to expand their massive new tax law, capping their session for the
year as they rush out of town to face voters in the Nov elections.
The new bill would make permanent the individual and small-business tax
cuts in the law. The vote was mostly
along party lines. Dems continued their solid opposition to
tax-cut legislation, asserting it favors corps & wealthy
individuals over middle-income Americans. It's the 2nd tax-cut proposal that Rep leaders have pushed in less than a year. “On top of making lower rates for individuals and
small businesses permanent, these bills create new savings options for
families to plan for education and retirement," House Speaker Paul Ryan
said. Prospects
for the legislation in the Senate are weak, given the slim Rep
majority & concern over the potential for further blowing up the
deficit. Pres Trump's historic tax reform plan, enacted late last year, has
been credited with reviving the US economy. Q2 GDP grew
4.2%, the strongest showing since 2014. Jobs are plentiful with US
unemployment falling to 3.9%. Additionally, US stocks are
sitting at record levels.
House passes tax reform 2.0 to make cuts permanent
Pres Trump signed a spending bill that will avert a gov shutdown despite previously calling the measure "ridiculous" because it did not include funding for a wall along the southern border. A leakr saidthat Trump had signed the bill. There had been some doubts about whether the pres would sign the bill, raising the specter that funding for the gov would lapse as early as Mon. But Trump had tamped down on concerns from top Reps in recent weeks, pledging that he would "keep the government open." Trump had blasted the spending package, which will fund the depts of Defense, Labor, & Health & Human Services for a year, because it did not include money for his proposed border wall. In Jul, the pres brushed off the prospect of a shutdown. "If we don't get border security after many, many years of talk within the United States, I would have no problem doing a shutdown," Trump said at the time. The pres appeared to double down on his pledge to obtain border wall spending as recently as late Sep. "I want to know, where is the money for Border Security and the WALL in this ridiculous Spending Bill, and where will it come from after the Midterms," Trump wrote in a Sep 20 Twitter post.
Trump signs spending bill to avoid government shutdown, despite frustrations over border wall
Oil prices rose more than 1%, with Brent climbing to a fresh 4-year high, as US sanctions on Tehran squeezed Iranian crude exports, tightening supply even as other key exporters increased production. Brent crude futures rose $1 (1.2%) to $82.72. The session high of $82.87 was its highest since Nov 2014. In Q3, Brent has so far gained 4%. US light crude ended the session up $1.13 at $73.25 a barrel, a 1.6% gain. The session high of $73.73 was the highest since Jul 11. The contract is up almost 4.9% this month but down 1.2% for the qtr. DC is demanding that buyers of Iranian oil cut imports to zero to force Tehran to negotiate a new nuclear agreement & to curb its influence in the Middle East. China's Sinopec is halving loadings of crude oil from Iran this month, as the state refiner comes under intense pressure from DC, according to leakers. However, India, another top buyer, is committed to buying oil from Tehran, the Iranian foreign minister said. Other OPEC countries have been increasing production in recent months, but global inventories have been falling as supply tightens. Saudi Arabia is expected to add extra oil to the market over the next couple of months to offset the drop in Iranian production. Leakers said Saudi Arabia & other producers had discussed a possible production increase of about 500K barrels per day (bpd) among OPEC & non-OPEC producers. Others have said that major suppliers were unlikely to offset losses due to the sanctions estimated at 1.5M bpd. At its 2018 peak in May, Iran exported 2.7M bpd, nearly 3% of daily global crude consumption. Looking to 2019, Saudi Arabia is concerned rising US shale production could create another glut, especially if a stronger $ & weaker emerging market economies reduce global demand for oil. OPEC forecasts that its non-OPEC rivals led by the US will increase output by 2.4M bpd in 2019 while global oil demand should grow by just 1.5M bpd. US crude production rose 269K bpd to a record 10.964M bpd in Jul, the Energy Information Administration said in its monthly report.
Brent hits four-year high as US sanctions on Iran tighten supply
St Louis Fed Pres James Bullard said that a successfully renegotiated North American Free Trade Agreement would be a positive development for the US economy. He said a concrete deal would show that a "trade war does not have to go on indefinitely." Mexico & the US are about to start the process of pursuing formal approval of a Nafta deal from the US Congress. Canada is not part of the deal but still can join. Bullard was not optimistic on the trade fight with China. "It does seem China is digging in, I'm not sure we can reach a deal in a reasonable time frame," he said. Bullard repeated that he thinks the Fed should delay further interest rate increases. Market signals show investors are not worried about inflation, which should allow the Fed to let the economy run & watch inflation closely, he added. Only 4 of 16 senior Fed officials penciled in a pause in Dec, the rest expected another qtr-point move.
Fed's Bullard says Nafta deal would be a 'very big positive'
This was another quiet day in trading with little economic news to move stocks. The Dow was near break even for much of the day. But it had an excellent qtr, rising about 2.2K & reached record highs last week. The bulls are feeling good even with all the turmoil in DC & over intl trade.
Dow Jones Industrials
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