Dow jumped up 279, advancers over declines 5-2 & NAZ soared 161 (2+%). The MLP index went up 1+ to the 258s & the REIT index gained 3+ to the 341s. Junk bond funds crawled higher & Treasuries slid lower. Oil rose to the 67s & gold was steady at 1231.
AMJ (Alerian MLP Index tracking fund)
Dow swoons make October most volatile month in 118 years
US jobless claims rise; continuing claims lowest in more than 45 years
Trade tensions between have taken another negative turn, with the US demanding that China come up with a specific plan to stop stealing technology. Until Beijing does so, the US will not resume trade negotiations. The latest impasse jeopardizes a meeting between Pres Trump & China's Xi Jinping scheduled for the end of Novr at the G20 meeting. There had been some hope that Trump & the Chinese pres could make progress on the myriad trade issues between the 2 sides, a major focus being forced technology transfers. China has sought to resume talks but the US has refused until Beijing addresses the tech issue. “If China wants [the G-20 session] to be a meaningful meeting, we need to do the groundwork,” a senior White House official said. “And if they don’t give us any information, it’s just hard to see how that becomes fruitful.” The US has slapped tariffs on $200B worth of Chinese goods, charging the country with unfair trade practices that have ballooned the deficit between the 2. Trump has threatened to put duties on all imported goods from China. A week ago, Larry Kudlow said the US has let its demands be known but has not seen a satisfactory response. “They are unfair traders. They are illegal traders. They have stolen our intellectual property,” he added in Detroit. “China has not responded positively to any of our asks.”
US won't talk to China on trade until it gets specific plan to halt tech theft
Buyers returned after yesterday's selloff. The VIX, volatility index, is down 1½ to the 23s, but remains in very high territory. The long term for investors is the PM & nobody knows how the stock averages will behave then. Dark clouds of global growth worries, US-China trade issues & higher interest rates have not gone away which should keep any recovery limited.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 67.47 | +0.65 | +1.0% |
| GC=F | Gold | 1,233.20 | +2.10 | +0.2% |
Oct, also dubbed the “jinx month” by
investors, historically has always been a volatile month for stocks,
largely due to the crashes of 1929 & 1987 & a general superstitious
sentiment. But if this year feels more roller coaster like, well it is. For
the Dow, Oct 2018 is now on record as the
most volatile month in 118 years, based on daily percentage swings since
1900, the most ever. For the S&P 500, the broadest measure of
stocks, volatility is the highest in 90 years or since the modern day
index rolled out in 1928, also the most on record. The gyrating, which
shaved 2% off the major US averages yesterday, helped erase all yearly gains for the Dow & the S&P
500, while the NAZ is still clinging onto a 3%
annual gain, even though it is in correction territory [down 10%
from the Aug high]. With the midterms approaching, some including White House Economic Advisor Larry Kudlow suggest investors are nervous Dems will win control of the House & undo Trump's historic tax plan & his cutting of regulatory red
tape. While other investors raised concerns over a negative impact of
tariffs. This week Caterpillar (CAT), a Dow stock, a barometer for the global economy,
warned that tariffs are driving up steel & aluminum costs. However, market technicians are taking a more
practical view & suggest volatility could be easing soon based on
trading patterns. On Tues, by the closing bell the Dow had erased the
bulk of what was nearly a 600 point midday selloff. Many
investors & including the Trump administration are confident the
volatility will dissipate because the fundamentals of the economy are
strong, as noted in statement released after the market's rubbing on yesterday.
Dow swoons make October most volatile month in 118 years
Stocks climbed, after a day that
saw the Dow erase its gains for the year as the VIX volatility index, or
fear index, gained 22% to its 2nd-highest level of the year. Earnings
activity reaches a peak on today with a slew of big names reporting Q3 results. The big focus will be on Amazon (AMZN) & Google parent
Alphabet (GOOG) after the closing bell. On the
economic calendar, traders digested the latest weekly jobless claims,
which rose by 5K. Coming up is pending home sales data, which will
follow a batch of weak reports. Commodities were mixed today.
Stocks rebound following market rout
New applications for US unemployment aid rose
last week, but the number of Americans receiving benefits fell to more
than a 45-year low, pointing to tightening labor market conditions. Initial
claims for state unemployment benefits increased 5K to a seasonally
adjusted 215K for the latest week, the Labor Dept said. Claims fell to
202K during the prior week, which was the lowest level since
1969. The forecast called for claims rising to 214. The Labor
Dept said claims for South & North Carolina continued to be
affected by Hurricane Florence, & claims for Florida & Georgia were
impacted by Hurricane Michael. The 4-week
moving average of initial claims, considered a better measure of labor
market trends as it irons out week-to-week volatility, was unchanged at
211K last week. The labor market is viewed as being near or at
full employment, with the unemployment rate close to a 49-year low of
3.7%. There are a record 7.14M open jobs in the economy,
suggesting a shortage of skilled workers. That
was confirmed by the Federal Reserve's Beige Book published on yesterday. According to the Fed, "employers throughout the country
continued to report tight labor markets and difficulties finding
qualified workers." Tightening labor market conditions & a robust
economy likely will keep the central bank on course to increase
interest rates again in Dec. The Fed raised rates in Sep for
the 3rd time this year & removed a reference to monetary policy
remaining "accommodative" from its policy statement. The report also showed the number of people receiving benefits after
an initial week of aid dropped 5K to 1.64M, the lowest level since 1973. The 4-week moving
average of continuing claims fell 6K to 1.65M,
also the lowest level since 1973. The
continuing claims data covered the week of the household survey from
which the unemployment rate for Oct will be calculated. The 4-week average of continuing claims declined 33K between the
Sep & Oct survey periods suggesting a further improvement in
the unemployment rate.
US jobless claims rise; continuing claims lowest in more than 45 years
Trade tensions between have taken another negative turn, with the US demanding that China come up with a specific plan to stop stealing technology. Until Beijing does so, the US will not resume trade negotiations. The latest impasse jeopardizes a meeting between Pres Trump & China's Xi Jinping scheduled for the end of Novr at the G20 meeting. There had been some hope that Trump & the Chinese pres could make progress on the myriad trade issues between the 2 sides, a major focus being forced technology transfers. China has sought to resume talks but the US has refused until Beijing addresses the tech issue. “If China wants [the G-20 session] to be a meaningful meeting, we need to do the groundwork,” a senior White House official said. “And if they don’t give us any information, it’s just hard to see how that becomes fruitful.” The US has slapped tariffs on $200B worth of Chinese goods, charging the country with unfair trade practices that have ballooned the deficit between the 2. Trump has threatened to put duties on all imported goods from China. A week ago, Larry Kudlow said the US has let its demands be known but has not seen a satisfactory response. “They are unfair traders. They are illegal traders. They have stolen our intellectual property,” he added in Detroit. “China has not responded positively to any of our asks.”
US won't talk to China on trade until it gets specific plan to halt tech theft
Buyers returned after yesterday's selloff. The VIX, volatility index, is down 1½ to the 23s, but remains in very high territory. The long term for investors is the PM & nobody knows how the stock averages will behave then. Dark clouds of global growth worries, US-China trade issues & higher interest rates have not gone away which should keep any recovery limited.
Dow Jones Industrials
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