Dow tumbled 245 (600 off AM highs), decliners over advancers about 3-2 & NAZ sank 116 (but off earlier lows). The MLP index fell 3+ to 250 (a 6 month low shown below) & the REIT index declined to the 337s. Junk bond funds were sold & Treasuries finished steady. Oil dropped under 67 (more below) & gold declined 5 to 1230.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The US is preparing new tariffs against all remaining Chinese imports if trade talks between Pres Trump & Pres Xi Jinping fail to reconcile the ongoing trade dispute. An announcement of new taxes against goods from China could occur as early as Dec & target the rest of the imports from the Asian nation that are not already subject to tariffs. The total would amount to about $257B worth. The stock market fell immediately after the report, with shares of global aerospace & aircraft maker Boeing (BA), a Dow, stock falling for its worst one-day performance since Feb 2016. The new tariffs, if enacted, would be the final step in the administration's efforts to force Chinese leadership to the negotiation table thru pressure on Chinese goods. The White House levied tariffs of 10% on $200B of Chinese products in Sep, with the rate set to increase to 25% by the end of the year barring a breakthrough in the trade talks. In response, Beijing said it would impose taxes on 5K UK imports worth about $60B. The 2 nations had already imposed tariffs on $50B of each other's goods before the Sep sanctions. While China is targeting US goods including coal, grease, Vaseline, asphalt & plastic products, the US is taxing items such as appliances & furniture.
US reportedly planning tariffs on remaining $257 billion in Chinese goods if Trump-Xi talks fail
Oil prices fell as as Russia signaled its output will remain high & concern over the global economy put crude on track for its biggest monthly fall since mid-2016. Losses were limited ahead of US sanctions on Iranian exports that are expected to reduce supplies when they come into effect in just under a week. US crude futures ended the session down 55¢ to $67.04. The contract has slumped about 8.5% in Oct, on pace for its largest monthly percentage decline since Jul 2016. Brent crude oi futures were down 8¢ at $77.54 a barrel, dropping 6.3% this month & also threatening to post the worst decline since Jul 2016. Even with US sanctions on Iranian exports due to come into force on Nov 4, oil prices have fallen about $10 a barrel since 4-year highs reached in early Oct. Russian Energy Minister Alexander Novak said on Sat there was no reason for Russia to freeze or cut its oil production levels, noting that there were risks that global oil markets could be facing a deficit. The OPEC, led by Saudi Arabia & non-OPEC member Russia, agreed in Jun to lift oil supplies, but OPEC then signaled last week that it may have to reimpose output cuts as global inventories rise. Industrial commodities such as crude & copper have been rattled by hefty losses in global equities due to concern over corp earnings, & fears over the impact to economic growth from escalating trade tensions. Though equity markets recovered today, the benchmark S&P 500 was on track to post its worst monthly performance since May 2010. The US $ index also rose, supported by robust US consumer spending data. A stronger $ makes greenback-denominated commodities more expensive for holders of other currencies.
Oil falls as concern deepens over global economic outlook
Shares of Amazon.com (AMZN) tumbled, putting them on track to kick off their first bear market in over 2½-years. The e-commerce & cloud giant's stock, which was headed toward the lowest close in 6 months, has now plunged 14.5% in 2 days, since the company reported Q3 after the Thurs close, shaving off $126B in market capitalization during that time. That put the stock 25% below its Sep 4 record close of $2039. Many traders define a bear market as a decline of 20% or more from a bull-market peak. Its last bear market ended on Mar 1, 2016, when it closed 20% above its Feb 9, 2016 bear market low of $482, which was 30.5% below the previous bull-market peak of $693 on Dec 29, 2015. The stock sank down a whopping 104 (6%) but off session lows.
If you would like to learn more about AMZN, click on this link:
club.ino.com/trend/analysis/stock/AMZN?a_aid=CD3289&a_bid=6ae5b6f7
There was not much behind the AM rally other than hope. The best wishes were dashed in the PM with talk about higher tariffs on Chinese imports to the US. Dow stock BA sank 23. Adding to market woes is the mass selling in the sexy high tech giants. Besides AMZN, this was a very ugly day for Alphabet (GOOG) & Netflix (NFLX), among many, with declines of 5-6%. NAZ is down more than 1K from its recent record highs made just 2 months ago. Even with buying into the close which trimmed losses, more selling in the stock market lies ahead.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
China's yuan sank to a 10-year low against the $, coming close to breaking the politically sensitive
level of 7 to the $. The yuan
declined to 6.9644 per $ already, passing its most recent low in
2016 before recovering slightly. It was the lowest level since May 2008. The
currency's weakness is one of a series of elements fueling America's
trade complaints against Beijing. The Treasury Dept declined
this month to label China a currency manipulator but said it was
closely watching Beijing. Chinese authorities
have promised to avoid "competitive devaluation" to boost exports amid a
tariff war with Pres Trump over Beijing's technology
policy. But they are trying to make the state-controlled exchange rate
more responsive to market forces, which are pushing the yuan lower. The level of 7 yuan to the $ has no economic significance, but could revive US attention to the exchange rate. The
yuan, also known as the renminbi, or "people's money," has declined by
almost 10% against the $ since April as China's economy
cooled & US & Chinese interest rates went in opposite directions. That
helps exporters cope with tariffs of up to 25% imposed by Trump
on B$ of Chinese goods. But it raises the risk of
inflaming American complaints about Beijing's trade tactics. A Treasury report on Oct 17 said China
failed to meet criteria to be labeled a currency manipulator, a status
that can trigger sanctions. But it said Beijing was, along with Japan & Germany, on a list of govs whose currency polices would be
closely monitored. A weaker yuan also might
encourage an outflow of capital from the world's 2nd-largest economy.
That would raise borrowing costs at a time when its leaders are trying
to shore up cooling growth. The People's Bank
of China has been trying to make its exchange rate mechanism more
efficient by increasing the role of market forces. The
exchange rate is set each morning & allowed to fluctuate by 2%
against the $ during the day. The central bank can buy or sell
currency, or order Chinese commercial banks to do so, to dampen price
movements. Some forecasters say Beijing's
stance might change if Trump & his Chinese counterpart, Xi Jinping,
make no progress at a possible meeting during a Nov gathering of
the Group of 20 major economies. The central
bank tried to discourage speculation by imposing a requirement in Aug
that traders post deposits for contracts to buy or sell yuan. That
allows trading to continue but raises the cost. Beijing
imposed similar controls in Oct 2015 after a change in the exchange
rate mechanism prompted markets to bet the yuan would fall. The
currency temporarily steadied but fell the following year.
China's yuan sinks to 10-year low against dollar
The US is preparing new tariffs against all remaining Chinese imports if trade talks between Pres Trump & Pres Xi Jinping fail to reconcile the ongoing trade dispute. An announcement of new taxes against goods from China could occur as early as Dec & target the rest of the imports from the Asian nation that are not already subject to tariffs. The total would amount to about $257B worth. The stock market fell immediately after the report, with shares of global aerospace & aircraft maker Boeing (BA), a Dow, stock falling for its worst one-day performance since Feb 2016. The new tariffs, if enacted, would be the final step in the administration's efforts to force Chinese leadership to the negotiation table thru pressure on Chinese goods. The White House levied tariffs of 10% on $200B of Chinese products in Sep, with the rate set to increase to 25% by the end of the year barring a breakthrough in the trade talks. In response, Beijing said it would impose taxes on 5K UK imports worth about $60B. The 2 nations had already imposed tariffs on $50B of each other's goods before the Sep sanctions. While China is targeting US goods including coal, grease, Vaseline, asphalt & plastic products, the US is taxing items such as appliances & furniture.
US reportedly planning tariffs on remaining $257 billion in Chinese goods if Trump-Xi talks fail
Oil prices fell as as Russia signaled its output will remain high & concern over the global economy put crude on track for its biggest monthly fall since mid-2016. Losses were limited ahead of US sanctions on Iranian exports that are expected to reduce supplies when they come into effect in just under a week. US crude futures ended the session down 55¢ to $67.04. The contract has slumped about 8.5% in Oct, on pace for its largest monthly percentage decline since Jul 2016. Brent crude oi futures were down 8¢ at $77.54 a barrel, dropping 6.3% this month & also threatening to post the worst decline since Jul 2016. Even with US sanctions on Iranian exports due to come into force on Nov 4, oil prices have fallen about $10 a barrel since 4-year highs reached in early Oct. Russian Energy Minister Alexander Novak said on Sat there was no reason for Russia to freeze or cut its oil production levels, noting that there were risks that global oil markets could be facing a deficit. The OPEC, led by Saudi Arabia & non-OPEC member Russia, agreed in Jun to lift oil supplies, but OPEC then signaled last week that it may have to reimpose output cuts as global inventories rise. Industrial commodities such as crude & copper have been rattled by hefty losses in global equities due to concern over corp earnings, & fears over the impact to economic growth from escalating trade tensions. Though equity markets recovered today, the benchmark S&P 500 was on track to post its worst monthly performance since May 2010. The US $ index also rose, supported by robust US consumer spending data. A stronger $ makes greenback-denominated commodities more expensive for holders of other currencies.
Oil falls as concern deepens over global economic outlook
Shares of Amazon.com (AMZN) tumbled, putting them on track to kick off their first bear market in over 2½-years. The e-commerce & cloud giant's stock, which was headed toward the lowest close in 6 months, has now plunged 14.5% in 2 days, since the company reported Q3 after the Thurs close, shaving off $126B in market capitalization during that time. That put the stock 25% below its Sep 4 record close of $2039. Many traders define a bear market as a decline of 20% or more from a bull-market peak. Its last bear market ended on Mar 1, 2016, when it closed 20% above its Feb 9, 2016 bear market low of $482, which was 30.5% below the previous bull-market peak of $693 on Dec 29, 2015. The stock sank down a whopping 104 (6%) but off session lows.
If you would like to learn more about AMZN, click on this link:
club.ino.com/trend/analysis/stock/AMZN?a_aid=CD3289&a_bid=6ae5b6f7
Amazon's stock plunges toward first bear market in 2 1/2 years
There was not much behind the AM rally other than hope. The best wishes were dashed in the PM with talk about higher tariffs on Chinese imports to the US. Dow stock BA sank 23. Adding to market woes is the mass selling in the sexy high tech giants. Besides AMZN, this was a very ugly day for Alphabet (GOOG) & Netflix (NFLX), among many, with declines of 5-6%. NAZ is down more than 1K from its recent record highs made just 2 months ago. Even with buying into the close which trimmed losses, more selling in the stock market lies ahead.
Dow Jones Industrials
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