Dow pulled back 49, advancers modestly ahead of decliners & NAZ went up 39. The MLP index fell 1 to 270 & the REIT index added 2+ to the 341s. Junk bond funds fluctuated & Treasuries inched higher. Oil slid back to the 68s (more below) & gold was off 5 to 1223.
AMJ (Alerian MLP Index tracking fund)
Stocks lower to start the week
Small business optimism rising, more hiring planned: Survey
OPEC kingpin Saudi Arabia does not wish to impose a 1973-style oil embargo on Western consumers, the country’s energy minister reportedly said Monday, amid a deepening crisis over the killing of journalist Jamal Khashoggi. It comes as the world's top oil exporter faces intensifying intl pressure to explain exactly what happened to Khashoggi at a Turkish consulate earlier this month. On Fri, the kingdom admitted for the first time that Khashoggi — a prominent critic of Saudi leaders and former Washington Post journalist — had been killed. The statement comes after Riyadh initially said he had left the building unharmed on Oct 2. Turkish authorities claim Khashoggi was murdered by a team of Saudi agents inside the consulate & say they have evidence to prove it. Saudi Crown Prince Mohammed bin Salman has denied any involvement. “There is no intention,” Khalid al-Falih replied when asked whether there could be a replay of the 1973-style oil embargo. The 1973 oil embargo refers to an extraordinary move by Arab OPEC members to stranglehold oil markets. It was imposed on countries supporting Israel during that year's Yom Kippur war between Israel & several Arab states. As a result, the US was left with a crude shortage and oil prices quadrupled. ‘This incident will pass’ Top US lawmakers ramped up the pressure on Saudi Arabia over the weekend, accusing the crown prince of orchestrating the killing of Khashoggi. However, Pres Trump's administration has adopted a more cautious stance. Some US lawmakers have even suggested punishing Saudi Arabia with economic sanctions, while Riyadh has promised to retaliate to any sanctions with “bigger measures.” “This incident will pass. But Saudi Arabia is a very responsible country, for decades we used our oil policy as (a) responsible economic tool and isolated it from politics,” al-Falih said. “My role as the energy minister is to implement my government’s constructive and responsible role and stabilizing the world’s energy markets accordingly, contributing to global economic development.” Saudi Arabia's energy minister also warned that if oil prices went up, it would most likely trigger a global recession. But added with the prospect of US sanctions against Iran coming into effect early next month, there could be no guarantee of oil prices staying below triple digits. “I cannot give you a guarantee, because I cannot predict what will happen to other suppliers,” al-Falih said, when asked if the world could avoid crude futures jumping above $100 a barrel again.
Saudi Arabia says it has 'no intention' of using oil as a political weapon amid Khashoggi crisis
Business owners remain optimistic on economic conditions, but with elections looming that could change quickly. The intl scene continues to be touchy & those dark clouds make traders nervous. The Saudi situation is confusing & trade issues, starting with China, are stuck in the mud. The first reading on Q3 GDP is due next week.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 68.39 | -0.73 | -1.1% |
| GC=F | Gold | 1,224.80 | -3.90 | -0.3% |
Stocks were lower, erasing earlier gains, with investors looking to a busy week for corp earnings. 10
members of the Dow, 1/3 of the blue-chip barometer, will
report their Jul-Sep results this week. We'll also hear from 154
companies in the S&P 500 (30%) of the benchmark
index. In Asian markets, blue chips in Shanghai jumped 4.1% in
the largest daily gain in 3 years, adding to the Fri bounce on
Beijing's pledge of support for the economy & companies. Stateside, stocks finished mixed Fri as
investors digested the latest earnings reports while
digesting the latest economic data. The Dow rose 64 (0.3%) to
25,444 & the S&P 500 ticked a point lower to 2767. The NAZ dropped 36 (0.5%) to 7449.
Stocks lower to start the week
Continued growth of an already strong US economy has lifted small business optimism to post-recession highs, particularly among male business
owners & more owners plan to boost hiring. Capital
One said its latest Small Business Growth Index, a biannual
survey of 500 small business owners (SBO), found 67% of business
owners overall think business conditions in their area are good or
excellent, up from 60% a year ago. While
female business owners have historically been more optimistic than
males, the survey shows there has been a reversal. 69% of
male SBOs say current economic conditions are good or excellent, up
from 57% a year ago. Meanwhile, 64% of women believe
conditions are good or excellent, compared to 63% one year ago. “We’ve
seen small business optimism continue to rise as business owners
benefit from a strong economy,” said Jenn Flynn, head of Small Business
Bank at Capital One. “At the same time, small business owners still have
concerns about taxes, tariffs and other areas of economic policy.” SBOs who feel current business conditions are good
or excellent say business growth (65%), national economic
conditions (54%) & improved business operations (51%)
are driving their optimism. 1/3 of small
business owners plan to hire in the next 6 months, an increase from 25% one year ago & 38% of small business owners say
their biggest competition when hiring & retaining employees is larger
businesses that can offer more robust benefits packages. Most business owners feel the current administration has been positive for small business. But health care costs, taxes & trade policy are top concerns, with 49% of SBOs saying the cost of health
care is a top policy concern, followed by tax policies (43%) &
economic growth (36%). The
survey was conducted Aug 17-Sep 13 interviewing a national sample of 501 for-profit small businesses,
defined as businesses with total annual revenue of less than $10M. The margin of error is plus or minus 4.38 percentage points at a
95% confidence level.
Small business optimism rising, more hiring planned: Survey
Treasury Secretary Steve Mnuchin said countries that seek waivers on Itan oil sanctions will have to reduce their purchases by more than 20%,
the amount that the Obama administration established when it expanded
sanctions on the Middle Eastern country. "I would expect that if we do give waivers it will be significantly larger reductions," Mnuchin said during a stop in Jerusalem at the beginning of his trip to the Middle East. Mnuchin, whose comments come just weeks before the Trump administration reimposes financial sanctions, which include oil, also downplayed the
effect on oil prices, saying the losses were already factored in by the
markets. The sanctions on Iranian crude oil consumers will resume after
Nov 4. “Oil
prices have already gone up, so my expectation is that the oil market
has anticipated what's going on in the reductions. I believe the
information is already reflected in the price of oil," he added. The Treasury Secretary said that eventually countries would have to reduce their imports to zero. “I
don’t expect we will get to zero in November but I do expect we will
eventually get to zero,” he said. “There have been already very
significant reductions in advance of this date.”
OPEC kingpin Saudi Arabia does not wish to impose a 1973-style oil embargo on Western consumers, the country’s energy minister reportedly said Monday, amid a deepening crisis over the killing of journalist Jamal Khashoggi. It comes as the world's top oil exporter faces intensifying intl pressure to explain exactly what happened to Khashoggi at a Turkish consulate earlier this month. On Fri, the kingdom admitted for the first time that Khashoggi — a prominent critic of Saudi leaders and former Washington Post journalist — had been killed. The statement comes after Riyadh initially said he had left the building unharmed on Oct 2. Turkish authorities claim Khashoggi was murdered by a team of Saudi agents inside the consulate & say they have evidence to prove it. Saudi Crown Prince Mohammed bin Salman has denied any involvement. “There is no intention,” Khalid al-Falih replied when asked whether there could be a replay of the 1973-style oil embargo. The 1973 oil embargo refers to an extraordinary move by Arab OPEC members to stranglehold oil markets. It was imposed on countries supporting Israel during that year's Yom Kippur war between Israel & several Arab states. As a result, the US was left with a crude shortage and oil prices quadrupled. ‘This incident will pass’ Top US lawmakers ramped up the pressure on Saudi Arabia over the weekend, accusing the crown prince of orchestrating the killing of Khashoggi. However, Pres Trump's administration has adopted a more cautious stance. Some US lawmakers have even suggested punishing Saudi Arabia with economic sanctions, while Riyadh has promised to retaliate to any sanctions with “bigger measures.” “This incident will pass. But Saudi Arabia is a very responsible country, for decades we used our oil policy as (a) responsible economic tool and isolated it from politics,” al-Falih said. “My role as the energy minister is to implement my government’s constructive and responsible role and stabilizing the world’s energy markets accordingly, contributing to global economic development.” Saudi Arabia's energy minister also warned that if oil prices went up, it would most likely trigger a global recession. But added with the prospect of US sanctions against Iran coming into effect early next month, there could be no guarantee of oil prices staying below triple digits. “I cannot give you a guarantee, because I cannot predict what will happen to other suppliers,” al-Falih said, when asked if the world could avoid crude futures jumping above $100 a barrel again.
Saudi Arabia says it has 'no intention' of using oil as a political weapon amid Khashoggi crisis
Business owners remain optimistic on economic conditions, but with elections looming that could change quickly. The intl scene continues to be touchy & those dark clouds make traders nervous. The Saudi situation is confusing & trade issues, starting with China, are stuck in the mud. The first reading on Q3 GDP is due next week.
Dow Jones Industrials
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