Dow slid back about 1 (falling 200 in the last hour), advancers over decliners about 3-1 & NAZ recovered 63 (but down 40 in the last hour). The MLP index recovered 4+ to 247 & the REIT index lost 3+ to the 349s. Junk bond funds were mixed & Treasuries edged lower. Oil went up 1 to the 54s & gold rose 5 to 1226.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Fed will be 'day to dependent': Dallas Fed's Kaplan
Amid prolonged trade disputes & rising interest rates, the global economy will continue to slow down next year, according to the latest forecasts from the Organization for Economic Cooperation and Development (OECD). But the Paris-based group doesn't see a recession on the horizon. Global growth will slow from an estimated 3.7% this year to 3.5% in 2019 & 2020, down from a previous forecast of 3.7% for 2019. The slowdown is expected to hit hardest in developing economies, as rising interest rates dampen in investment in continues like Brazil, Russia, Turkey & South Africa. "We're returning to the long-term trend. We're not expecting a hard landing, however, there's a lot of risks. A soft landing is always difficult," the OECD said. Trade flows between the US & China have slowed after an escalation in tariffs by DC & Beijing. The stalled Brexit negotiations over Great Britain's looming departure from the EU have also raised uncertainty about the impact on trade flows between the EU & UK. An escalation of trade tensions could cut global GDP growth by as much as 0.8% by 2021, according to the latest OECD estimates. Thanks in part to the stimulus effect from broad tax cuts, the OECD forecast for the US in 2018 & 2019 was unchanged from the group's Sep projection, which calls for GDP growth of nearly 3.0% this year & next to slightly more than 2.0% in 2020 as the stimulus effect of tax cuts eases & higher tariffs begin to cut into corp profits. China's economy is expected to continue to slow to a 30-year low of 6.0% in 2020, as Beijing tries to manage the impact of higher U.S. tariffs. Growth prospects for Europe weakened from the Sep forecast, down 0.4% to 1.6% in 2020, despite efforts by European central bankers to boost growth with low interest rates. In addition to worries about the impact of the UK's Brexit, Europe's economy faces a deeper-than-expected slowdown in Italy. Italian growth is pegged at only 1.0% this year, slowing to 0.9% in 2019 & 2020.
Trade tariffs, higher interest rates are slowing global growth, OECD says
Stocks struggled all day to recover losses from selling in the last 2 days. Buyers bought tech stocks but they went home an hour before the close & the Dow was also hit with selling. Hardly an impressive recovery for the stock market. The Dow is down almost 1K this week while NAZ fell 275. The shortened day of trading on Fri is not expected to bring relief from the selling.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Dallas Federal Reserve Pres Robert Kaplan
said the central bank has no plans to change its policy, despite
disapproval from Pres Trump on the pace of interest rate hikes. “I
think we’re getting close or approaching a neutral, where we’re neither
accommodative nor restrictive,” he said. The
Fed raised interest rates in Sep for the 3rd time this year,
to a range of 2 -2.25% & signaled it would raise
borrowing costs again in Dec. The central bank also forecast an
additional 3 rate hikes in 2019 & one in 2020. They have raised
rates a total of 8 times since 2015. The
Fed raises interest rates to prevent the economy from growing too fast & as a result causing inflation. Inflation is defined as the general
increase of the price of goods over a period of time. Consumers are
already seeing prices of goods begin to creep higher, with US consumer
prices increasing 2.5% in Oct. Trump launched an assault on the Opens a New Window, saying that it is his “biggest threat” because it is “raising rates too fast, and it’s too independent.” Kaplan said due to potential headwinds, the Fed should be patient & gradual going forward. “We’re
going to be – and use the lingo “day to dependent,” he added. “And that
means we’re going to be very sensitive, to talking to contacts, looking
at data, understanding what’s going on with businesses, looking global.”
Fed will be 'day to dependent': Dallas Fed's Kaplan
Orders to US factories for big-ticket
manufactured goods fell by the largest amount in 15 months with a key
category that tracks business investment showing weakness for a 3rd
straight month. The Commerce Dept said that orders for durable goods dropped 4.4% last month.
It was the 3rd decline in the past 4 months with the Oct drop
led by a huge decline in the volatile areas of commercial & military
aircraft. A category that serves as a proxy for business investment was flat in
Oct after declines in both Aug & Sep. The slowdown has
raised the specter that a widening trade war between the US & China is causing US companies to grow more cautious about
committing resources to expand & modernize operations.
Durable goods fall most in 15 months in October
Amid prolonged trade disputes & rising interest rates, the global economy will continue to slow down next year, according to the latest forecasts from the Organization for Economic Cooperation and Development (OECD). But the Paris-based group doesn't see a recession on the horizon. Global growth will slow from an estimated 3.7% this year to 3.5% in 2019 & 2020, down from a previous forecast of 3.7% for 2019. The slowdown is expected to hit hardest in developing economies, as rising interest rates dampen in investment in continues like Brazil, Russia, Turkey & South Africa. "We're returning to the long-term trend. We're not expecting a hard landing, however, there's a lot of risks. A soft landing is always difficult," the OECD said. Trade flows between the US & China have slowed after an escalation in tariffs by DC & Beijing. The stalled Brexit negotiations over Great Britain's looming departure from the EU have also raised uncertainty about the impact on trade flows between the EU & UK. An escalation of trade tensions could cut global GDP growth by as much as 0.8% by 2021, according to the latest OECD estimates. Thanks in part to the stimulus effect from broad tax cuts, the OECD forecast for the US in 2018 & 2019 was unchanged from the group's Sep projection, which calls for GDP growth of nearly 3.0% this year & next to slightly more than 2.0% in 2020 as the stimulus effect of tax cuts eases & higher tariffs begin to cut into corp profits. China's economy is expected to continue to slow to a 30-year low of 6.0% in 2020, as Beijing tries to manage the impact of higher U.S. tariffs. Growth prospects for Europe weakened from the Sep forecast, down 0.4% to 1.6% in 2020, despite efforts by European central bankers to boost growth with low interest rates. In addition to worries about the impact of the UK's Brexit, Europe's economy faces a deeper-than-expected slowdown in Italy. Italian growth is pegged at only 1.0% this year, slowing to 0.9% in 2019 & 2020.
Trade tariffs, higher interest rates are slowing global growth, OECD says
Stocks struggled all day to recover losses from selling in the last 2 days. Buyers bought tech stocks but they went home an hour before the close & the Dow was also hit with selling. Hardly an impressive recovery for the stock market. The Dow is down almost 1K this week while NAZ fell 275. The shortened day of trading on Fri is not expected to bring relief from the selling.
Happy Holiday Season to all 😀
Dow Jones Industrials
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