Dow jumped up 130, decliners ahead of advancers 4-3 & NAZ gained 14. The MLP index fell 1+ to 241 & the REIT index added 1+ to 351. Junk bond funds were mixed & Treasuries declined in price. Oil slid back in the 51s & gold was flattish at 1212.
AMJ (Alerian MLP Index tracking fund)
The US economy maintained its growth rate during Q3, with GDP remaining at 3.5% in a 2nd reading, in line with analyst expectations. That cooled slightly from 4.2% in Q2, but remains in line with the Trump administration's goal of achieving a 3% growth rate in each qtr. Growth is still largely being driven by PresTrump's $1.5T tax overhaul, which was signed into law last Dec & significantly slashed the corp tax rate, bolstering business investment & increasing consumer confidence. After-tax corp profits increased at a 3.3% rate last qtr, after rising at a 2.1% pace in Q2. Consumer spending, meanwhile, revised slightly lower at 3.6%, compared to the 4% rate that was estimated in Oct. The economy is also expected to slow more in Q4. GDPNow Opens a New Window, an up-to-date tracker monitored by the Federal Reserve Bank of Atlanta, is estimating Q4 growth of 2.5%, in large part to gradually fading fiscal stimulus & the ramifications of a nearly year-long trade war between the US & China.
GDP unrevised in 3Q
Traders are hoping that Chairman Powell will have soothing words to say about future interest rate hikes. Optimism is fading as popular stock averages have been declining after the rise at the open. Problems at the southern border can have a major impact on trade if shipments from Mexico are halted. One more worry for the stock market to deal with. Presently the Dow is nearing 25K while there are plenty of dark clouds around.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 50.95 | -0.61 | -1.2% |
| GC=F | Gold | 1,211.90 | -1.50 | -0.1% |
Stocks opened higher on hopes that a
meeting during the G20 gathering between Pres Trump & Chinese
Pres Xi Jinping could thaw trade tensions between the 2
countries. Investors were also hoping that
Federal Reserve Chairman Jerome Powell would signal a more dovish stance
on interest rates by the central bank during a speech today. Meanwhile,
the 2nd revision to Q3 GDP came in as expected, unchanged at 3.5%. Yesterday, stocks trimmed
early session losses & posted modest gains as shares of several tech
companies and retailers paced the broader market. Investors
assessed a downbeat report from the S&P CoreLogic Case-Shiller
National Home Price Index, which indicated that the pace of US home
price hikes declined in Sep. In PM trading, several big tech companies began rising & retailers
also posted gains, pushing the Dow & S&P 500 into positive territory. Sentiment
was also boosted when Larry Kudlow, Trump's top
economic advisor, told reporters that prospects for a US-China trade
were encouraging. In Asian markets, China's Shanghai Composite finished the day up 1.1% & Hong Kong's Hang Seng Index ended the session up 1.3%. Japan's Nikkei average rose for a 4th day gaining 1%. In Europe, London's FTSE was lower by 0.1%, Germany's DAX was gaining 0.1% & France's CAC added 0.2%.
US stocks up on hopes Powell will signal rate hike relief
The US economy maintained its growth rate during Q3, with GDP remaining at 3.5% in a 2nd reading, in line with analyst expectations. That cooled slightly from 4.2% in Q2, but remains in line with the Trump administration's goal of achieving a 3% growth rate in each qtr. Growth is still largely being driven by PresTrump's $1.5T tax overhaul, which was signed into law last Dec & significantly slashed the corp tax rate, bolstering business investment & increasing consumer confidence. After-tax corp profits increased at a 3.3% rate last qtr, after rising at a 2.1% pace in Q2. Consumer spending, meanwhile, revised slightly lower at 3.6%, compared to the 4% rate that was estimated in Oct. The economy is also expected to slow more in Q4. GDPNow Opens a New Window, an up-to-date tracker monitored by the Federal Reserve Bank of Atlanta, is estimating Q4 growth of 2.5%, in large part to gradually fading fiscal stimulus & the ramifications of a nearly year-long trade war between the US & China.
GDP unrevised in 3Q
Pres Trump threatened to shut down
the gov if Congress does not send him a bill approving $5B for a wall along the US-Mexico border ahead of a looming
deadline that could prompt a partial gov shutdown. Just 9 days before a possible partial gov shutdown, Trump
said he would “totally be willing” to do so if he doesn't receive the
funding he wants for the wall. “I will tell
you, politically speaking, that issue is a total winner,” he said. “People look at the border, they look at the rush to the
police, they look at the rock throwers and really hurting three people,
three very brave border patrol folks -- I think that it's a tremendous
issue, but much more importantly, is really needed. So we have to have
border security." A bipartisan deal in the
Senate approved $1.6B in border security, but Trump remained
adamant that he needed the $5B to fund the centerpiece of his
2016 presidential campaign. Earlier this year, Dem & Rep
leaders struck a deal to avoid a shutdown by funding about ¾
of the gov into 2019. Funding for the Department of Homeland
Security & several other agencies, however, will expire on Dec 7. If he doesn't receive his desired funding, Trump also threatened to increase physical security at the border, which has been the site of
increasingly tense clashes between migrants & US border officials
in recent days, including the use of tear gas & pepper spray against
members of the migrant caravan. "We need
Democrat votes to have a wall," Trump said. "Now, if we don't get it,
will I get it done another way? I might get it done another way. There
are other potential ways that I can do it. You saw what we did with the
military, with the barbed wire and the fencing, and various other
things."
Trump threatens shutdown over border wall funding
Traders are hoping that Chairman Powell will have soothing words to say about future interest rate hikes. Optimism is fading as popular stock averages have been declining after the rise at the open. Problems at the southern border can have a major impact on trade if shipments from Mexico are halted. One more worry for the stock market to deal with. Presently the Dow is nearing 25K while there are plenty of dark clouds around.
Dow Jones Industrials
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