Dow jumped up 208, advancers over decliners about 5-4 & NAZ gained 122 after recent selling. The MLP index went up 2+ to the 249s & the REIT index slid lower to the 351s. Junk bond funds did little & Treasuries were steady. Oil crawled higher in the 56s & gold added 4 to 1214.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The top American trade negotiator for the White House has reportedly told some industry execs that the next group of tariffs on China are on hold. It was reported that US Trade Representative Robert Lighthizer had told some execs this, citing a leaker. The US has already put 10% tariffs on more than $200B of Chinese goods & was set to raise that to 25% next year. Pres Trump has also threatened to put tariffs on another $267B of goods in an effort to get China to the negotiating table. Trump & China's Pres Xi Jinping are supposed to meet later this month at the G-20 summit in Argentina to discuss trade & other issues as both sides have stepped up efforts on a truce in the escalating trade conflict. After a Nov 1 phone call from Trump to Xi, China responded to US requests on a variety of issues. A full resolution on trade isn't expected to be hammered out immediately, however. Still the renewal of talks was seen as a positive sign. “We’re having communications at all levels of the U.S. and Chinese government,” Larry Kudlow, director of the National Economic Council, said. Leakers said that they expected Trump & Xi to reach a handshake agreement that would put a pause on the escalation of tensions without actually resolving the underlying issues. It's the same tactic Trump used in negotiations on trade with the EU & on denuclearization with North Korea.
US trade tepresentative said to tell business executives next China tariffs on hold
Atlanta Fed Pres Raphael Bostic called for caution as the central bank determines how far & how fast to keep raising interest rates. Bostic said the central bank is “not too far” from reaching a “neutral” short-term policy rate, a term the Fed likes to use to describe a level that is neither stimulative nor restrictive for growth. That assessment seems to counter a comment last month from Fed Chairman Jerome Powell, who said the Fed is “a long way” from neutral. Powell's comments rattled markets & helped contribute to a substantial round of volatility that has continued through Nov. “I don’t think we are too far from a neutral policy, and neutral is where we want to be,” Bostic said. “We may not be there quite yet, but I am inclined to think that a tentative approach as we proceed would be appropriate.” As part of a continuing process to normalize policy from its highly accommodative stance, the Fed has hiked its benchmark funds rate 3 times in 2018 & is expected to approve another increase in Dec. While the market has priced in each of those hikes, there remains a disparity between traders & the Fed over what is ahead. Central bank officials have pointed to 3 more moves in 2019 & 1 or 2 more in 2020, while the market is implying just 2 more increases in 2019 before a pause. Bostic echoed recent comments from Powell that the Fed runs 2 risks: moving too quickly & halting growth, as Pres Trump fears, or being too tentative & allowing inflation to run rampant. He also expressed some concern about the pace of global growth as well as a US unemployment rate that is below what Fed officials see as sustainable. “I think a risk management approach requires that we at least consider the possibility that unemployment rates that are lower than normal for an extended period are symptoms of an overheated economy,” he said. Among other headwinds he noted are rising credit card delinquencies & a boost from fiscal stimulus that could fade, creating weakness in the economy.
Fed's Bostic says interest rates are 'not too far' from neutral
Oil ekes out a gain, settling at $56.46, despite big jump in US crude stockpiles
The number of Americans filing applications for jobless aid unexpectedly rose last week, but claims for 3 big states were estimated because of the Veterans Day holiday, which could have influenced the data. Initial claims for state unemployment benefits increased 2K to a seasonally adjusted 216K for the latest week, the Labor Dept said. Claims fell to 202K during the week ended Sep 15, which was the lowest level since 1969. The forecast called for claims falling to 212K in the latest week. Claims for California, Virginia & Texas as well as those of Puerto Rico & Hawaii had been estimated. Claims data for North Carolina continued to be affected by Hurricane Florence, while Hurricane Michael impacted those for Florida & Georgia. The 4-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 1K to 215K last week. The labor market is viewed as being near or at full employment, with the jobless rate at 3.7%. The lowest unemployment rate in nearly 49 years is boosting wages, with annual wage growth recording its biggest increase in 9½ years in Oct. The claims report also showed the number of people receiving benefits after an initial week of aid increased 46K to 1.68M. The 4-week moving average of the continuing claims rose 8K to 1.64M.
US retail sales rebound sharply in October
More trade talks sound good, but it will take more than words (coming in a couple of weeks) to solve complicated issues. However hopes are always welcomed by traders. The Dow is back over 25K, making the bulls very happy.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
DC & Beijing have resumed talks over
their spiraling trade dispute ahead of a meeting between Press Xi
Jinping & Trump, China's Commerce Ministry said. The 2 sides are "maintaining close contact" following a Nov 1 phone call
between Xi & Trump, said ministry spokesman Gao Feng. But he gave no
details of the content of the talks or which officials were conducting
them. The 2 govs have raised tariffs
on B$s of each other's goods in a dispute over Beijing's
technology policy. "High-level contacts
between the two sides on economics and trade have resumed following the
Nov. 1 conversation between the Chinese and American heads of state,"
said Gao. " The work team is maintaining close contact to earnestly
implement the consensus reached by the two heads of state." Xi & Trump are due to meet this month at a gathering of the Group of 20 major economies in Argentina. China's
leaders agreed earlier to narrow their country's politically sensitive
trade surplus with the US but have rejected pressure to roll
back plans for state-led development of Chinese champions in robotics & other industries. The US, Europe &
other trading partners say those plans violate Beijing's market-opening
obligations, but Chinese leaders see them as a route to prosperity &
global influence. The Trump administration
hiked tariffs on $250B of Chinese goods over complaints Beijing
steals or pressures foreign companies to hand over technology as the
price of market access. Some American officials also worry Chinese
development plans could erode US industrial leadership. Beijing
responded with penalty duties on $110B of American goods, but
their lopsided trade balance means China is running out of imports for
retaliation. Regulators have expanded their pressure by slowing down
customs clearance for US companies & postponing issuing licenses in
finance & other industries. Chinese exports
to the US have held up despite the tariffs, rising more than
13% over a year earlier each month since the first increases in
Jul. Economists say that is partly due to exporters rushing to fill
orders before a new increase takes effect in Jan, but US demand
should decline next year. VP Mike
Pence said the US could make deals with
China at the G-20 but Beijing must offer concessions on technology
transfer, theft of intellectual property & other issues. DC should "respect China's
sovereignty, security and development interest, as well as the path of
development chosen by the Chinese people," said the spokeswoman, Hua
Chunying.
China says talks with US on trade battle have resumed
The top American trade negotiator for the White House has reportedly told some industry execs that the next group of tariffs on China are on hold. It was reported that US Trade Representative Robert Lighthizer had told some execs this, citing a leaker. The US has already put 10% tariffs on more than $200B of Chinese goods & was set to raise that to 25% next year. Pres Trump has also threatened to put tariffs on another $267B of goods in an effort to get China to the negotiating table. Trump & China's Pres Xi Jinping are supposed to meet later this month at the G-20 summit in Argentina to discuss trade & other issues as both sides have stepped up efforts on a truce in the escalating trade conflict. After a Nov 1 phone call from Trump to Xi, China responded to US requests on a variety of issues. A full resolution on trade isn't expected to be hammered out immediately, however. Still the renewal of talks was seen as a positive sign. “We’re having communications at all levels of the U.S. and Chinese government,” Larry Kudlow, director of the National Economic Council, said. Leakers said that they expected Trump & Xi to reach a handshake agreement that would put a pause on the escalation of tensions without actually resolving the underlying issues. It's the same tactic Trump used in negotiations on trade with the EU & on denuclearization with North Korea.
US trade tepresentative said to tell business executives next China tariffs on hold
Atlanta Fed Pres Raphael Bostic called for caution as the central bank determines how far & how fast to keep raising interest rates. Bostic said the central bank is “not too far” from reaching a “neutral” short-term policy rate, a term the Fed likes to use to describe a level that is neither stimulative nor restrictive for growth. That assessment seems to counter a comment last month from Fed Chairman Jerome Powell, who said the Fed is “a long way” from neutral. Powell's comments rattled markets & helped contribute to a substantial round of volatility that has continued through Nov. “I don’t think we are too far from a neutral policy, and neutral is where we want to be,” Bostic said. “We may not be there quite yet, but I am inclined to think that a tentative approach as we proceed would be appropriate.” As part of a continuing process to normalize policy from its highly accommodative stance, the Fed has hiked its benchmark funds rate 3 times in 2018 & is expected to approve another increase in Dec. While the market has priced in each of those hikes, there remains a disparity between traders & the Fed over what is ahead. Central bank officials have pointed to 3 more moves in 2019 & 1 or 2 more in 2020, while the market is implying just 2 more increases in 2019 before a pause. Bostic echoed recent comments from Powell that the Fed runs 2 risks: moving too quickly & halting growth, as Pres Trump fears, or being too tentative & allowing inflation to run rampant. He also expressed some concern about the pace of global growth as well as a US unemployment rate that is below what Fed officials see as sustainable. “I think a risk management approach requires that we at least consider the possibility that unemployment rates that are lower than normal for an extended period are symptoms of an overheated economy,” he said. Among other headwinds he noted are rising credit card delinquencies & a boost from fiscal stimulus that could fade, creating weakness in the economy.
Fed's Bostic says interest rates are 'not too far' from neutral
Oil futures rose, steadying after this
week's steep losses as fuel stockpile declines in the US
helped offset concerns about a potentially oversupplied market next
year. Prices have also been supported by OPEC signaling possible output cuts in 2019. Brent crude oil futures rose 42¢ to $66.54 a barrel, while US crude futures ended the session 21¢ higher at $56.46. Prices
pared gains after data from the Energy Information Administration
showed crude inventories jumped 10.3M barrels in last week, the
biggest weekly build since Feb 2017. The forecast was for an increase of 3.2M barrels. Gasoline stocks fell 1.4M barrels, while distillate stockpiles drew down by 3.6M barrels, the EIA data showed. OPEC, led by Saudi Arabia, is considering a cut of up
to 1.4M barrels per day (bpd) next year to avoid the kind of
build in global inventories that prompted the oil price to crash between
2014 & 2016. Earlier in the day, 2-high ranking Russian sources said that
Russia wants to stay out of any oil-production cuts being touted by some
of its partners in the OPEC-led supply pact. The Intl Energy Agency & OPEC this week warned of a
sizeable surplus at least in H1-2019, & possibly
beyond, given the pace of growth in non-OPEC production and slower
demand in heavy consumers such as China & India. The oil price
has lost about a ¼ of its value in only 6 weeks, pressured by a
slowing global economy and soaring crude output led by the US.
Oil ekes out a gain, settling at $56.46, despite big jump in US crude stockpiles
The number of Americans filing applications for jobless aid unexpectedly rose last week, but claims for 3 big states were estimated because of the Veterans Day holiday, which could have influenced the data. Initial claims for state unemployment benefits increased 2K to a seasonally adjusted 216K for the latest week, the Labor Dept said. Claims fell to 202K during the week ended Sep 15, which was the lowest level since 1969. The forecast called for claims falling to 212K in the latest week. Claims for California, Virginia & Texas as well as those of Puerto Rico & Hawaii had been estimated. Claims data for North Carolina continued to be affected by Hurricane Florence, while Hurricane Michael impacted those for Florida & Georgia. The 4-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, rose 1K to 215K last week. The labor market is viewed as being near or at full employment, with the jobless rate at 3.7%. The lowest unemployment rate in nearly 49 years is boosting wages, with annual wage growth recording its biggest increase in 9½ years in Oct. The claims report also showed the number of people receiving benefits after an initial week of aid increased 46K to 1.68M. The 4-week moving average of the continuing claims rose 8K to 1.64M.
US retail sales rebound sharply in October
More trade talks sound good, but it will take more than words (coming in a couple of weeks) to solve complicated issues. However hopes are always welcomed by traders. The Dow is back over 25K, making the bulls very happy.
Dow Jones Industrials
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