Dow finished up 108, decliners over advancers 3-2 & NAZ inched up pocket change. The MLP index gave back 1+ top the 242s & the REIT index did little in the 349s. Junk bond funds slid lower & Treasuries were slightly higher in price. Oil crawled higher in the 51s (more below) & gold fell 9 to 1212.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.8116015171332475)
With discounts starting early & more days to shop before Christmas this year, fewer people turned out for the 5-day shopping extravaganza that runs from Thanksgiving Day to Cyber Monday, a retail industry trade group said. But holiday shoppers still have long lists of gifts to buy & plenty of days to do it, giving the National Retail Federation (NRF) confidence it will be a robust holiday season. "This was a very strong holiday weekend ... and a very positive indicator of where we are headed," Bill Thorne, senior VP for communications & public affairs at NRF, said. More than 165M shopped either online or in stores from Thanksgiving Day - Cyber Monday this year, down from more than 174M in 2017, NRF revealed. The trade group is still calling for holiday sales to increase 4.3-4.8%, emphasizing it expects growth will come on the higher end of that range. Shoppers say they still have 56% of their holiday shopping left to do, NRF found in polling 3058 consumers between Nov 24-25. 92% of consumers think the deals they saw during Thanksgiving weekend will either continue or improve for the remainder of the year. "Consumers now view the holiday season as two months," starting around Halloween, Thorne said. And increasingly, consumers are using the 5-day holiday weekend to buy for themselves, he added. NRF found self-gifting to be up 13% from a year ago. The average shopper spent $313 on gifts & other holiday items from Thanksgiving Day-Cyber Monday, down from $335 last year. And more & more of those $s are being spent online. NRF said more than 89M shopped both online & in stores this holiday season, up roughly 40% from a year ago. It's already been reported that this year a record $6.22B was spent online Black Friday with $3.7B spent online Thanksgiving Day. Shoppers are seen turning to their smartphones to make purchases around the holidays, especially younger consumers, as retailers improve their mobile apps. Social media sites are also making it easier for people to shop directly within those apps.
Fewer people shopped during the 5-day Thanksgiving weekend
There's a good chance that a key inflation measure could soon fall back below Fed's 2% target, according to new research published by the Federal Reserve Bank of San Francisco. The core measure of inflation, which strips out relatively volatile energy & food prices, finally hit the Fed's 2% target in Jul after being persistently below that mark for years following the recession in 2008. But a close examination of the cause for the run-up shows it was not due to the strengthening economy but to idiosyncratic, or “acyclical” factors excluding health care, according to a paper from San Francisco Fed research adviser Adam Shapiro. Housing, recreation & food services, costs that are “procyclical” or more sensitive to overall economic conditions, have not moved much at all, he said. There is no “smoking gun” for the rise in acyclical inflation, Shapiro added. The gains are broad-based. Historically, acyclical inflation excluding heath care is not very persistent, meaning that any move from its benchmark level is likely to dissipate quickly. “This implies that the recent upward pressure stemming from acyclical factors could diminish in the future,” Shapiro concluded. Fed officials have stressed in recent weeks that future interest-rate hikes are not going to occur automatically & policy will instead be adjusted depending on the data. So a softening of the inflation data implies the central bank may not have to push rates above a neutral level & into restrictive territory. The prospect of restrictive policy has been a factor in the recent weakness in equity prices.
Consumers confidence fell in Nov for the first time in 5 months, reflecting a slightly less optimistic view among Americans on how the economy will perform next year. The consumer confidence index slipped to 135.7 this month from an 18-year high of 137.9 in October, the Conference Board said. The present situation index, a measure of how Americans view the economy right now, edged up to 172.7 from 171.9, just a shade below an 18-year peak. A separate survey that asks consumers what the economy will look like 6 months from now dropped to 111.0 from 115.1. The Oct reading was the highest since 2000. Americans are still very confident they can find a job with the unemployment rate at a 48-year low & job openings near a record high. They just aren't sure their income will grow much faster in the next year. Nor are they as sure business conditions will remain as strong as they've been for the most of the last 2 years. “Despite a small decline in November, consumer confidence remains at historically strong levels,” said Lynn Franco, senior director of economic indicators at the board. “Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019,” she said. “However, if expectations soften further in the coming months, the pace of growth is likely to begin moderating.” The survey of consumer confidence shows Americans are still quite optimistic about the economy, if a bit less so than they were just a month or 2 ago. One caveat: The survey doesn't ask consumers about the stock market & how its performance affects them. Stocks have fallen sharply in the past month, bringing fresh worries mainly to upper-income Americans who have much of their retirement savings in the market. A different consumer survey shows that lower-income Americans with less or no money in the stock market were more optimistic about the US economy & their own financial well-being.
Oil prices turned firmly lower. Crude futures were little changed earlier in the session, depressed by a report of record Saudi production but supported by expectations that oil exporters would agree to cut output at an OPEC meeting next week. Brent crude oil was down 25¢ at $60.23, hovering above a 13-month low of $58.41 reached on Fri & West Texas Intermediate crude fell 2¢ to $51.61. In the previous session, WTI fell to $50.10, its lowest level since mid-Oct 2017. Oil prices have lost almost 1/3 of their value since early Oct, weighed down by an emerging supply overhang & widespread financial market weakness. Prices rallied sharply yesterday, with Brent rising almost 2.9%, but the market has struggled to stay positive. Leaders of the Group of 20 nations (G20), the world's biggest economies, meet on Nov 30-Dec 1, with the trade war between DC & Beijing top of the agenda. With the top 3 crude producers — Russia, the US & Saudi Arabia — all present, oil policy is expected to be discussed. OPEC meets in Vienna on Dec 6 to discuss output policy together with some non-OPEC producers, including Russia. Saudi Arabia raised oil production to an all-time high in Nov, an industry source said, pumping 11.1-11.3M barrels per day (bpd). Saudi Arabia indicated last month it would pump 11M bpd in Nov. But the kingdom has been pushing for a collective production cut by members of OPEC, indicating it may reduce supply by 500K bpd. Pres Trump has put pressure on Saudi Arabia, OPEC's de-facto leader, not to cut production, but most analysts expect OPEC to start withholding some supply soon.
Oil prices fall toward 2018 lows ahead of G-20 and OPEC meetings
Buyers returned for late day trading, but cautiously, following yesterday's advance, highlighted by negative market breadth. Retail holiday sales look good, but intl trade & looming higher interest rates worry traders. The chart below shows the Dow is close to its lows back in early May while flirting with breakeven YTD. As said many times before, after leading the stock market higher sexy tech stocks have been stumbling for several weeks. Problems with intl trade & techs stocks are troubling for the bulls.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Pres Trump is preparing for a face-to-face
sit down with Chinese Pres Xi Jinping in what is being described as
one of his most critical meetings of his presidency, as the 2 nations
are stymied by “unsatisfactory discussions” over trade. "This
is a big deal, this meeting, and the stakes are very high,” said White
House economic adviser Larry Kudlow. The leaders of the world's 2
largest economies will meet Sat at the Group of 20 summit in
Buenos Aires, Argentina. Specifics on the dinner meeting, including who
else may attend, are still being hashed out. Trump, who famously co-wrote “The Art of The Deal,” will likely be putting his master negotiating skills to work. "President Trump has a terrific track record as a negotiator and he will
know through fact and instinct how to handle this,” said Kudlow, while
also noting that Xi has some of the same skills. “My suspicion is
President Xi likewise … they know how to handle themselves, they know
what the stumbling blocks are. Both sides are being frank and candid,”
he noted. Trump has repeatedly stated that the Chinese want
to make a deal, but little progress has transpired. At issue, Bs
in tariffs that are harmful to the economies of both countries,
intellectual property theft by the Chinese & cyber security. Earlier
this month, the Justice Dept indicted 2 companies based in
China & Taiwan, & 3 individuals on charges of stealing trade
secrets from Micron (MU), the semiconductor company, according to then-Attorney General Jeff Sessions. Also, former Microsoft (MSFT & a Dow stock) CEO Steve Ballmer bashed China saying 90% of companies in the country are using
the Windows operating system, though only 1% are actually
paying for it. Ballmer says the theft has to end. “I’m a free trader, by
nature. I went to the school of economics – it’s the best thing for the
world,” Ballmer said. “This one’s a tricky issue
because it’s absolutely clear that the rules don’t apply in China, and
the U.S. government needs to do something" he added.
Trump and China's Xi meeting could be 'breakthrough'
With discounts starting early & more days to shop before Christmas this year, fewer people turned out for the 5-day shopping extravaganza that runs from Thanksgiving Day to Cyber Monday, a retail industry trade group said. But holiday shoppers still have long lists of gifts to buy & plenty of days to do it, giving the National Retail Federation (NRF) confidence it will be a robust holiday season. "This was a very strong holiday weekend ... and a very positive indicator of where we are headed," Bill Thorne, senior VP for communications & public affairs at NRF, said. More than 165M shopped either online or in stores from Thanksgiving Day - Cyber Monday this year, down from more than 174M in 2017, NRF revealed. The trade group is still calling for holiday sales to increase 4.3-4.8%, emphasizing it expects growth will come on the higher end of that range. Shoppers say they still have 56% of their holiday shopping left to do, NRF found in polling 3058 consumers between Nov 24-25. 92% of consumers think the deals they saw during Thanksgiving weekend will either continue or improve for the remainder of the year. "Consumers now view the holiday season as two months," starting around Halloween, Thorne said. And increasingly, consumers are using the 5-day holiday weekend to buy for themselves, he added. NRF found self-gifting to be up 13% from a year ago. The average shopper spent $313 on gifts & other holiday items from Thanksgiving Day-Cyber Monday, down from $335 last year. And more & more of those $s are being spent online. NRF said more than 89M shopped both online & in stores this holiday season, up roughly 40% from a year ago. It's already been reported that this year a record $6.22B was spent online Black Friday with $3.7B spent online Thanksgiving Day. Shoppers are seen turning to their smartphones to make purchases around the holidays, especially younger consumers, as retailers improve their mobile apps. Social media sites are also making it easier for people to shop directly within those apps.
Fewer people shopped during the 5-day Thanksgiving weekend
There's a good chance that a key inflation measure could soon fall back below Fed's 2% target, according to new research published by the Federal Reserve Bank of San Francisco. The core measure of inflation, which strips out relatively volatile energy & food prices, finally hit the Fed's 2% target in Jul after being persistently below that mark for years following the recession in 2008. But a close examination of the cause for the run-up shows it was not due to the strengthening economy but to idiosyncratic, or “acyclical” factors excluding health care, according to a paper from San Francisco Fed research adviser Adam Shapiro. Housing, recreation & food services, costs that are “procyclical” or more sensitive to overall economic conditions, have not moved much at all, he said. There is no “smoking gun” for the rise in acyclical inflation, Shapiro added. The gains are broad-based. Historically, acyclical inflation excluding heath care is not very persistent, meaning that any move from its benchmark level is likely to dissipate quickly. “This implies that the recent upward pressure stemming from acyclical factors could diminish in the future,” Shapiro concluded. Fed officials have stressed in recent weeks that future interest-rate hikes are not going to occur automatically & policy will instead be adjusted depending on the data. So a softening of the inflation data implies the central bank may not have to push rates above a neutral level & into restrictive territory. The prospect of restrictive policy has been a factor in the recent weakness in equity prices.
Inflation may soon sink back below 2% target, San Francisco Fed says
Consumers confidence fell in Nov for the first time in 5 months, reflecting a slightly less optimistic view among Americans on how the economy will perform next year. The consumer confidence index slipped to 135.7 this month from an 18-year high of 137.9 in October, the Conference Board said. The present situation index, a measure of how Americans view the economy right now, edged up to 172.7 from 171.9, just a shade below an 18-year peak. A separate survey that asks consumers what the economy will look like 6 months from now dropped to 111.0 from 115.1. The Oct reading was the highest since 2000. Americans are still very confident they can find a job with the unemployment rate at a 48-year low & job openings near a record high. They just aren't sure their income will grow much faster in the next year. Nor are they as sure business conditions will remain as strong as they've been for the most of the last 2 years. “Despite a small decline in November, consumer confidence remains at historically strong levels,” said Lynn Franco, senior director of economic indicators at the board. “Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019,” she said. “However, if expectations soften further in the coming months, the pace of growth is likely to begin moderating.” The survey of consumer confidence shows Americans are still quite optimistic about the economy, if a bit less so than they were just a month or 2 ago. One caveat: The survey doesn't ask consumers about the stock market & how its performance affects them. Stocks have fallen sharply in the past month, bringing fresh worries mainly to upper-income Americans who have much of their retirement savings in the market. A different consumer survey shows that lower-income Americans with less or no money in the stock market were more optimistic about the US economy & their own financial well-being.
Consumer confidence falls for first time in five months
Oil prices turned firmly lower. Crude futures were little changed earlier in the session, depressed by a report of record Saudi production but supported by expectations that oil exporters would agree to cut output at an OPEC meeting next week. Brent crude oil was down 25¢ at $60.23, hovering above a 13-month low of $58.41 reached on Fri & West Texas Intermediate crude fell 2¢ to $51.61. In the previous session, WTI fell to $50.10, its lowest level since mid-Oct 2017. Oil prices have lost almost 1/3 of their value since early Oct, weighed down by an emerging supply overhang & widespread financial market weakness. Prices rallied sharply yesterday, with Brent rising almost 2.9%, but the market has struggled to stay positive. Leaders of the Group of 20 nations (G20), the world's biggest economies, meet on Nov 30-Dec 1, with the trade war between DC & Beijing top of the agenda. With the top 3 crude producers — Russia, the US & Saudi Arabia — all present, oil policy is expected to be discussed. OPEC meets in Vienna on Dec 6 to discuss output policy together with some non-OPEC producers, including Russia. Saudi Arabia raised oil production to an all-time high in Nov, an industry source said, pumping 11.1-11.3M barrels per day (bpd). Saudi Arabia indicated last month it would pump 11M bpd in Nov. But the kingdom has been pushing for a collective production cut by members of OPEC, indicating it may reduce supply by 500K bpd. Pres Trump has put pressure on Saudi Arabia, OPEC's de-facto leader, not to cut production, but most analysts expect OPEC to start withholding some supply soon.
Oil prices fall toward 2018 lows ahead of G-20 and OPEC meetings
Buyers returned for late day trading, but cautiously, following yesterday's advance, highlighted by negative market breadth. Retail holiday sales look good, but intl trade & looming higher interest rates worry traders. The chart below shows the Dow is close to its lows back in early May while flirting with breakeven YTD. As said many times before, after leading the stock market higher sexy tech stocks have been stumbling for several weeks. Problems with intl trade & techs stocks are troubling for the bulls.
Dow Jones Industrials
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