Dow slumped 194, decliners over advancers better than 2-1 & NAZ inched up pennies. The MLP index sank 4+ to the 216s & the REIT index dropped 4+ to 328. Junk bond funds crawled higher & Treasuries advanced in price. Oil continued sliding lower (down 1 to the 64s) & gold went up 10 to 1268, anther recent high.
AMJ (Alerian MLP Index tracking fund)
Stocks opened lower on Christmas Eve, as investors weighed the significance of China saying progress is being made on trade talks with American officials against news that the Treasury secretary met with heads of big banks & made plans to convene a group dubbed the "Plunge Protection Team." Treasury Secretary Steve Mnuchin called the CEOs of the nation's 6 largest banks amid an ongoing stock market rout. "The CEOs confirmed that they have ample liquidity available for lending," said. Mnuchin added "also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly." Meanwhile, China said it plans to remove import & export tariffs in 2019 on a range of goods, including alternative meals used in animal feed, to secure supplies of raw materials amid trade tensions with the US & boosting outbound cargoes. US marketswill end at 1:00PM ET. Congress missed a midnight Fri deadline for getting a spending bill passed, resulting in a partial gov shutdown. No votes are scheduled to end the stalemate until after Christmas. Today's Asian trading, China's Shanghai Composite ended the day up 0.4% & Hong Kong's Hang Seng index dropped 0.4% (Japan's markets were closed). In Europe trading, London's FTSE was down 0.5%, France's CAC traded down 1.5%. Germany's markets were closed for Christmas Eve. On Fri, stocks ended a choppy session sharply lower with the NAZ in bear market territory.
Mnuchin calls bankers, prepares 'Plunge Protection Team'
China plans to remove import & export tariffs in 2019 on a range of goods, including import taxes on alternative meals used in animal feed, to secure supplies of raw materials amid trade tensions with the US boosting outbound cargoes. Import tariffs on alternative meals, which include rapeseed meal, cotton meal, sunflower meal & palm meal, will be removed from Jan 1, the finance ministry said. China's trade war with the US has unsettled the global soy market after China virtually stopped all imports of US soybeans after the imposition of additional 25% tariffs in Jul. While China has resumed some purchases of US soybeans, the tariffs on the oilseed from America remain in place, & the removal of tariffs on alternative meals could help improve the reliability of supply of animal feed meal in China. The US is the 2nd-largest soybean supplier to China & that component of the trade between the countries was worth $12B in 2017. China brings in soybeans to crush into meal for animal feed and cooking oil. The country has the world's largest pig herd. Beijing had previously sought ways to cut protein levels in animal feed & import more alternative meals, to reduce its reliance on US soybean shipments. The most active rapeseed meal futures traded on Zhengzhou Commodity Exchange, for delivery in May, slid nearly 3% to 2,113 yuan ($306.26) per ton on the news. China's soymeal futures & soybean futures also fell 1.3% &1.6%, respectively. Import tariffs on materials of some pharmaceutical goods will also be cut to zero, according to the finance ministry. To boost overall imports, China also reduced the numbe of items taxed on a list of temporary import tariffs to slightly more than 700, from more than 900 items. China will also maintain relatively low import tariffs for aircraft engines, at 1%, to help grow its indigenous plane-making industry. For exports, China will not levy any tariffs on 94 products next year including fertilizers, iron ore, slag, coal tar & wood pulp. It will also further cut most-favored-nation tariffs on 298 information technology products from Jul 2019. China's economic growth slowed to 6.5% in Q3, the weakest pace since the global financial crisis & is expected to slow further next year amid the trade war with the US.
A partial gov shutdown entered its 3rd day, with little hope of a quick resolution as lawmakers left town for the holidays. Congress & the White House have failed to break an impasse over Pres Trump's demand for $5B to build his proposed border wall. About a ¼ of the gov will remain unfunded until at least Thurs, when the Senate will next convene. But the stalemate could last much longer as Trump & Dem leaders give no ground on funding for the barrier on the US-Mexico border. Yesterday, incoming White House chief of staff & Office of Management & Budget Director Mick Mulvaney said “it’s very possible this shutdown will go beyond the 28th and into the new Congress,” which starts on Jan. 3. The political fight has affected hundreds of Ks of federal workers around the country. About 380K gov employees were expected to face furloughs. More than 420K workers were projected to temporarily work without pay, though the affected pay cycles will not come for a few weeks.
The government shutdown could drag into 2019 as Trump keeps pushing for border wall funds
Not much for traders to do ahead of the holidays. With the bulls off on an early holiday, the abundance of negative news just leaves the bears. And they are selling. Difficult times do not seem to be ending anytime soon. The Dow is down to the low 21Ks, off a massive 4700 since the Oct 3 peak. Meanwhile the negative thinkers keep buying gold. Try to have a happy holiday season!!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 44.54 | -1.05 | -2.3% |
| GC=F | Gold | 1,270.20 | +12.10 | +1.0% |
Stocks opened lower on Christmas Eve, as investors weighed the significance of China saying progress is being made on trade talks with American officials against news that the Treasury secretary met with heads of big banks & made plans to convene a group dubbed the "Plunge Protection Team." Treasury Secretary Steve Mnuchin called the CEOs of the nation's 6 largest banks amid an ongoing stock market rout. "The CEOs confirmed that they have ample liquidity available for lending," said. Mnuchin added "also confirmed that they have not experienced any clearance or margin issues and that the markets continue to function properly." Meanwhile, China said it plans to remove import & export tariffs in 2019 on a range of goods, including alternative meals used in animal feed, to secure supplies of raw materials amid trade tensions with the US & boosting outbound cargoes. US marketswill end at 1:00PM ET. Congress missed a midnight Fri deadline for getting a spending bill passed, resulting in a partial gov shutdown. No votes are scheduled to end the stalemate until after Christmas. Today's Asian trading, China's Shanghai Composite ended the day up 0.4% & Hong Kong's Hang Seng index dropped 0.4% (Japan's markets were closed). In Europe trading, London's FTSE was down 0.5%, France's CAC traded down 1.5%. Germany's markets were closed for Christmas Eve. On Fri, stocks ended a choppy session sharply lower with the NAZ in bear market territory.
Stock investors gauge positive, negative developments to trade in shortened session
The elements of a perfect storm are there for
further upheaval in the financial markets: A gov shutdown,
Christmas holiday & a congressional stalemate over the border wall. Pres
Trump''s Treasury secretary called top US bankers yesterday amid an
ongoing rout & made plans to convene a group of
officials known as the "Plunge Protection Team." US stocks have fallen sharply in recent weeks on concerns over slowing economic growth, rising interest rates & global turmoil. "Today
I convened individual calls with the CEOs of the nation's six largest
banks," Treasury Secretary Steve Mnuchin said on Twitter shortly before
financial markets were due to open in Asia. US equity index futures dropped late yesterday
as electronic trading resumed to kick off a holiday-shortened week. In
early trading, the benchmark S&P 500's e-mini futures contract was
off by about a ¼ of a %. The Treasury said in a statement that Mnuchin talked with top bank CEOs.
"The CEOs confirmed that they have ample liquidity available for
lending," the Treasury said. Mnuchin said "also
confirmed that they have not experienced any clearance or margin issues
and that the markets continue to function properly." Mnuchin's
calls to the bankers came amid a partial gov shutdown that began
on Sat following an impasse in Congress over Trump's demand for
more funds for a wall on the border with Mexico. Financing
for about a ¼ of federal programs expired at midnight
on Fri & the shutdown could continue to Jan 3 (or later). The
Treasury said Mnuchin will convene a call on today with the pres's
Working Group on Financial Markets, which
includes the main stewards of the US financial system and is
sometimes referred to as the "Plunge Protection Team." The
group, which was also convened in 2009 during the latter stage of the
financial crisis, includes officials from the Federal Reserve as well as
the SEC. Traders are also closely following reports that Trump has
privately
discussed the possibility of firing Federal Reserve Chairman Jerome
Powell. Mnuchin said on Sat Trump told him he had "never suggested
firing" Powell. Trump has criticized the
central bank for raising interest rates this year, which could further
dampen economic growth. The Fed's independence is seen as a pillar of
the US financial system.
Mnuchin calls bankers, prepares 'Plunge Protection Team'
China plans to remove import & export tariffs in 2019 on a range of goods, including import taxes on alternative meals used in animal feed, to secure supplies of raw materials amid trade tensions with the US boosting outbound cargoes. Import tariffs on alternative meals, which include rapeseed meal, cotton meal, sunflower meal & palm meal, will be removed from Jan 1, the finance ministry said. China's trade war with the US has unsettled the global soy market after China virtually stopped all imports of US soybeans after the imposition of additional 25% tariffs in Jul. While China has resumed some purchases of US soybeans, the tariffs on the oilseed from America remain in place, & the removal of tariffs on alternative meals could help improve the reliability of supply of animal feed meal in China. The US is the 2nd-largest soybean supplier to China & that component of the trade between the countries was worth $12B in 2017. China brings in soybeans to crush into meal for animal feed and cooking oil. The country has the world's largest pig herd. Beijing had previously sought ways to cut protein levels in animal feed & import more alternative meals, to reduce its reliance on US soybean shipments. The most active rapeseed meal futures traded on Zhengzhou Commodity Exchange, for delivery in May, slid nearly 3% to 2,113 yuan ($306.26) per ton on the news. China's soymeal futures & soybean futures also fell 1.3% &1.6%, respectively. Import tariffs on materials of some pharmaceutical goods will also be cut to zero, according to the finance ministry. To boost overall imports, China also reduced the numbe of items taxed on a list of temporary import tariffs to slightly more than 700, from more than 900 items. China will also maintain relatively low import tariffs for aircraft engines, at 1%, to help grow its indigenous plane-making industry. For exports, China will not levy any tariffs on 94 products next year including fertilizers, iron ore, slag, coal tar & wood pulp. It will also further cut most-favored-nation tariffs on 298 information technology products from Jul 2019. China's economic growth slowed to 6.5% in Q3, the weakest pace since the global financial crisis & is expected to slow further next year amid the trade war with the US.
China to remove some import, export tariffs
A partial gov shutdown entered its 3rd day, with little hope of a quick resolution as lawmakers left town for the holidays. Congress & the White House have failed to break an impasse over Pres Trump's demand for $5B to build his proposed border wall. About a ¼ of the gov will remain unfunded until at least Thurs, when the Senate will next convene. But the stalemate could last much longer as Trump & Dem leaders give no ground on funding for the barrier on the US-Mexico border. Yesterday, incoming White House chief of staff & Office of Management & Budget Director Mick Mulvaney said “it’s very possible this shutdown will go beyond the 28th and into the new Congress,” which starts on Jan. 3. The political fight has affected hundreds of Ks of federal workers around the country. About 380K gov employees were expected to face furloughs. More than 420K workers were projected to temporarily work without pay, though the affected pay cycles will not come for a few weeks.
The government shutdown could drag into 2019 as Trump keeps pushing for border wall funds
Not much for traders to do ahead of the holidays. With the bulls off on an early holiday, the abundance of negative news just leaves the bears. And they are selling. Difficult times do not seem to be ending anytime soon. The Dow is down to the low 21Ks, off a massive 4700 since the Oct 3 peak. Meanwhile the negative thinkers keep buying gold. Try to have a happy holiday season!!
Dow Jones Industrials
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