Dow tumbled 496 (closing near the lows), decliners over advancers about 4-1 & NAZ sank 159. The MLP index fell 2+ to the 242s & the REIT index rose 2 to 352. Junk bond funds were sold & Treasuries went up in price. Oil fell 1+ to 51 (more below) & gold gave back 5 to 1242.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
US industrial production climbed 0.6% on surging output at mines & utilities. But manufacturing production was flat. The Federal Reserve said that that utility output rose 3.3% as power companies were busier because of unusually cold weather. Mining output rose 1.7% on higher production at coal mines, & oil & gas drillers. Overall industrial production is up 3.9% from Nov 2017. But manufacturing was flat in Nov after falling 0.1% in Oct. Factories are contending with a stronger $ that makes their products more expensive in foreign markets, slowing global growth & import taxes that raise their costs.
Record cash streamed out of US-based stock funds & Bs more fled bonds in a week of apparently escalated caution, Lipper data showed. More than $46B thundered out of US stock mutual funds & exchange-traded funds, the most ever, while a near-record $13B poured from bonds. Relatively low-risk money market funds pulled in $81B, also the most recorded. The withdrawals appeared to show investor confidence cracking in the waning days of a wild year of up-&-down trading that has left many people with losses across both stock & bond funds, a rare occurrence. The end-of-year numbers could also reflect changes related to capital gains distributions & as investors re-evaluate their holdings for tax reasons & other purposes, though in other years the volume has not been this high in a single week. Federal Reserve rate hikes, high corporate borrowing, rising relative yields on short-term bonds, US-China trade tensions & slowing growth in corp profits have left investors with much to stew over. The average US-based equity fund is down 6.3% in the year thru Dec 11, while its bond counterpart is down 0.9%. More than $45B of the withdrawals came from equity mutual funds, heavily used by retail investors during the week. Lipper measures a week as the 7-day period from Thurs-Wed & much of its records date back to 1992. Individual investors are the most pessimistic about stock performance they have been in more than 5 years, with 49% expecting the market to fall in the next 6 months, according to a widely-followed survey by the American Association of Individual Investors covering the latest week.
Record $46 billion pulled from US-based stock funds in a week, according to Lipper
Oil prices dropped , weighed down by a falling US stock market, while weak economic data from China pointed to lower fuel demand in the world's biggest oil importer. Brent crude futures fell $1.33, or 2.2%, to $60.12 a barrel & West Texas Intermediate (WTI) crude futures dropped 2.6% to settle at $51.20 a barrel. Global benchmark Brent had a weekly loss of about 2% while WTI was declined 2.7%. US equity markets broadly fell as China's Nov retail sales grew at their weakest pace since 2003 & industrial output rose the least in nearly 3 years. The report highlighted the risks of Beijing's trade dispute with the US & added to nerves about US-China trade talks.Chinese oil refinery throughput in Nov fell from Oct, suggesting an easing in oil demand, though runs were 2.9% above year-ago levels. Concerned by mounting oversupply, OPEC & other oil producers including Russia agreed last week to reduce output by 1.2M barrels per day (bpd), or more than 1% of global demand. The Intl Energy Agency said it expected a deficit in oil supply by Q2 of next year, provided OPEC members & other key producers stuck closely to last week’s deal to cut output. As part of the agreement, de facto OPEC leader Saudi Arabia plans to reduce its output to 10.2M bpd in Jan. The IEA kept its 2019 forecast for global oil demand growth at 1.4M bpd, unchanged from its projection last month & it expected growth of 1.3M bpd this year.
US oil drops 2.6% to $51.20 a barrel amid weak China economic data
Santa Claus is far away & investors are losing faith in the stock market. Times are tough. The VIX (volatility index) is in the 22s, about double where it was in the "good old days" when there was a market rally. While stocks are being sold, the time should be used for research on stocks that are acquisition investments down the road.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The US & Canada began high-stakes talks today amid an escalating dispute with China that threatens to further
complicate ties between the North American neighbors. Secretary
of State Mike Pompeo & Defense Secretary Jim Mattis were meeting
their Canadian counterparts for discussions expected to be dominated by
Canada's arrest of Meng Wanzhou, the CFO of
telecommunications giant Huawei. Meng was
picked up Dec 1 at the request of the US, which wants her
extradited to face charges that she and her company misled banks about
the company's business dealings in Iran. China has detained 2
Canadians in apparent retaliation. The case has
set off a 3-way diplomatic furor in which Canada is stuck in the
middle. The dispute threatens to complicate ties between the US &
Canada, which were already testy. A Canadian judge released Meng on
bail Tues, causing some consternation in DC. Pres
Trump said he might intervene in the case if it would help clinch a
trade agreement with China. Trump has
previously attacked Canada & Prime Minister Justin Trudeau over trade, & his suggestion that he could intervene contradicted Canadian
officials who said the arrest was not political. Canadian
Foreign Minister Chrystia Freeland took a swipe at Trump, saying it was
"quite obvious" any foreign country requesting extradition should
ensure "the process is not politicized." Canada's tourism minister postponed a planned trip to China because of the tensions. Also, Canada's Global Affairs department said it had just received
consular access to Michael Kovrig, one of the Canadians detained in
China. They continue to press for access to Michael Spavor. Both were
arrested Mon. In years past, the US would
have been counted on to defend Canada when came it under attack and
other countries would know the US had Canada's back. That is no longer
a certainty. In Aug, Saudi Arabia expelled
Canada's ambassador to the kingdom & withdrew its own ambassador after
Canada's foreign ministry tweeted support for an arrested Saudi
activist. The Saudis also sold Canadian investments & ordered their
citizens studying in Canada to leave. No
country, including the US, spoke out publicly in support of Canada, & the Trump administration has been steadfast in its support for Saudi
Arabia. American support for the kingdom has come under intense
scrutiny after US intelligence officials concluded Saudi Crown Prince
Mohammed bin Salman must have at least known of the plot to kill
journalist Jamal Khashoggi. Now the stakes are
much higher.
US, Canada hold high-stakes talks amid turmoil with China
US industrial production climbed 0.6% on surging output at mines & utilities. But manufacturing production was flat. The Federal Reserve said that that utility output rose 3.3% as power companies were busier because of unusually cold weather. Mining output rose 1.7% on higher production at coal mines, & oil & gas drillers. Overall industrial production is up 3.9% from Nov 2017. But manufacturing was flat in Nov after falling 0.1% in Oct. Factories are contending with a stronger $ that makes their products more expensive in foreign markets, slowing global growth & import taxes that raise their costs.
US industrial production climbed 0.6 percent in November
Record cash streamed out of US-based stock funds & Bs more fled bonds in a week of apparently escalated caution, Lipper data showed. More than $46B thundered out of US stock mutual funds & exchange-traded funds, the most ever, while a near-record $13B poured from bonds. Relatively low-risk money market funds pulled in $81B, also the most recorded. The withdrawals appeared to show investor confidence cracking in the waning days of a wild year of up-&-down trading that has left many people with losses across both stock & bond funds, a rare occurrence. The end-of-year numbers could also reflect changes related to capital gains distributions & as investors re-evaluate their holdings for tax reasons & other purposes, though in other years the volume has not been this high in a single week. Federal Reserve rate hikes, high corporate borrowing, rising relative yields on short-term bonds, US-China trade tensions & slowing growth in corp profits have left investors with much to stew over. The average US-based equity fund is down 6.3% in the year thru Dec 11, while its bond counterpart is down 0.9%. More than $45B of the withdrawals came from equity mutual funds, heavily used by retail investors during the week. Lipper measures a week as the 7-day period from Thurs-Wed & much of its records date back to 1992. Individual investors are the most pessimistic about stock performance they have been in more than 5 years, with 49% expecting the market to fall in the next 6 months, according to a widely-followed survey by the American Association of Individual Investors covering the latest week.
Record $46 billion pulled from US-based stock funds in a week, according to Lipper
Oil prices dropped , weighed down by a falling US stock market, while weak economic data from China pointed to lower fuel demand in the world's biggest oil importer. Brent crude futures fell $1.33, or 2.2%, to $60.12 a barrel & West Texas Intermediate (WTI) crude futures dropped 2.6% to settle at $51.20 a barrel. Global benchmark Brent had a weekly loss of about 2% while WTI was declined 2.7%. US equity markets broadly fell as China's Nov retail sales grew at their weakest pace since 2003 & industrial output rose the least in nearly 3 years. The report highlighted the risks of Beijing's trade dispute with the US & added to nerves about US-China trade talks.Chinese oil refinery throughput in Nov fell from Oct, suggesting an easing in oil demand, though runs were 2.9% above year-ago levels. Concerned by mounting oversupply, OPEC & other oil producers including Russia agreed last week to reduce output by 1.2M barrels per day (bpd), or more than 1% of global demand. The Intl Energy Agency said it expected a deficit in oil supply by Q2 of next year, provided OPEC members & other key producers stuck closely to last week’s deal to cut output. As part of the agreement, de facto OPEC leader Saudi Arabia plans to reduce its output to 10.2M bpd in Jan. The IEA kept its 2019 forecast for global oil demand growth at 1.4M bpd, unchanged from its projection last month & it expected growth of 1.3M bpd this year.
US oil drops 2.6% to $51.20 a barrel amid weak China economic data
Santa Claus is far away & investors are losing faith in the stock market. Times are tough. The VIX (volatility index) is in the 22s, about double where it was in the "good old days" when there was a market rally. While stocks are being sold, the time should be used for research on stocks that are acquisition investments down the road.
Dow Jones Industrials
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