Dow gave back 394, decliners over advancers 5-1 & NAZ dropped 316. The MLP index sank 6+ (much of yetserday's gain) to the 216s & the REIT index was up 10 to the 326s. Junk bond funds drifted lower & Treasuries were purchased. Oil sold off 1 to the 45s & gold added 3 to 1276 (another multi month high).
AMJ (Alerian MLP Index tracking fund)
Pres Trump scolded Dems over his proposed border wall as a partial gov shutdown carried into its 6th day. Some lawmakers will return from holiday travel today when the Senate is set to convene at 4PM to consider the spending bill. But Congress has so far failed to break an impasse over Trump's demand for $5B to build the barrier & no votes are scheduled. Lawmakers will get 24 hours notice before any vote on a deal to end the shutdown, meaning a vote could not come before Fri at this point. The White House & congressional leaders still appear far from ending the stalemate even as hundreds of Ks of federal workers face furloughs or temporarily work without pay. After he returned from a surprise visit to military service members in Iraq & Germany, Trump quickly turned his attention back to the immigration fight. In a tweet, he questioned whether Dems have "finally realized that we desperately need Border Security and a Wall on the Southern Border." He suggested federal workers damaged by the shutdown support Dems, asking: "Do the Dems realize that most of the people not getting paid are Democrats?" The tweet, combined with remarks the pres made, indicate he has little desire to back down on his demand even as 9 federal depts remain unfunded. With Dems pledging not to put money toward a project they call immoral & ineffective, the impasse looks no closer to cracking. The closure may drag into the new year. House Dems have promised to pass a short-term spending bill to reopen the gov, without wall money, when they take control of the chamber on Jan 3. But Trump could threaten to veto it, jeopardizing the chances of it getting thru the GOP-held Senate. Asked Wed how long he would hold out to see his demands met, Trump responded: "Whatever it takes." He said House Minority Leader Nancy Pelosi, who will likely become speaker in Jan, is "calling the shots." Dems appear uncertain about exactly how the pres wants to spend that $5B. While Trump as a candidate called for a concrete barrier funded by Mexico, his demands have shifted. He has recently called for a wall, a "steel slat" barrier or a fence, "whatever [Democrats] want to call it."
Trump scolds Democrats over border wall with no government shutdown resolution in sight
China says it has made plans with the US for a face-to-face trade meeting in January
Oil trims gains on glut, economy concerns
After taking a beating yesterday, the bears have returned in force. Much of the huge advance late it in the session may have been short covering (buying back earlier selling positions). But that is a short term phenomenon. Reality is back in force today as negative thinking by investors has returned. The only winners are "safe investments" (gold & Treasuries). Fundamental economic issues such as China trade issues & interest rate hikes are getting more attention.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 45.27 | -0.95 | -2.1% |
| GC=F | Gold | 1,277.40 | +8.20 | +0.7% |
Stocks opened sharply lower, giving
back some gains from the previous day's session when the blue-chip Dow posted its biggest one-day point increase in
history. Today's decline was
broad based, with shares of oil companies & big tech posting losses.
Tech-heavy NAZ was on pace for its worst month since
Nov 2008. The Dow & S&P 500 were headed for their worst month
since Feb 2009. European markets returned
to trading following the Christmas & Boxing Day holidays to trade
lower. London's FTSE was down 1%, Germany's DAX fell 2% & France's CAC was off 0.4%. In Asia, Japan's Nikkei followed the US rally with a gain of 3.9%. Chinese shares marked their lowest close in 4
years. China's Shanghai Composite index fell 0.6% & Hong Kong's Hang Seng index fell 0.6%. The declines today follow a block-buster
session: The Dow rose yesterday more than 1080 (nearly 5%), marking the first time in history the exchange rose more than
1K in a single day of trading. The S&P 500 climbed more
than 100 (5%) while tech-heavy NAZ rose more than 360 (nearly 6%). In
economic news, the Labor Dept continues to publish data
during the partial gov shutdown. The weekly number of people
filing for first time jobless claims fell 1K in the past week to
216K. That came in slightly under the estimate for
217K. The prior week's claims rose by 3K to 217K. Gains yesterday in the tech & retail sectors
drove the rally, helping the market recoup losses witnessed on Mon. The energy sector also rose, with US crude oil prices soaring more
than 9% after weeks of declines. Stocks
had taken a beating recently on lingering worries about the economy &
caution over persisting political uncertainties, as a partial federal
gov shutdown lingers & Pres Trump's continues his hostile
stance toward the Federal Reserve.
Stocks take a breather after 1,000-point Dow rally
Pres Trump scolded Dems over his proposed border wall as a partial gov shutdown carried into its 6th day. Some lawmakers will return from holiday travel today when the Senate is set to convene at 4PM to consider the spending bill. But Congress has so far failed to break an impasse over Trump's demand for $5B to build the barrier & no votes are scheduled. Lawmakers will get 24 hours notice before any vote on a deal to end the shutdown, meaning a vote could not come before Fri at this point. The White House & congressional leaders still appear far from ending the stalemate even as hundreds of Ks of federal workers face furloughs or temporarily work without pay. After he returned from a surprise visit to military service members in Iraq & Germany, Trump quickly turned his attention back to the immigration fight. In a tweet, he questioned whether Dems have "finally realized that we desperately need Border Security and a Wall on the Southern Border." He suggested federal workers damaged by the shutdown support Dems, asking: "Do the Dems realize that most of the people not getting paid are Democrats?" The tweet, combined with remarks the pres made, indicate he has little desire to back down on his demand even as 9 federal depts remain unfunded. With Dems pledging not to put money toward a project they call immoral & ineffective, the impasse looks no closer to cracking. The closure may drag into the new year. House Dems have promised to pass a short-term spending bill to reopen the gov, without wall money, when they take control of the chamber on Jan 3. But Trump could threaten to veto it, jeopardizing the chances of it getting thru the GOP-held Senate. Asked Wed how long he would hold out to see his demands met, Trump responded: "Whatever it takes." He said House Minority Leader Nancy Pelosi, who will likely become speaker in Jan, is "calling the shots." Dems appear uncertain about exactly how the pres wants to spend that $5B. While Trump as a candidate called for a concrete barrier funded by Mexico, his demands have shifted. He has recently called for a wall, a "steel slat" barrier or a fence, "whatever [Democrats] want to call it."
Trump scolds Democrats over border wall with no government shutdown resolution in sight
China & the US have made plans for face-to-face consultations over trade in Jan,
the Chinese commerce ministry said, as the 2
countries advanced efforts to resolve a months-long trade war. Consultations through "intensive"
telephone calls will continue in the meantime, Gao Feng, spokesman at
the commerce ministry, told reporters, adding that talks have been
steadily moving forward despite the Christmas break in the US. "Even as the U.S side is
in the Christmas holiday period, China and U.S. economic and trade teams
have been in close communication, and the consultations are progressing
in an orderly manner as scheduled," Gao said. Gao did not comment directly
when asked to confirm a media report on a US trade delegation visit
scheduled for the week of Jan 7. "The two sides have indeed made specific arrangements for
face-to-face consultations in January in addition to continuing
intensive telephone consultations," he added, without elaborating. US & Chinese
officials have spoken by phone in recent weeks, but a meeting next month
would be the first in-person talks since Pres Trump met his Chinese counterpart, Xi Junping, in Buenos Aires on Dec 1. Trump & Xi agreed to stop escalating tit-for-tat tariffs that have
disrupted the flow of hundreds of B$ of goods between
the 2 nations. The leaders also agreed to launch new talks while
the US delayed a planned Jan 1 tariff increase until Mar. In response, China has
resumed purchases of US soybeans for the first time in 6 months,
even though hefty tariffs on US cargoes remain in place. China has also said it will suspend additional
tariffs on US-made vehicles & auto parts for 3 months starting
Jan 1, adding that it hopes both sides can speed up negotiations to
remove all additional tariffs on each other's goods. A US trade team will
travel to Beijing the week of Jan 7 to hold talks with Chinese
officials. A leaker said talks were likely in early Jan. In yet another re-conciliatory sign, China issued on Tues a "negative" list
that specifies industries where investors - domestic or foreign - are
either restricted or prohibited. The unified list is seen
as an effort to address concerns from Western investors that there is no
level-playing field in China. Investment in key Chinese sectors,
however, is still prohibited. Today, China unveiled the draft of a foreign
investment law for public consultation. In it, China has proposed a ban
on forced technology transfer & illegal gov "interference" in
foreign business operations, practices that have come under the
spotlight during the trade war.
China says it has made plans with the US for a face-to-face trade meeting in January
Oil prices fell after rebounding 8% in the previous session, as worries over a glut in crude supply & concerns over a faltering global economy pressured prices even as a
stock market rally offered support. Brent crude
oil dropped $1.67 a barrel (3.1%) to a low of $52.80 before
recovering to around $53.45. US light crude oil slipped
$1.30 to $44.92 & was last 80¢ lower at $45.42. Oil prices reached multi-year highs in early Oct but are now approaching their lowest levels for 18 months. Both
crude oil benchmarks have lost more than 1/3 of their value since
the beginning of Oct & are heading for losses of more than 20% in 2018. 3 months ago it looked as if the global oil
market would be under-supplied through the northern hemisphere winter as
US sanctions removed large volumes of Iranian crude. But other oil exporters have more than compensated for any shortfall, filling global inventories & depressing prices. The fuel glut has combined with faltering investor sentiment in other asset classes, producing a bear market for oil. Stock
markets rebounded yesterday after Pres Trump's
administration attempted to shore up investor confidence. Data on the US market will appear in the next
couple of days with figures from the American Petroleum Institute today & a report from the Energy Information Administration tomorrow. A survey estimated that US crude inventories dropped 2.7M barrels in the last week.
Oil trims gains on glut, economy concerns
After taking a beating yesterday, the bears have returned in force. Much of the huge advance late it in the session may have been short covering (buying back earlier selling positions). But that is a short term phenomenon. Reality is back in force today as negative thinking by investors has returned. The only winners are "safe investments" (gold & Treasuries). Fundamental economic issues such as China trade issues & interest rate hikes are getting more attention.
Dow Jones Industrials
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