Thursday, January 31, 2019

Mixed markets after yesterday's giant rally

Dow fell 53, advancers over decliners 3-1 & NAZ jumped on 89 on earnings reports. The MLP index was flattish after recent gains to the 252s & the REIT index added 2+ to the 361s.  Junk bond funds fluctuated & Treasuries were bid higher taking the yield down on the 10 year Treasury by a large 5 basis points to 2.65%.  Oil went up to the 55s & gold soared 13 to 1339 (yet another multi month high) as Fed indicates rate hikes have been put on hold.

AMJ (Alerian MLP Index tracking fund)

CL=FCrude Oil54.96

GC=FGold   1,328.50

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Stocks traded mixed, pulling back slightly after yesterday's earnings & Fed-fueled rally.  In economic news, the number of Americans filing applications for unemployment benefits surged to near a 1½-year high last week, which could raise concerns that the labor market is slowing.  In Asian markets, China's Shanghai Composite gained 0.4% & Hong Kong's Hang Seng index finished the day up 1%.  Japan's Nikkei closed up 1.1%.  In Europe, London's FTSE added 0.5%, Germany's DAX slipped 0.5% & France's CAC was slightly higher.

Stocks trade mixed after huge rally

US & Chinese officials are reportedly in talks to set up a meeting between Pres Trump & Chinese Pres Xi Jinping for next month, according to several reports.  The possible meeting could take place right after a summit between Trump & North Korean leader Kim Jong Un & just before the US-China trade deal deadline.  Officials for both sides are currently meeting in DC in an effort to strike a deal.  Today, Trump tweeted about the discussions, saying that "meetings are going well with good intent & spirit on both sides."  "China does not want an increase in tariffs & feels they will do much better if they make a deal. They are correct," Trump added.

As trade truce deadline approaches, Trump, Xi could meet in February

Brutal cold that can cause frostbite within a few minutes continued to blast the Midwest & hit the Northeast today, snarling air travel & suspending package deliveries.  Airlines canceled more than 1400 flights today at Chicago's O'Hare Intl Airport, more than ½ of the daily schedule at the United Air Lines (UAL) & American Airlines (AAL) hub, as it was too cold for ramp workers to access & service many aircraft.  More than 40% of the scheduled 237 flights at Chicago Midway Intl Airport, were canceled.  Hundreds of other flights were canceled in Chicago yesterday due to the cold.  Temperatures at O'Hare at 5:30 AM. were minus 21 degrees Fahrenheit, with wind chills of 37 degrees below zero, the National Weather Service said.  Major airlines said they would waive date-change fees for travelers affected by the severe weather.  While aircraft can take generally take off in low temperatures, the bitter cold limits how long ground workers can remain loading baggage or servicing aircraft.  The low temperatures also curtailed some package deliveries in certain areas of the Midwest & Northeast.  The United States Postal Service suspended deliveries to some cities in the Midwest today "to ensure the safety and well-being of our employees."

Record cold grounds more than 1,500 flights, UPS, USPS suspend some deliveries

Negotiations on border security funding are underway in Congress as the threat of another gov shutdown looms large over Capitol Hill.  But Pres Trump, who has made it his key goal to secure funding toward a southern border barrier, appeared to be more pessimistic than ever about the outcome of the talks.  "Republicans on the Homeland Security Committee are wasting their time," Trump said in a tweet today.  "Democrats, despite all of the evidence, proof and Caravans coming, are not going to give money to build the DESPERATELY needed WALL."  "Wall is already being built, I don't expect much help!" he added.  The dismissive statement appeared to reference a bipartisan conference of 17 lawmakers in the House & Senate tasked with hashing out a deal to fund the gov.  The White House did not immediately respond to a request for clarification on the pres's tweet.  The pressure is on for the group of lawmakers, with about 2 weeks remaining on a self-imposed deadline before parts of the gov once again shut down.  Politicians on both sides of the aisle have made it clear they want to avoid at all costs another gov funding lapse, especially so soon after the record-shattering 35-day partial shutdown that was temporarily halted last Fri.  Trump is demanding that any long-term funding deal include &B$s toward the construction of a barrier along the US-Mexico border.  Dems have refused to put any money toward a wall have accused Trump, who once said he would be "proud" to shut down the gov in pursuit of a wall, of holding federal workers hostage to gain leverage in the debate.  Trump on Fri signed a temporary measure to reopen the full gov for 3 weeks.  The move came after polls showing more Americans blamed him for the shutdown than blamed Dems.  But he maintained after the bill signing that any deal must include new border wall funding — & renewed his threat to bypass Congress all together by declaring a national emergency if he doesn't get what he wants.  "In 21 days, if no deal is done, it's off to the races!" Trump tweeted.

Trump returns to hard-line stance on the wall as Congress works to avoid another shutdown

Stock buyers welcomed the earnings reports from the tech companies, but the rest of the market is digesting all that is going on.  The bitter cold weather is pinching business.  More importantly, trade talks with China are lumbering along while another gov shutdown is just 2 weeks away.  With both sides standing firm, it is difficult to see how congress can solve this crisis in such a short amount of time.  Gold buyers are encouraged, taking the precious metal's prices to levels not seen in months.

Dow Jones Industrials

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