Dow surged 324, advancers over decliners better than 3-1 & NAZ gained 34. The MLP index added 1 to the 251s & the REIT index went up 1+ to the 368s. Junk bond funds fluctuated & Treasuries were hit with more selling. Oil rose to the 55s & gold gained 4 to 1318.
AMJ (Alerian MLP Index tracking fund)
US & Chinese officials are slated to extend negotiations on a trade deal in DC, next week after talks in Beijing on Fri between top Trump aides & Pres Xi Jinping. “The United States looks forward to these further talks and hopes to see additional progress,” White House Press Secretary Sarah Sanders said. Any deal between the 2 countries would be reached via a “Memoranda of Understanding,” Sanders said, which would allow Trump to bypass Congress & avoid the difficulty he is currently facing in trying to get a separate trade deal with Canada & Mexico approved. And amid media reports suggesting a potential extension, the administration reiterated that Trump intends to increase previously imposed tariffs on $200B in Chinese products, up from 10-25%, if a deal is not reached. Trump has also indicated he will expand the duties to an additional $267B in imports, effectively covering all shipments from China. This week, Treasury Secretary Steve Mnuchin & Trade Representative Robert Lighthizer met with Xi, as well a delegation led by Vice Premier Liu He. The talks focused on “structural issues,” like forced technology transfer for US businesses trying to operate in China, intellectual property rights & nontariff barriers. The 2 sides also discussed “China’s purchase of US goods” to reduce the trade deficit between the nations. The White House previously said, however, that any trade deal would have to go beyond China buying more American products.
White House: US-China trade talks continue next week
Pres Trump is poised to sign a $333B bipartisan spending bill shortly, already approved by Congress, to fund several key federal agencies, punting any chance of another partial-gov shutdown until Oct. After weeks of negotiations, congressional leaders agreed this week to a spending measure for the Dept of Homeland Security that includes $1.375B for a physical barrier along the US-Mexico border. It also includes spending measures for 7 less controversial agencies: Agriculture, Commerce, Justice, Interior, State, Transportation & Housing & Urban Development. Notably, the spending bill does not include back pay for federal contractors who weren't receiving paychecks as a result of the longest gov shutdown in history. Although Dems & some Reps pushed for that to be included, the White House has been reluctant to pay contractors, generally custodial & service workers, for work they didn't do. The 1159 page document was released Wed night which includes. It includes $1.375B for “primary pedestrian fencing” along the Southern border – a fraction of the $5.7B Trump initially demanded. However, it limits the type of border wall designs that the Trump administration has previously explored, meaning Trump won't be allowed to use the prototypes previously built. The bill would also fund a yearly average of 45K detention beds, a 12% increase over the levels funded in last year's bill. Also included in the bill is the allocation of $414M to address humanitarian concerns at the border. a push by Dems, & $77M to counter opioids & $564M for land port-of-entry drug & contraband inspection equipment. One of the major domestic priorities secured in the bill includes a $1.2B increase for infrastructure spending. That breaks down to about $725M for highway & bridges; $300M for a new port infrastructure program & $150M for bus & rail improvements.
Consumer sentiment surges higher than expected after government shutdown ends
The chaos in DC calmed down, at least awhile, with approval for gov funding thru Sep. But more battles like ahead. China trade talks are getting the most attention & a lot of work remains. This should be the 8th straight weekly gain for stocks (shown below) & that is scrary for those who would like to see a correction phase. However for the time being, the Dow only needs another 1K to record a new record. Hard to believe.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 55.28 | +0.87 | +1.6% |
| GC=F | Gold | 1,320.00 | +6.10 | +0.5% |
Stocks were trading higher as progress was reported in this week's trade meeting between US & Chinese officials. Talks
will continue next week in DC. White House Press Secretary
Sarah Sanders said the 2 economic superpowers "will
continue working on all outstanding issues in advance of the March 1,
2019, deadline." Investors are also keeping an eye on DC as a Fri midnight
deadline remains for a spending bill to be signed by Pres Trump
that will avert another partial-gov shutdown. Yesterday, Senate Majority Leader Mitch
McConnell said the pres will sign the bill, but also declare a
national emergency &d move forward with construction of his
campaign-promised border wall. In economic
news, the Federal Reserve said that manufacturing production
slumped 0.9% last month. The expectation was for output to rise
0.1%. In Asian markets, China's Shanghai
composite fell 1.9% for the day, but rose 2.5% for the
week. Hong Kong's hang Seng fell the same 1.9% for the session on
lackluster Chinese economic data & the Hang Seng lost 0.2% for
the week. Japan's Nikkei fell 1.1%, but added 2.8% for the
week. In Europe, London's FTSE rose 0.7%, Germany's DAX gained 1.8% & France's CAC was up 1.7%.
Stocks trade higher on China-US talks optimism
US & Chinese officials are slated to extend negotiations on a trade deal in DC, next week after talks in Beijing on Fri between top Trump aides & Pres Xi Jinping. “The United States looks forward to these further talks and hopes to see additional progress,” White House Press Secretary Sarah Sanders said. Any deal between the 2 countries would be reached via a “Memoranda of Understanding,” Sanders said, which would allow Trump to bypass Congress & avoid the difficulty he is currently facing in trying to get a separate trade deal with Canada & Mexico approved. And amid media reports suggesting a potential extension, the administration reiterated that Trump intends to increase previously imposed tariffs on $200B in Chinese products, up from 10-25%, if a deal is not reached. Trump has also indicated he will expand the duties to an additional $267B in imports, effectively covering all shipments from China. This week, Treasury Secretary Steve Mnuchin & Trade Representative Robert Lighthizer met with Xi, as well a delegation led by Vice Premier Liu He. The talks focused on “structural issues,” like forced technology transfer for US businesses trying to operate in China, intellectual property rights & nontariff barriers. The 2 sides also discussed “China’s purchase of US goods” to reduce the trade deficit between the nations. The White House previously said, however, that any trade deal would have to go beyond China buying more American products.
White House: US-China trade talks continue next week
Pres Trump is poised to sign a $333B bipartisan spending bill shortly, already approved by Congress, to fund several key federal agencies, punting any chance of another partial-gov shutdown until Oct. After weeks of negotiations, congressional leaders agreed this week to a spending measure for the Dept of Homeland Security that includes $1.375B for a physical barrier along the US-Mexico border. It also includes spending measures for 7 less controversial agencies: Agriculture, Commerce, Justice, Interior, State, Transportation & Housing & Urban Development. Notably, the spending bill does not include back pay for federal contractors who weren't receiving paychecks as a result of the longest gov shutdown in history. Although Dems & some Reps pushed for that to be included, the White House has been reluctant to pay contractors, generally custodial & service workers, for work they didn't do. The 1159 page document was released Wed night which includes. It includes $1.375B for “primary pedestrian fencing” along the Southern border – a fraction of the $5.7B Trump initially demanded. However, it limits the type of border wall designs that the Trump administration has previously explored, meaning Trump won't be allowed to use the prototypes previously built. The bill would also fund a yearly average of 45K detention beds, a 12% increase over the levels funded in last year's bill. Also included in the bill is the allocation of $414M to address humanitarian concerns at the border. a push by Dems, & $77M to counter opioids & $564M for land port-of-entry drug & contraband inspection equipment. One of the major domestic priorities secured in the bill includes a $1.2B increase for infrastructure spending. That breaks down to about $725M for highway & bridges; $300M for a new port infrastructure program & $150M for bus & rail improvements.
Congress passes bill to avoid shutdown: Here's what it includes
Consumer sentiment gained more than expected in
early Feb as US spending confidence recovered after the end of
the longest gov shutdown in history. The Univ of Mich consumer
sentiment index rose to 95.5 this month from 91.2 in Jan,
preliminary data showed. The forecast calleld for the
index to rise to 93. "The early February gains
reflect the end of the partial government shutdown as well as a more
fundamental shift in consumer expectations due to the Fed's pause in
raising interest rates," said Richard Curtin, chief economist for the
Surveys of Consumers. "The lingering impact of the
shutdown was responsible for some of the negative economic evaluations,
and, at the time that these interviews were conducted, uncertainty about
whether a second shutdown would occur continued to have a slight
depressing impact on confidence," Curtin added. Pres Trump temporarily ended the record long government shutdown on Jan 25,
resolving the grueling 35-day closure. Yesterday, Congress passed
legislation to avoid another gov shutdown & the pres plans to sign the proposal & declare a national emergency in an attempt to fund the wall. Optimism toward a gov funding resolution, along with China trade hopes, boosted the stock market with the S&P 500 rising more than 2% this month so far. The consumer sentiment
data indicate that personal consumption expenditures will remain the
strongest sector in the national economy in 2019, Curtin pointed out.
Consumer sentiment surges higher than expected after government shutdown ends
The chaos in DC calmed down, at least awhile, with approval for gov funding thru Sep. But more battles like ahead. China trade talks are getting the most attention & a lot of work remains. This should be the 8th straight weekly gain for stocks (shown below) & that is scrary for those who would like to see a correction phase. However for the time being, the Dow only needs another 1K to record a new record. Hard to believe.
Dow Jones Industrials
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