Dow dropped 220 (above session lows), decliners over advancers about 5-2 & NAZ sank 86. The MLP index tumbled 6+ to the 241s & the REIT index was off 2+ to the 364s. Junk bond funds did little & Treasuries had a solid advance. Oil gave back 1+ to the 52 on worries about increased supplies of oil (more below) & gold was steady at 1314.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Capitol Hill sounds hopeful about an agreement to prevent another gov shutdown. Where the White House stands is less certain. Alabama Sen Richard Shelby, the top Rep negotiator on a conference committee trying to keep government running past Feb 15 said that he expects a deal on border security funding by Mon. Shelby, the Senate Appropriations Committee chairman, made the comments after reportedly briefing Pres Trump on the talks. Despite his confidence, it is unclear whether Trump will back an agreement lawmakers reach. The pres has repeatedly pushed for Congress to approve $5.7B to build his proposed border wall. Dems have refused, but shown willingness to pass funds for other security measures such as technology, more personnel or repairing existing fencing. Congressional leaders are rushing to avoid a partial gov closure, after the wall dispute led to a record 35-day lapse in funding in parts of Dec & Jan. Top Reps & Dems have shown no appetite for another shutdown, even as Trump threatens to let funding lapse again. He has also warned that he could declare a national emergency to build the barrier without congressional approval, a move that numerous Senate Reps oppose. While a White House spokesman did not immediately respond for a comment, Congress appeared optimistic as negotiations on the bipartisan, bicameral conference committee continue. Appropriations Committee Vice Chairman Patrick Leahy, D-Vt., believes a deal "can be reached" as talks are still ongoing. Meanwhile, a House Dem aide said crafting a deal by Mon is feasible, adding that the negotiators want to strike an agreement "as quickly as possible." Congressional leaders clearly want to avoid another lapse in funding. The last closure led to 800K federal workers missing 2 paychecks & disrupted various government services. Voters largely pinned the blame for it on Trump, according to the polls. Yesterday, House Speaker Nancy Pelosi said flatly: "There will not be another shutdown." She added today that she has "confidence" in the lawmakers in charge of appropriations. Senate Majority Leader Mitch McConnell has also warned Trump against another shutdown.
Top GOP immigration negotiator says a deal to avoid another shutdown could come by Monday
A meeting between Pres Trump & Chinese Pres Xi Jinping is "highly unlikely" before the Mar 2 deadline for reaching a trade deal, according to a senior administration official. While Trump & Xi are still expected to meet, there's too much work to do to flesh out a deal with China & prepare Trump for a high-stakes meeting with North Korea's Kim Jong Un. Trump's summit with Kim is set for Feb 27-28. Trump & Xi may still meet "shortly thereafter" Mar 2, said the official. Later, Trump himself appeared to pour cold water on the idea that he could meet with Xi in an exchange with reporters. When asked whether he would meet the Chinese leader before Mar, Trump said: "Not yet." White House officials have advised against merging the issues of China & North Korea, despite China's invitation for Xi & Trump to meet immediately following the Kim summit. The administration official cautioned that the situation was fluid & that the status of the meeting could change after a trade delegation travels to Beijing next week. Trump's top economic advisor, Larry Kudlow, said that he expects Xi & Trump to meet, but that when & where it happens is still up in the air. Earlier, Kudlow said that there's a "pretty sizable distance" to go on a potential trade deal between the world's 2 largest economies. Trade Representative Robert Lighthizer has said he & Treasury Secretary Steve Mnuchin would make a recommendation to Trump on whether to agree to a summit after the 2 return from their trip to China next week. A delegation of US deputies will conduct talks beginning Mon, with Lighthizer & Mnuchin joining later in the week, according to a leaker.
Trump is ‘highly unlikely’ to meet Chinese President Xi before March trade deal deadline
Oil futures declined sharply, pressured by worries about energy demand, a stronger $ & reports that Libya could soon increase production. Natural-gas futures suffered an even bigger loss, settling at a 2-year low after a weekly tally of US supplies of the commodity fell less than expected. US benchmark Mar West Texas Intermediate crude oil fell $1.37 (2.5%) to settle at $52.64 a barrel, with prices based on the front-month contract down 4.7% week to date. Intl benchmark Apr Brent fell $1.06 (1.7%) to $61.63 a barrel. Meanwhile, a Libyan general took control yesterday of the country's largest oil field, the Sharara, raising the likelihood the facility will restart production. The added supply could bring more oil to the global market & put downward pressure on prices. The Sharara facilities, which can pump roughly 315K barrels a day of crude, were shut down late in 2018 after a group of armed gunmen took control of the field demanding better living conditions in the region. Libya, a member of OPEC, is currently exempt from the cartel's agreement to curb production due to the civil unrest that has plagued its oil industry & economy.
For the first time, consumer credit has risen above $4T, the Federal Reserve said. In Dec, the growth in consumer borrowing decelerated, but only slightly, to $16.6B, the Fed said. That's an annual growth rate of 5%, which is down from a 6.8% rate in Nov. The forecast called for a $17.5B gain. Revolving credit, like credit cards, rose 2% in Dec, after increasing by 5.6% in Nov & 11.7% in Oct. Nonrevolving credit, typically auto & student loans, rose 6% in Dec. For the year, credit card debt was up at a 2.75% pace while nonrevolving credit was up at a 5.5% pace. The data does not include mortgage loans. With low unemployment & steady income growth, consumers have been tapping into credit lines. The Fed reported earlier this week that banks are starting to tighten standards on credit cards. Before any alarm bells are sounded, it is important to note that overall consumer credit growth has been on a downward trend. Consumer credit increased 4.9% in 2018, down only slightly from a 5% pace as 2017 but well below the 7.2% gain in 2014 & the 7.1% pace in 2015.
The Dow sank 300 after the gloomy news on China Trade talks. Bulls went home until late in the session when they returned & trimmed losses. The volatility index (VIX) climbed 1 to the 16s when investors became more nervous about the future of the stock market. The bulls need favorable following winds to extend the 6 week market rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
White House economic adviser Larry Kudlow said that the US & China are still far from reaching a deal on trade, despite optimism that a meeting will occur between leaders of the 2 nations. “We’ve
got a pretty sizable distance to go here,” Kudlow said. “To quote a colleague of mine – ‘we have miles to go
before we sleep.’” The Dow plunged after Kudlow's comments. Kudlow
told reporters that Pres Trump
expects to meet with Chinese Pres Xi Jinping in an effort to iron
out a deal on trade, though the time & place are still unknown. The
world's 2 largest economies have been engaged in a trade
battle for nearly a year. The countries have slapped B$s worth of tariffs on each other's goods, though both sides agreed to a 90-day trade truce during the Group of 20 summit in late Dec. The White House said Mar 1 is a hard deadline to
reach an agreement on trade, & will hike tariffs on Chinese goods the
following day (as planned) if talks fail. Kudlow
said Treasury Secretary Steve Mnuchin & US Trade Representative
Robert Lighthizer will travel to China to continue discussions from the
previous week, describing them as having a “good vibe.” “Hopefully [the meetings] will go well,” he added. “Our varsity team is in there.” The
Trump administration has criticized China for its unfair trade
practices & has accused the country of stealing American intellectual
property & technology, both of which are at the heart of the trade
dispute. “We covered tremendous amount of
ground, and all the major issues, the technology issues the ownership
issues, especially, especially, especially the evaluation issues,”
Kudlow added about the meetings. As the trade
dispute progresses, China continues to experience a slowing rate of
growth that is affecting both its equity & auto markets. The Shanghei
Composite Index has fallen more than 24% over the past year. Vehicle
sales in the country fell 6% to 22.7M units last year,
according to the China Passenger Car Association.
US-China still 'miles' apart in trade talks, White House adviser says
Capitol Hill sounds hopeful about an agreement to prevent another gov shutdown. Where the White House stands is less certain. Alabama Sen Richard Shelby, the top Rep negotiator on a conference committee trying to keep government running past Feb 15 said that he expects a deal on border security funding by Mon. Shelby, the Senate Appropriations Committee chairman, made the comments after reportedly briefing Pres Trump on the talks. Despite his confidence, it is unclear whether Trump will back an agreement lawmakers reach. The pres has repeatedly pushed for Congress to approve $5.7B to build his proposed border wall. Dems have refused, but shown willingness to pass funds for other security measures such as technology, more personnel or repairing existing fencing. Congressional leaders are rushing to avoid a partial gov closure, after the wall dispute led to a record 35-day lapse in funding in parts of Dec & Jan. Top Reps & Dems have shown no appetite for another shutdown, even as Trump threatens to let funding lapse again. He has also warned that he could declare a national emergency to build the barrier without congressional approval, a move that numerous Senate Reps oppose. While a White House spokesman did not immediately respond for a comment, Congress appeared optimistic as negotiations on the bipartisan, bicameral conference committee continue. Appropriations Committee Vice Chairman Patrick Leahy, D-Vt., believes a deal "can be reached" as talks are still ongoing. Meanwhile, a House Dem aide said crafting a deal by Mon is feasible, adding that the negotiators want to strike an agreement "as quickly as possible." Congressional leaders clearly want to avoid another lapse in funding. The last closure led to 800K federal workers missing 2 paychecks & disrupted various government services. Voters largely pinned the blame for it on Trump, according to the polls. Yesterday, House Speaker Nancy Pelosi said flatly: "There will not be another shutdown." She added today that she has "confidence" in the lawmakers in charge of appropriations. Senate Majority Leader Mitch McConnell has also warned Trump against another shutdown.
Top GOP immigration negotiator says a deal to avoid another shutdown could come by Monday
A meeting between Pres Trump & Chinese Pres Xi Jinping is "highly unlikely" before the Mar 2 deadline for reaching a trade deal, according to a senior administration official. While Trump & Xi are still expected to meet, there's too much work to do to flesh out a deal with China & prepare Trump for a high-stakes meeting with North Korea's Kim Jong Un. Trump's summit with Kim is set for Feb 27-28. Trump & Xi may still meet "shortly thereafter" Mar 2, said the official. Later, Trump himself appeared to pour cold water on the idea that he could meet with Xi in an exchange with reporters. When asked whether he would meet the Chinese leader before Mar, Trump said: "Not yet." White House officials have advised against merging the issues of China & North Korea, despite China's invitation for Xi & Trump to meet immediately following the Kim summit. The administration official cautioned that the situation was fluid & that the status of the meeting could change after a trade delegation travels to Beijing next week. Trump's top economic advisor, Larry Kudlow, said that he expects Xi & Trump to meet, but that when & where it happens is still up in the air. Earlier, Kudlow said that there's a "pretty sizable distance" to go on a potential trade deal between the world's 2 largest economies. Trade Representative Robert Lighthizer has said he & Treasury Secretary Steve Mnuchin would make a recommendation to Trump on whether to agree to a summit after the 2 return from their trip to China next week. A delegation of US deputies will conduct talks beginning Mon, with Lighthizer & Mnuchin joining later in the week, according to a leaker.
Trump is ‘highly unlikely’ to meet Chinese President Xi before March trade deal deadline
Oil futures declined sharply, pressured by worries about energy demand, a stronger $ & reports that Libya could soon increase production. Natural-gas futures suffered an even bigger loss, settling at a 2-year low after a weekly tally of US supplies of the commodity fell less than expected. US benchmark Mar West Texas Intermediate crude oil fell $1.37 (2.5%) to settle at $52.64 a barrel, with prices based on the front-month contract down 4.7% week to date. Intl benchmark Apr Brent fell $1.06 (1.7%) to $61.63 a barrel. Meanwhile, a Libyan general took control yesterday of the country's largest oil field, the Sharara, raising the likelihood the facility will restart production. The added supply could bring more oil to the global market & put downward pressure on prices. The Sharara facilities, which can pump roughly 315K barrels a day of crude, were shut down late in 2018 after a group of armed gunmen took control of the field demanding better living conditions in the region. Libya, a member of OPEC, is currently exempt from the cartel's agreement to curb production due to the civil unrest that has plagued its oil industry & economy.
Oil logs sharp decline on energy demand risks and a possible boost to Libyan output
For the first time, consumer credit has risen above $4T, the Federal Reserve said. In Dec, the growth in consumer borrowing decelerated, but only slightly, to $16.6B, the Fed said. That's an annual growth rate of 5%, which is down from a 6.8% rate in Nov. The forecast called for a $17.5B gain. Revolving credit, like credit cards, rose 2% in Dec, after increasing by 5.6% in Nov & 11.7% in Oct. Nonrevolving credit, typically auto & student loans, rose 6% in Dec. For the year, credit card debt was up at a 2.75% pace while nonrevolving credit was up at a 5.5% pace. The data does not include mortgage loans. With low unemployment & steady income growth, consumers have been tapping into credit lines. The Fed reported earlier this week that banks are starting to tighten standards on credit cards. Before any alarm bells are sounded, it is important to note that overall consumer credit growth has been on a downward trend. Consumer credit increased 4.9% in 2018, down only slightly from a 5% pace as 2017 but well below the 7.2% gain in 2014 & the 7.1% pace in 2015.
U.S. consumer credit tops $4 trillion in December
The Dow sank 300 after the gloomy news on China Trade talks. Bulls went home until late in the session when they returned & trimmed losses. The volatility index (VIX) climbed 1 to the 16s when investors became more nervous about the future of the stock market. The bulls need favorable following winds to extend the 6 week market rally.
Dow Jones Industrials
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