Dow fell 20, decliners over advancers 4-3 & NAZ lost 21. The MLP index dropped 2+ to the 246s & REIT index fell 1+ to the 364s on profit taking. Junk bond funds drifted lower & Treasuries declined in price. Oil crawled higher in the 57s & gold fell 5 to 1315.
AMJ (Alerian MLP Index tracking fund)
Stocks pare earlier losses on better-than-expected 4Q GDP
The summit between Pres Trump & North Korean leader Kim Jong Un ended earlier than expected without an agreement due to North Korean demands to lift US-led sanctions. Earlier, both Trump & Kim had expressed hope for progress on improving relations & on the key issue of denuclearization, in their talks in the Vietnamese capital, Hanoi. "Basically, they wanted the sanctions lifted in their entirety, but we couldn't do that ... we had to walk away from it," Trump told reporters after the summit. Both leaders left the venue of their talks without attending a planned lunch together. The UN & the US ratcheted up sanctions on North Korea when the reclusive state undertook a series of nuclear & missile tests in 2017, cutting off a cash supply. While Trump had said he was in "no rush" to strike a deal with North Korea & wanted to do the right deal with Kim. The White House had been confident enough to schedule a now canceled "joint agreement signing ceremony" at the conclusion of talks.
US Trade Representative Robert Lighthizer said the US is working towards formally abandoning plans to hike tariffs on Chinese goods from 10-25%. The report said those plans would be shelved as long as the 2 countries continue talking, marking the clearest signal that a trade deal between them could be on the horizon. Originally, the US planned on hiking tariffs on $200B worth of Chinese goods if a deal could not be reached by Sat. Lighthizer made those remarks following his testimony to the House Ways & Means Committee. He testified that China needs to do more than just buy additional US goods for the 2 countries to strike a trade deal & also said that "much still needs to be done both before an agreement is reached and, more importantly, after it is reached, if one is reached."
The US is no longer threatening to jack up tariffs on China, the clearest sign a trade deal is close
There is a lot for traders to assess. The abrupt end to the North Korean talks was not expected, but the GDP data came in reasonably good. And the China trade talks may be making progress, although that situation is difficult to understand, even for the negotiators. Trading in the PM could be choppy as more news is released on these stories.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 57.03 | +0.09 | +0.2% |
| GC=F | Gold | 1,320.10 | -1.10 | -0.1% |
Stocks pared declines as the US economy grew
by a rate of 2.6% this winter, beating estimates of
2.3% thanks to solid consumer & business spending. Stocks
declined originally after the summit between Pres Trump & North
Korea's leader Kim Jung-Un was cut short without the 2 making a deal. North Korea had demanded that US-led sanctions be lifted. In 2018, the GDP increased by an estimated 2.9% (compared to 2.2% in 2017), narrowly missing the Trump
administration's goal of 3% growth for the year. Earlier,
both Trump & Kim had expressed hope for progress on improving
relations & on the key issue of denuclearization in their talks. "Basically,
they wanted the sanctions lifted in their entirety, but we couldn't do
that ... we had to walk away from it," Trump told reporters after summit
talks were cut short. In Asian markets, China's Shanghai fell 0.4%, Hong Kong's Hang Seng was also down 0.4% & Japan's Nikkei was off 0.8%. In
European markets, London's FTSE traded lower by 0.6%, Germany's
DAX slipped lower & France's CAC was also off a tad.
Stocks pare earlier losses on better-than-expected 4Q GDP
The US economy grew by a rate of 2.6% this winter, beating the estimates
of 2.3% thanks to solid consumer & business spending. It also bested GDPNow,
a real-time tracker monitored by the Federal Reserve Bank of Atlanta,
which lowered its estimate to 1.8% earlier this week, largely
because of a grim outlook for retail sales which took a hit, in part,
due to the gov shutdown. Release of Q4 GDP by the Bureau of Economic Analysis (BEA) was delayed
by almost one month as a result of the partial gov
shutdown. In 2018,
the GDP increased by an estimated 2.9% (compared to 2.2% in 2017), narrowly missing the Trump administration's goal of 3%
growth for the year. In the middle of Feb, US retail sales
recorded their biggest drop in more than 9 years, spurring fears
about an economic slowdown & a drop in consumer spending at the end of
2018. According to the Commerce Dept, retail sales fell by 1.2% , the largest decline since Sep 2009, when the US was
still recovering from the recession. The
BEA generally provides 3 estimates of the GDP for each qtr;
however, they will only provide 2 readings this qtr. The final
reading remains on track for Mar 28. In the Jul-Sep period, the US economy grew by 3.4%.
US economy grew at 2.6% rate in fourth quarter
The summit between Pres Trump & North Korean leader Kim Jong Un ended earlier than expected without an agreement due to North Korean demands to lift US-led sanctions. Earlier, both Trump & Kim had expressed hope for progress on improving relations & on the key issue of denuclearization, in their talks in the Vietnamese capital, Hanoi. "Basically, they wanted the sanctions lifted in their entirety, but we couldn't do that ... we had to walk away from it," Trump told reporters after the summit. Both leaders left the venue of their talks without attending a planned lunch together. The UN & the US ratcheted up sanctions on North Korea when the reclusive state undertook a series of nuclear & missile tests in 2017, cutting off a cash supply. While Trump had said he was in "no rush" to strike a deal with North Korea & wanted to do the right deal with Kim. The White House had been confident enough to schedule a now canceled "joint agreement signing ceremony" at the conclusion of talks.
US-N. Korea summit ends abruptly with no deal
US Trade Representative Robert Lighthizer said the US is working towards formally abandoning plans to hike tariffs on Chinese goods from 10-25%. The report said those plans would be shelved as long as the 2 countries continue talking, marking the clearest signal that a trade deal between them could be on the horizon. Originally, the US planned on hiking tariffs on $200B worth of Chinese goods if a deal could not be reached by Sat. Lighthizer made those remarks following his testimony to the House Ways & Means Committee. He testified that China needs to do more than just buy additional US goods for the 2 countries to strike a trade deal & also said that "much still needs to be done both before an agreement is reached and, more importantly, after it is reached, if one is reached."
The US is no longer threatening to jack up tariffs on China, the clearest sign a trade deal is close
There is a lot for traders to assess. The abrupt end to the North Korean talks was not expected, but the GDP data came in reasonably good. And the China trade talks may be making progress, although that situation is difficult to understand, even for the negotiators. Trading in the PM could be choppy as more news is released on these stories.
Dow Jones Industrials
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