Dow advanced another 190, advancers over decliners about 2-1 & NAZ rose 30. The MLP index added 2+ to the 247s & the REIT index pulled back 3 to the 365s. Junk bond funds fluctuated & Treasuries drifted lower. Oil went up 1+ to the 54s on reports of supply cuts & gold also gained, up 6 to 1320.
AMJ (Alerian MLP Index tracking fund)
Manufacturing companies urge Congress to pass comprehensive immigration reform
With a little more than 2 days to spare before funding lapses for the 2nd time since Dec, confusion reigned today. Congress hurried to hash out text for spending legislation, as a few remaining snags reportedly delayed a final plan's release. News outlets say Pres Trump is expected to sign what lawmakers pass, even as the pres & his administration stress that he wants to see legislation before backing it. Yesterday, the pres said he was "not happy" with the agreement but did not expect another shutdown. Still, a confusing rush to keep the gov running looks likely in the coming days. About a ¼ of the gov will shut down if lawmakers fail to beat a midnight Fri deadline. At stake are the paychecks of about 800K gov workers already battered from the last funding lapse, along with crucial gov services such as food inspections & air traffic control. While Trump is likely to sign the spending measure, which puts about $1.4B toward physical barriers on the US-Mexico barrier, it has been reported, the pres has changed his mind in the past. He did so before the start of a record 35-day shutdown during Dec & Jan. As part of this week's tentative deal, lawmakers allocated only a fraction of the $5.7B Trump demanded for his proposed border barriers. Today, White House press secretary Sarah Huckabee Sanders would not commit to the pres signing the legislation. "Look, we'll see what the final package looks like, but like you said and like the president himself said yesterday, he's not happy about it, but he's gonna get the job done no matter what. He's got alternative options [to build the wall] and he's gonna keep those on the table," she said. Still, House Speaker Nancy Pelosi showed optimism about avoid a shutdown today. Entering a Dem caucus meeting, she said, "I think we're in a pretty good place." Trump showed signs of accepting the deal last night after Senate Appropriations Committee Chairman Sen Richard Shelby briefed him on the proposal. The pres downplayed the lack of funding he sought for his proposed border wall. He claimed he would allocate money from other parts of the gov for the project. "Regardless of Wall money, it is being built as we speak!" Trump tweeted. Trump's desire to wait until Congress releases a bill poses its own problems. Appropriators drawing up final legislative text ran into several issues last night. Among the sticking points is the language allocating $1.375B for barriers, a potential provision to guarantee back pay to federal contractors affected by the last shutdown & the extension of the Violence Against Women Act. News outlet cautioned that "these problems might very well be solved." Shelby's office stressed that negotiators are hashing out final details, which is typical for sprawling legislation.
Confusion reigns as Trump and Congress scramble to dodge another shutdown
The trade deal US negotiators are seeking will have some teeth in case China goes back on its trade promises, as it has in the past. A top priority for Treasury Secretary Steve Mnuchin &.Trade Representative Robert Lighthizer, who are set to hold talks this week with Vice Premier Liu He, is to put in place an automatic tariff mechanism that would raise duties on Chinese goods if its exports to the US keep rising, according to leakers. China has a history of not living up to its trade obligations. When China joined the World Trade Organization in 2001, it made a promise to allow foreigners to access its banking & telecommunication markets. However, to this day, it hasn't let any foreign company step in. American negotiators want to make sure China will face some punishment if it repeats this behavior. The mechanism is not a new idea. It was put in place in 2001 when China joined the WTO, & Pres Obama used it in 2009 to impose tariffs on Chinese tire imports when the US market was disrupted. But China retaliated with duties on cars & poultry. The rule expired in 2013. American negotiators now seek to make China enforce its earlier promises & make a pledge on issues like protecting intellectual property & limiting government subsidies to exporters. Pres Trump has softened his stance on the trade battle with China, saying he's open to letting the deadline slide if the 2 sides can reach a trade deal soon. The Mar 2 deadline is crucial in the negotiations as US tariffs on Chinese goods will increase if a deal is not struck before then. The stock market has risen this week as the 2 countries came closer to a comprehensive trade agreement. Trump's potentially postponing the Mar deadline also added to the optimism. When asked how the trade meetings in Beijing went yesterday, Mnuchin said "so far, so good."
The US reportedly wants to put automatic tariffs in place to keep China in line with any trade deal
Amidst all the confusion, the bulls have taken control of the stock market. As shown in the chart below, the Dow has risen almost an astonishing 4K since the Christmas evening low without significant hiccups along the way. The volatility index is in the 15s, only modestly above the "good old days" when the market was in a rally mode. However another shutdown is possible, just 2 days away, while the trade talks, which are huge either way, need a lot more work. This can be very tough for timid inverters to understand & they continue to buy gold as a hedge.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 53.98 | +0.88 | +1.7% |
| GC=F | Gold | 1,316.40 | +2.40 | +0.2% |
A group of top manufacturers is launching a new
push to convince Congress to pass comprehensive immigration reform that
would protect those individuals who were brought to the country
illegally as children, provide a pathway to legal status for the Ms of undocumented migrants here now & overhaul the existing
system to ensure US businesses can attract & retain the necessary
foreign talent. The proposal — to be unveiled
on today by the National Association of Manufacturers (NAM) — comes as
Congress & the White House flirt with another gov shutdown over
Pres Trump's demands for a border wall, as well as Dems
insistence that the US reduce its use of detention beds for those who
travel here illegally. “America has now endured two government shutdowns
brought on by different disagreements over immigration, illustrating how
divisive this debate has become,” said NAM CEO Jay
Timmons. “Manufacturers are in the business of building bridges and
creating solutions, so with our leaders in desperate need of a way
forward on essential immigration and border security reforms, we
are releasing a detailed, pragmatic approach.” Other
top industry groups, including the Chamber of Commerce, have also
been lobbying Congress to pass an immigration reform package. While
several attempts have been made, most recently a series of votes in the
Senate on several proposals that all failed, it remains an elusive
goal for lawmakers on both sides of the aisle. It's
unclear whether a divided gov, with Dems in control of the
House & Reps the Senate & White House, will be able to come
to agreement on any sweeping package. Trump has
also made the debate more difficult, offering conflicting views of what
he will support & doubling-down on controversial policies that are
viewed as nonstarters by Dems. His openness to a reform package,
however, help spur advanced talks between both parties in 2018 that
eventually broke down. The proposal from NAM
seeks to strike a middle-ground, providing a potential pathway to
citizenship for the Dreamers & a route to legal status for
the Ms of undocumented individuals in the U.S currently, while
also increasing federal funding for border security, including walls,
fencing & surveillance technology. It also
calls for reforms to the legal immigration system. Most notably,
eliminating the ability of siblings of adult US citizens to enter via
family-based immigration, mandating a % of overall visas be
employment focused & eliminating the visa lottery system, a key goal
of the Trump administration. Additionally, the
group is urging Congress to increase the number of available H-1B visas,
a controversial program that allows US companies to provide temporary
employment to foreign workers.
Manufacturing companies urge Congress to pass comprehensive immigration reform
With a little more than 2 days to spare before funding lapses for the 2nd time since Dec, confusion reigned today. Congress hurried to hash out text for spending legislation, as a few remaining snags reportedly delayed a final plan's release. News outlets say Pres Trump is expected to sign what lawmakers pass, even as the pres & his administration stress that he wants to see legislation before backing it. Yesterday, the pres said he was "not happy" with the agreement but did not expect another shutdown. Still, a confusing rush to keep the gov running looks likely in the coming days. About a ¼ of the gov will shut down if lawmakers fail to beat a midnight Fri deadline. At stake are the paychecks of about 800K gov workers already battered from the last funding lapse, along with crucial gov services such as food inspections & air traffic control. While Trump is likely to sign the spending measure, which puts about $1.4B toward physical barriers on the US-Mexico barrier, it has been reported, the pres has changed his mind in the past. He did so before the start of a record 35-day shutdown during Dec & Jan. As part of this week's tentative deal, lawmakers allocated only a fraction of the $5.7B Trump demanded for his proposed border barriers. Today, White House press secretary Sarah Huckabee Sanders would not commit to the pres signing the legislation. "Look, we'll see what the final package looks like, but like you said and like the president himself said yesterday, he's not happy about it, but he's gonna get the job done no matter what. He's got alternative options [to build the wall] and he's gonna keep those on the table," she said. Still, House Speaker Nancy Pelosi showed optimism about avoid a shutdown today. Entering a Dem caucus meeting, she said, "I think we're in a pretty good place." Trump showed signs of accepting the deal last night after Senate Appropriations Committee Chairman Sen Richard Shelby briefed him on the proposal. The pres downplayed the lack of funding he sought for his proposed border wall. He claimed he would allocate money from other parts of the gov for the project. "Regardless of Wall money, it is being built as we speak!" Trump tweeted. Trump's desire to wait until Congress releases a bill poses its own problems. Appropriators drawing up final legislative text ran into several issues last night. Among the sticking points is the language allocating $1.375B for barriers, a potential provision to guarantee back pay to federal contractors affected by the last shutdown & the extension of the Violence Against Women Act. News outlet cautioned that "these problems might very well be solved." Shelby's office stressed that negotiators are hashing out final details, which is typical for sprawling legislation.
Confusion reigns as Trump and Congress scramble to dodge another shutdown
The trade deal US negotiators are seeking will have some teeth in case China goes back on its trade promises, as it has in the past. A top priority for Treasury Secretary Steve Mnuchin &.Trade Representative Robert Lighthizer, who are set to hold talks this week with Vice Premier Liu He, is to put in place an automatic tariff mechanism that would raise duties on Chinese goods if its exports to the US keep rising, according to leakers. China has a history of not living up to its trade obligations. When China joined the World Trade Organization in 2001, it made a promise to allow foreigners to access its banking & telecommunication markets. However, to this day, it hasn't let any foreign company step in. American negotiators want to make sure China will face some punishment if it repeats this behavior. The mechanism is not a new idea. It was put in place in 2001 when China joined the WTO, & Pres Obama used it in 2009 to impose tariffs on Chinese tire imports when the US market was disrupted. But China retaliated with duties on cars & poultry. The rule expired in 2013. American negotiators now seek to make China enforce its earlier promises & make a pledge on issues like protecting intellectual property & limiting government subsidies to exporters. Pres Trump has softened his stance on the trade battle with China, saying he's open to letting the deadline slide if the 2 sides can reach a trade deal soon. The Mar 2 deadline is crucial in the negotiations as US tariffs on Chinese goods will increase if a deal is not struck before then. The stock market has risen this week as the 2 countries came closer to a comprehensive trade agreement. Trump's potentially postponing the Mar deadline also added to the optimism. When asked how the trade meetings in Beijing went yesterday, Mnuchin said "so far, so good."
The US reportedly wants to put automatic tariffs in place to keep China in line with any trade deal
Amidst all the confusion, the bulls have taken control of the stock market. As shown in the chart below, the Dow has risen almost an astonishing 4K since the Christmas evening low without significant hiccups along the way. The volatility index is in the 15s, only modestly above the "good old days" when the market was in a rally mode. However another shutdown is possible, just 2 days away, while the trade talks, which are huge either way, need a lot more work. This can be very tough for timid inverters to understand & they continue to buy gold as a hedge.
Dow Jones Industrials
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