Dow declined 83 (near session highs), advancers just ahead of decliners & NAZ went up 15. The MLP index was fractionally lower to the 257s & the REIT index pulled back 2+ to 381 on profit taking. Junk bond funds were mixed & Treasuries remained under selling pressure. Oil gained 1+ to the 64s (more below) & gold added 6 to 1297.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
In a paper published Fri, the St Louis Fed said the central bank's move to reduce the level of bonds on its balance sheet — "quantitative tightening" as it has become known — will not have any noticeable negative impact on growth. That runs directly counter to Trump's assertion the same day that the policy normalization process has "really slowed us down." "It is true that removing unusual monetary accommodation will likely result in less real activity & lower prices than otherwise, but the ongoing shrinkage of the Fed's balance sheet was not responsible for bearish asset markets in 2018, nor is it likely to significantly retard activity going forward," Fed economist Christopher J. Neely wrote. .The Fed has been allowing up to $50B a month in Treasuries & mortgage-backed securities to roll off what had once been a $4.5T balance sheet. However, the central bank announced in Mar that it would begin tapering the reduction in May & virtually end it altogether in Sep, after likely reducing the holdings by barely $1T. Trump not only called for the end of 'QT' but also said the Fed should consider another round of easing like it did in 3 stages during and after the financial crisis. The pres spoke shortly after the Labor Dept reported that nonfarm payrolls grew by a better than expected 196K in Mar & the unemployment rate remained at 3.8%, near a 50-year low. Despite the solid jobs report, questions remain about the durability of the Trump boom that saw GDP rise 2.9% during 2018. Trump has been a frequent Fed critic as the central bank has raised rates & moved to undo the historically easy monetary policy in place for much of the past decade. He has blamed the central bank for the Q4 stock market meltdown in 2018 & said growth would have been much faster without rate hikes, 4 of which came last year. "I personally think the Fed should drop rates," the pres said last Fri. "I think they've really slowed us down. There's no inflation. In terms of quantitative tightening, it should actually now be quantitative easing." However, Neely pushed back on the Trump's ideas about the future policy path, writing that "quantitative tightening will probably not affect the economy in any noticeable way." "The pace of the recent decline in the Fed's asset holdings, if such declines continue, would take at least 5 years to return to the pre-crisis trend," Neely said. "Such gradual effects contrast with the large, discrete asset price changes that immediately followed the original asset purchase announcements & reflected almost the whole expected near-term change in fundamentals."
Fed claps back at Trump over claims that monetary ‘tightening’ is hurting the eco…
The value of US wine exports sank nearly 5% to $1.47B in 2018, reflecting a strong $ retaliatory tariffs, an industry trade group announced. The weaker exports also follow increased "competition from foreign wine producers who are heavily subsidized by their governments and benefiting from free trade agreements in key markets," according to the San Francisco-based Wine Institute. "California wines performed well under very challenging circumstances as top markets continued to embrace our reputation for premium quality, leadership in sustainable wine growing and diverse offerings," said Robert Koch, CEO of the Wine Institute. The Golden State accounts for more than 90% of the nation's wine exports. Total export volume dipped more than 1% to 375M liters in 2018, with the volume of exports to China & Japan falling by double-digit percentages. Wine exports to China fell nearly 25% in value last year to $78.7M & 13% in volume compared with 2017, coming after China last year increased tariffs on US wines imported into mainland China. Effective last Sep, China in response to tariffs imposed by the administration of Pres Trump added a 10% duty on US wine imports on top of a previous 15% levy it implemented in Apr 2018. With the 2 duties, the total tax & tariff rates for US wine entering China jumped to nearly 80%. "The long-term prospects for California wine sales in China, however, remain very strong," said Christopher Beros, the Wine Institute's trade director for China & the Pacific Rim. Exports to Hong Kong were up 10% to $130M last year & up about 9% in volume. For years, Hong Kong has been seen as a "back door" for US wine to enter the mainland Chinese market because of lower import taxes. "Exports to Hong Kong are a bright spot," according to Beros. "Clearly some of these wines are being re-exported to other countries including mainland China." Meantime, US wine exports to Japan fell 22% & 1% in value to $93M. Australian, New Zealand & South American wines have given the US more competition in the Asian marketplace. "In 2018, U.S. wine exports to Asia experienced a softening compared to the healthy growth rates of the prior two years," Beros said. He added that exports to Vietnam, which is seen as a promising market for California wines, were up 51% from a small base. Elsewhere, exports to Canada, the largest single country market for American wine, were up 1% to $448.7M, but volume was down 11%. US wine exports to the 28-nation EU were down 15% to $469.4M last year while volume was up 3%.
US wine exports slipped about 5% in 2018, reflecting impact of retal…
Oil futures climbed, with US prices above $64 a barrel & marking the highest finish for a front-month contract since the end of Oct. Violence in Libya, combined with ongoing production cuts by OPEC & its allies & Us sanctions on Venezuela & Iran, fed expectations over tighter global crude supplies. May West Texas Intermediate oil rose $1.32 (2.1%) to settle at $64.40 a barrel.
This was a sluggish day for stocks as earnings season begins. Boeing (BA) led the selling in the Dow. with a drop of 17+ (4%) on news of production cutbacks. Techs did well, taking the NAZ higher. However the mood by traders is cautious. Everybody is worried about Q1 earnings & the outlook is not good. The Dow is up 500 from the mid Fed levels taking it near record levels, but the going has been tough. Meanwhile China trade talks drone on.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
White House Council of Economic Advisers Chairman Kevin Hassett said he's not worried about a recession hitting the US economy. “I got a bunch of models that give you recession odds and they're all at about zero right now.” US employers added 196K jobs in Mar, after a weak Feb. What’s more, Hassett also said that “the most important metric” is income growth & it’s “really taking off.” “You’ve
got the bottom 10 percent of the income distribution—their incomes are
growing north of 6 percent according to our latest estimate,” he added.
“If your income just went up 6 percent—then your consumption should go
up by about that this year and I think that that gives us a lot of
downside insurance for a bad year.”
Hassett: No chance of US recession
In a paper published Fri, the St Louis Fed said the central bank's move to reduce the level of bonds on its balance sheet — "quantitative tightening" as it has become known — will not have any noticeable negative impact on growth. That runs directly counter to Trump's assertion the same day that the policy normalization process has "really slowed us down." "It is true that removing unusual monetary accommodation will likely result in less real activity & lower prices than otherwise, but the ongoing shrinkage of the Fed's balance sheet was not responsible for bearish asset markets in 2018, nor is it likely to significantly retard activity going forward," Fed economist Christopher J. Neely wrote. .The Fed has been allowing up to $50B a month in Treasuries & mortgage-backed securities to roll off what had once been a $4.5T balance sheet. However, the central bank announced in Mar that it would begin tapering the reduction in May & virtually end it altogether in Sep, after likely reducing the holdings by barely $1T. Trump not only called for the end of 'QT' but also said the Fed should consider another round of easing like it did in 3 stages during and after the financial crisis. The pres spoke shortly after the Labor Dept reported that nonfarm payrolls grew by a better than expected 196K in Mar & the unemployment rate remained at 3.8%, near a 50-year low. Despite the solid jobs report, questions remain about the durability of the Trump boom that saw GDP rise 2.9% during 2018. Trump has been a frequent Fed critic as the central bank has raised rates & moved to undo the historically easy monetary policy in place for much of the past decade. He has blamed the central bank for the Q4 stock market meltdown in 2018 & said growth would have been much faster without rate hikes, 4 of which came last year. "I personally think the Fed should drop rates," the pres said last Fri. "I think they've really slowed us down. There's no inflation. In terms of quantitative tightening, it should actually now be quantitative easing." However, Neely pushed back on the Trump's ideas about the future policy path, writing that "quantitative tightening will probably not affect the economy in any noticeable way." "The pace of the recent decline in the Fed's asset holdings, if such declines continue, would take at least 5 years to return to the pre-crisis trend," Neely said. "Such gradual effects contrast with the large, discrete asset price changes that immediately followed the original asset purchase announcements & reflected almost the whole expected near-term change in fundamentals."
Fed claps back at Trump over claims that monetary ‘tightening’ is hurting the eco…
The value of US wine exports sank nearly 5% to $1.47B in 2018, reflecting a strong $ retaliatory tariffs, an industry trade group announced. The weaker exports also follow increased "competition from foreign wine producers who are heavily subsidized by their governments and benefiting from free trade agreements in key markets," according to the San Francisco-based Wine Institute. "California wines performed well under very challenging circumstances as top markets continued to embrace our reputation for premium quality, leadership in sustainable wine growing and diverse offerings," said Robert Koch, CEO of the Wine Institute. The Golden State accounts for more than 90% of the nation's wine exports. Total export volume dipped more than 1% to 375M liters in 2018, with the volume of exports to China & Japan falling by double-digit percentages. Wine exports to China fell nearly 25% in value last year to $78.7M & 13% in volume compared with 2017, coming after China last year increased tariffs on US wines imported into mainland China. Effective last Sep, China in response to tariffs imposed by the administration of Pres Trump added a 10% duty on US wine imports on top of a previous 15% levy it implemented in Apr 2018. With the 2 duties, the total tax & tariff rates for US wine entering China jumped to nearly 80%. "The long-term prospects for California wine sales in China, however, remain very strong," said Christopher Beros, the Wine Institute's trade director for China & the Pacific Rim. Exports to Hong Kong were up 10% to $130M last year & up about 9% in volume. For years, Hong Kong has been seen as a "back door" for US wine to enter the mainland Chinese market because of lower import taxes. "Exports to Hong Kong are a bright spot," according to Beros. "Clearly some of these wines are being re-exported to other countries including mainland China." Meantime, US wine exports to Japan fell 22% & 1% in value to $93M. Australian, New Zealand & South American wines have given the US more competition in the Asian marketplace. "In 2018, U.S. wine exports to Asia experienced a softening compared to the healthy growth rates of the prior two years," Beros said. He added that exports to Vietnam, which is seen as a promising market for California wines, were up 51% from a small base. Elsewhere, exports to Canada, the largest single country market for American wine, were up 1% to $448.7M, but volume was down 11%. US wine exports to the 28-nation EU were down 15% to $469.4M last year while volume was up 3%.
US wine exports slipped about 5% in 2018, reflecting impact of retal…
Oil futures climbed, with US prices above $64 a barrel & marking the highest finish for a front-month contract since the end of Oct. Violence in Libya, combined with ongoing production cuts by OPEC & its allies & Us sanctions on Venezuela & Iran, fed expectations over tighter global crude supplies. May West Texas Intermediate oil rose $1.32 (2.1%) to settle at $64.40 a barrel.
U.S. oil futures top $64 for highest finish since October
This was a sluggish day for stocks as earnings season begins. Boeing (BA) led the selling in the Dow. with a drop of 17+ (4%) on news of production cutbacks. Techs did well, taking the NAZ higher. However the mood by traders is cautious. Everybody is worried about Q1 earnings & the outlook is not good. The Dow is up 500 from the mid Fed levels taking it near record levels, but the going has been tough. Meanwhile China trade talks drone on.
Dow Jones Industrials
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