Dow went up 57, advancers over decliners better than 3-2 & NAZ gained 39. The MLP index added 1 to the 248s. Junk bond funds were purchased & Treasuries slid lower in price. Oil crawled higher in the 53s & gold was off a tad to 1328.
AMJ (Alerian MLP Index tracking fund)
Dow stocks head for a seventh straight session of gains
US producer prices increased solidly for a 2nd straight month in May, boosted by a surge in the cost of hotel accommodation & gains in a range of other services, pointing to a steady pickup in underlying inflation pressures. The report from the Labor Dept likely supports the Federal Reserve's view that the recent weak inflation readings are probably transitory. Fed policymakers are scheduled to meet on Jun 18-19 against the backdrop of rising trade tensions, slowing growth & a sharp step-down in hiring in May that have led financial markets to price in at least 2 interest rate cuts by the end of 2019. Fed Chairman Jerome Powell said last week that the central bank was closely monitoring the implications of the trade tensions on the economy & would "act as appropriate to sustain the expansion." A rate cut is, however, not expected next Wed. Producer prices excluding food, energy & trade services rose 0.4% last month, matching Apr's gain. The PPI increased 2.3% in the 12 months through May after rising 2.2% in Apr. Weaker energy & food prices, however, partially offset the increase in services last month. That led the producer price index for final demand to edge up 0.1% in May after gaining 0.2% in Apr. In the 12 months thru May, the PPI climbed 1.8%, slowing from the Apr 2.2% advance. The had forecast was for the PPI to nudge up 0.1% in May & rise 2.0% on a year-on-year basis. Treasury yields ticked up & the $ rose to a session high against a basket of currencies after the release of the data. Stock index futures were also trading higher. The services-led increase in the core PPI last month is likely to translate into a slightly higher reading for other underlying inflation measures in May. Core consumer prices are expected to have increased 0.2% last month after nudging up 0.1% in Apr. The Fed's preferred inflation measure, the core personal consumption expenditures (PCE) price index, increased 1.6% in the year to Apr after gaining 1.5% in Mar.
Underlying U.S. producer inflation pushing higher
Commerce Secretary Wilbur Ross predicted that the US & China will successfully negotiate a trade deal. “Eventually, this will end in negotiation,” Ross said. “Even shooting wars end in negotiations.” With questions circulating about whether Pres Trump & Chinese leader Xi Jinping would meet on trade at the G-20 meeting later this month, the pres said he would place additional tariffs on Chinese goods if Xi does not attend. “The China deal is going to work out. You know why? Because of tariffs,” Trump said. “Right now, China is getting absolutely decimated by companies that are leaving China, going to other countries, including our own, because they don’t want to pay the tariffs. Ross, who has spoken out in favor of Trump's tariff strategy, warned that trade deals are not made at summits. He said any talks between Trump & Xi would lay the groundwork for a possible agreement. In May, Trump increased tariff rates on $200B worth of Chinese goods & threatened to put levies on another $300B, effectively the rest of China’s imports in the US. An agreement with China would have to fix all the violations that the US alleges, otherwise making a deal would not make any sense, said Ross. “Either we will collect more and more tariffs on more and more products or we’ll back an arrangement with them,” Ross added, while warning investors not to get too “trigger happy” when Trump threatens tariffs. After the pres warned Mexico on May 30 that he would put a 5% tariff on all Mexican goods if they did not take actions to help curb undocumented migrants from coming into the US, Ross said that “people were getting hysterical” & the markets got “a little too jumpy.” The day after the proposed tariffs were announced, the Dow plunged more than 350 points. “Judge this administration by results,” Ross said. “Don’t judge it by interim soundbites.” Late Fri, the pres called off the Mexico tariffs, saying the US & Mexico agreed to follow thru on earlier concessions it had made on immigration.
Commerce secretary predicts a Trump-China trade deal — ’even shooting wars end in ne…
Stocks would like to extend the May rally, but the popular averages are being hit with selling. The Dow is up 1.3K in May, but selling continues with the Dow 100 below earlier highs.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 53.62 | +0.36 | +0.7% |
| GC=F | Gold | 1,327.70 | -1.60 | - 0.1% |
Stocks continued to rise on the back of easing
tensions surrounding trade tariffs & signs of more fiscal stimulus
from China. The Dow is heading to a 7th straight winning session. Producer prices excluding food, energy & trade
services rose 0.4% last month, the gov said. The PPI increased 2.3% in the 12 months thru May after
rising 2.2% in Apr. Weaker
energy & food prices, partially offset the increase in services last
month. That led the producer price index for final demand to edge up 0.1% in May after gaining 0.2% in Apr. In Asia, Chinese markets jumped as the gov
took measures to boost the economy, namely easing financial rules to
help with local spending on public works. The
Shanghai Composite added 2.6%. Hong Kong's Hang Seng rose 0.8% & Japan's Nikkei ended the day rising 0.3%. In
European trading, Britain's FTSE 100 was up 0.6%, France's CAC
40 added 0.9% & Germany's DAX climbed 1.4% after being
closed for a holiday yesterday.
Dow stocks head for a seventh straight session of gains
China is promising to “fight to the end” if the US escalates tensions in their ongoing trade war as Pres Trump edges closer to deciding whether to impose tariffs on another $300B worth of Chinese goods. Chinese
Foreign Ministry spokesman Geng Shuang said China is willing to
negotiate with the US if both sides are willing to come to a fair
agreement but said it was “not afraid of fighting a trade war." “China
does not want to fight a trade war, but we are not afraid of fighting a
trade war,” Geng said. “If the United States only wants to escalate
trade frictions, we will resolutely respond and fight to the end.” Geng stopped short of confirming whether Chinese
Pres Xi Jinping will meet with Trump when both leaders head to
Osaka, Japan for the G-20 summit in late Jun. He said information about
a possible meeting would be released when it was available. "We
note that for some time, the U.S. has made multiple public statements
that it looks forward to a meeting between the two heads of state during
the G-20 Osaka Summit," Geng told reporters. "We will
release information on this when we have it." Trump has said he would meet with his Chinese
counterpart at the summit, while Treasury Secretary Steve Mnuchin
also said over the weekend that any major progress to resolve
the trade war will come during the leaders' meeting. The
pres said yesterday that
if Xi doesn't meet with him at the Osaka summit later this month, more
U.S. tariffs on Chinese exports will go into effect. Trump told
reporters last week that “a lot of interesting things are happening”
during talks with China, but said he could impose tariffs on “at least”
another $300B worth of goods. Trade tensions escalated last
month when Trump increased tariffs on $200B worth of Chinese
imports to 25%. China responded by increasing tariffs on $60B worth of American products that went into effect earlier this
month. The US then raised the stakes by
placing Chinese telecom giant Huawei on a blacklist that effectively
bars US companies from supplying it with computer chips, software &
other components without gov approval. Chinese state media has also warned that Beijing could cut the U.S. off from rare earth minerals that are widely used in electric cars & mobile phones.
China vows to ‘fight to the end’ in trade war if US escalates tensions
US producer prices increased solidly for a 2nd straight month in May, boosted by a surge in the cost of hotel accommodation & gains in a range of other services, pointing to a steady pickup in underlying inflation pressures. The report from the Labor Dept likely supports the Federal Reserve's view that the recent weak inflation readings are probably transitory. Fed policymakers are scheduled to meet on Jun 18-19 against the backdrop of rising trade tensions, slowing growth & a sharp step-down in hiring in May that have led financial markets to price in at least 2 interest rate cuts by the end of 2019. Fed Chairman Jerome Powell said last week that the central bank was closely monitoring the implications of the trade tensions on the economy & would "act as appropriate to sustain the expansion." A rate cut is, however, not expected next Wed. Producer prices excluding food, energy & trade services rose 0.4% last month, matching Apr's gain. The PPI increased 2.3% in the 12 months through May after rising 2.2% in Apr. Weaker energy & food prices, however, partially offset the increase in services last month. That led the producer price index for final demand to edge up 0.1% in May after gaining 0.2% in Apr. In the 12 months thru May, the PPI climbed 1.8%, slowing from the Apr 2.2% advance. The had forecast was for the PPI to nudge up 0.1% in May & rise 2.0% on a year-on-year basis. Treasury yields ticked up & the $ rose to a session high against a basket of currencies after the release of the data. Stock index futures were also trading higher. The services-led increase in the core PPI last month is likely to translate into a slightly higher reading for other underlying inflation measures in May. Core consumer prices are expected to have increased 0.2% last month after nudging up 0.1% in Apr. The Fed's preferred inflation measure, the core personal consumption expenditures (PCE) price index, increased 1.6% in the year to Apr after gaining 1.5% in Mar.
Underlying U.S. producer inflation pushing higher
Commerce Secretary Wilbur Ross predicted that the US & China will successfully negotiate a trade deal. “Eventually, this will end in negotiation,” Ross said. “Even shooting wars end in negotiations.” With questions circulating about whether Pres Trump & Chinese leader Xi Jinping would meet on trade at the G-20 meeting later this month, the pres said he would place additional tariffs on Chinese goods if Xi does not attend. “The China deal is going to work out. You know why? Because of tariffs,” Trump said. “Right now, China is getting absolutely decimated by companies that are leaving China, going to other countries, including our own, because they don’t want to pay the tariffs. Ross, who has spoken out in favor of Trump's tariff strategy, warned that trade deals are not made at summits. He said any talks between Trump & Xi would lay the groundwork for a possible agreement. In May, Trump increased tariff rates on $200B worth of Chinese goods & threatened to put levies on another $300B, effectively the rest of China’s imports in the US. An agreement with China would have to fix all the violations that the US alleges, otherwise making a deal would not make any sense, said Ross. “Either we will collect more and more tariffs on more and more products or we’ll back an arrangement with them,” Ross added, while warning investors not to get too “trigger happy” when Trump threatens tariffs. After the pres warned Mexico on May 30 that he would put a 5% tariff on all Mexican goods if they did not take actions to help curb undocumented migrants from coming into the US, Ross said that “people were getting hysterical” & the markets got “a little too jumpy.” The day after the proposed tariffs were announced, the Dow plunged more than 350 points. “Judge this administration by results,” Ross said. “Don’t judge it by interim soundbites.” Late Fri, the pres called off the Mexico tariffs, saying the US & Mexico agreed to follow thru on earlier concessions it had made on immigration.
Commerce secretary predicts a Trump-China trade deal — ’even shooting wars end in ne…
Stocks would like to extend the May rally, but the popular averages are being hit with selling. The Dow is up 1.3K in May, but selling continues with the Dow 100 below earlier highs.
Dow Jones Industrials
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