Dow surged 263, advancers over decliners3-1 & NAZ gained 126. The MLP index was fractionally higher to 247. Junk bond funds were purchased & Treasuries rose in price once again. Oil shot up 1+ to go over 54 & gold added 2 to 1344 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Chinese Pres Xi Jinping called Pres Trump his "friend" today, saying he didn't think the US was interested in breaking economic ties with the country. Xi made the comment in St Petersburg, Russia. Xi said the US & China had “strong trade and investment connections.” “It’s hard to imagine a complete break of the United States from China or of China from the United States. We are not interested in this, and our American partners are not interested in this. President Trump is my friend and I am convinced he is also not interested in this.” Xi's comments come amid an escalating trade war between the US & China. The Trump administration has imposed up to 25% tariffs on $250B in imports from China & was preparing to increase import duties on another $300B. China retaliated with tariff hikes of its own. Yesterday, Trump said he would make a decision about ramping tariffs on China after he speaks with Xi at a summit this month in Japan. During Xi's visit to Russia, he met with Russian Pres Vladimir Putin & also called him his “best friend.” Trade between Russia & China hit $100B last year, with major transactions & cooperation projects in military hardware, energy, transportation, agriculture, aviation & space.
Consumer borrowing accelerated in Apr at the fastest pace in 5 months, the Federal Reserve said. Total consumer credit increased $17.5B in Apr, an annual growth rate of 5.2%. That's up from a 3.3% rate in the prior month. The forecast was for a $13B gain. Revolving credit, like credit cards, rebounded sharply in Apr, rising by 7.9% after a relatively rare drop of 2.3% in Mar. Nonrevolving credit, typically auto & student loans which don't have as much volatility month-to-month, rose 4.2% after a 5.2% gain in Mar. Economists are watching the consumer closely because strong spending a main factor behind forecasts that the expansion will remain on track this year. Since the start of the year, consumer spending has been a mixed bag, amid some evidence that people are becoming strained financially. The effect of the Trump tax cut, a boost to growth last year, clearly seems to be waning, at least for households. On top of this, unexpected weakness in the May job report, released today, suggests a a more cautious consumer in coming months.
U.S. oil futures rose to tally a weekly gain of 0.9% after dipping into a bear market earlier this week. Hopes for progress in US-Mexico trade talks, days ahead of potential tariffs on Mexican goods, as well as expectations that major oil producers will extend their production-cut deal, provided support for prices. July West Texas Intermediate oil rose $1.40 (2.7%) to settle at $53.99 a barrel. On Wed, front-month futures finished at 22% below their most recent high of $66.30 from Apr 23, marking WTI's entry into bear market.
Gold futures stretched their streak of gains to an 8th straight session as a report that showed much weaker-than-expected US jobs growth in May contributed to declines in the $ & Treasury yields. Aug gold tacked on $3.40 (0.3%) to settle at $1346 an ounce, notching an 8th week of gains in a row, the longest streak of weekly increases this year. The metal rose 2.7% for the week & prices stand at their highest finish since Feb.20. Against that backdrop of the weak employment report, Treasury yields fell sharply , with the 10-year Treasury note yield at its lowest level since Sep 2017 boostiing investor appetite for $-denominated gold. The price moves this week come as tension over trade policy between the US, China & Mexico prompted Federal Reserve Chairman Jerome Powell to suggest that an interest-rate reduction may be appropriate if tariff disputes weaken economic growth — a supportive environment for gold to gain amid lower rates & flight-to-safety bets.
The stock market had an exceptional day, especially considering the weak jobs report. That report signaled to traders a rate cut by the Fed shortly & there were helpful comments about improving conditions in talks with Mexico about trade. At the same time, negative traders continued to buy gold & Treasuries as they bet against positive economic news. After being oversold last month, the Dow is now overbought. But a lot next week will ride on Mexican trade talks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Pres Trump signaled optimism about discussions
between the US & Mexico over tariffs on imports from the country
that are scheduled to go into effect on Mon. The
pres indicated that talks over the course of this week may lead to
an agreement between the 2 countries. But if they don't, the tariff
slap will happen as originally planned. “If we
are able to make the deal with Mexico, & there is a good chance that
we will, they will begin purchasing Farm & Agricultural products at
very high levels, starting immediately,” Trump tweeted. “If we are unable to make the deal, Mexico will begin paying Tariffs at the 5% level on Monday!” In a follow-up tweet, he took aim at Dems saying they “are incapable of doing a good and solid Immigration Bill!” Discussions
between US & Mexican officials have been ongoing in DC this
week as Trump visited the UK, Ireland & France during the week. White
House Press Secretary Sarah Sanders told reporters that Trump
has been in regular touch with VP Mike Pence & Secretary
of State Mike Pompeo on tariff negotiations. She wasn't sure if
negotiations will go on past Fri, she said. At
this point, the tariff plan was expected to move forward, Sanders said.
But she added that officials have “made a lot of progress” & “the
meetings have gone well.” Our position is still the same - we’re moving forward with tariffs starting on Monday,” Sanders said.
Trump signals trade deal optimism with Mexico but vows to impose tariffs if agreement isn’t reached
Chinese Pres Xi Jinping called Pres Trump his "friend" today, saying he didn't think the US was interested in breaking economic ties with the country. Xi made the comment in St Petersburg, Russia. Xi said the US & China had “strong trade and investment connections.” “It’s hard to imagine a complete break of the United States from China or of China from the United States. We are not interested in this, and our American partners are not interested in this. President Trump is my friend and I am convinced he is also not interested in this.” Xi's comments come amid an escalating trade war between the US & China. The Trump administration has imposed up to 25% tariffs on $250B in imports from China & was preparing to increase import duties on another $300B. China retaliated with tariff hikes of its own. Yesterday, Trump said he would make a decision about ramping tariffs on China after he speaks with Xi at a summit this month in Japan. During Xi's visit to Russia, he met with Russian Pres Vladimir Putin & also called him his “best friend.” Trade between Russia & China hit $100B last year, with major transactions & cooperation projects in military hardware, energy, transportation, agriculture, aviation & space.
China's Xi Jinping calls Trump a 'friend,' says US isn't interested in rupturing ties with country
Consumer borrowing accelerated in Apr at the fastest pace in 5 months, the Federal Reserve said. Total consumer credit increased $17.5B in Apr, an annual growth rate of 5.2%. That's up from a 3.3% rate in the prior month. The forecast was for a $13B gain. Revolving credit, like credit cards, rebounded sharply in Apr, rising by 7.9% after a relatively rare drop of 2.3% in Mar. Nonrevolving credit, typically auto & student loans which don't have as much volatility month-to-month, rose 4.2% after a 5.2% gain in Mar. Economists are watching the consumer closely because strong spending a main factor behind forecasts that the expansion will remain on track this year. Since the start of the year, consumer spending has been a mixed bag, amid some evidence that people are becoming strained financially. The effect of the Trump tax cut, a boost to growth last year, clearly seems to be waning, at least for households. On top of this, unexpected weakness in the May job report, released today, suggests a a more cautious consumer in coming months.
Consumer borrowing accelerates in April
U.S. oil futures rose to tally a weekly gain of 0.9% after dipping into a bear market earlier this week. Hopes for progress in US-Mexico trade talks, days ahead of potential tariffs on Mexican goods, as well as expectations that major oil producers will extend their production-cut deal, provided support for prices. July West Texas Intermediate oil rose $1.40 (2.7%) to settle at $53.99 a barrel. On Wed, front-month futures finished at 22% below their most recent high of $66.30 from Apr 23, marking WTI's entry into bear market.
Oil finishes higher, with U.S. prices up 0.9% for the week
Gold futures stretched their streak of gains to an 8th straight session as a report that showed much weaker-than-expected US jobs growth in May contributed to declines in the $ & Treasury yields. Aug gold tacked on $3.40 (0.3%) to settle at $1346 an ounce, notching an 8th week of gains in a row, the longest streak of weekly increases this year. The metal rose 2.7% for the week & prices stand at their highest finish since Feb.20. Against that backdrop of the weak employment report, Treasury yields fell sharply , with the 10-year Treasury note yield at its lowest level since Sep 2017 boostiing investor appetite for $-denominated gold. The price moves this week come as tension over trade policy between the US, China & Mexico prompted Federal Reserve Chairman Jerome Powell to suggest that an interest-rate reduction may be appropriate if tariff disputes weaken economic growth — a supportive environment for gold to gain amid lower rates & flight-to-safety bets.
Gold market stretches gains to 8th session after weak jobs growth
The stock market had an exceptional day, especially considering the weak jobs report. That report signaled to traders a rate cut by the Fed shortly & there were helpful comments about improving conditions in talks with Mexico about trade. At the same time, negative traders continued to buy gold & Treasuries as they bet against positive economic news. After being oversold last month, the Dow is now overbought. But a lot next week will ride on Mexican trade talks.
Dow Jones Industrials
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