Dow rebounded 77 (still below 25K), advancers over decliners 5-2 & NAZ fell 35. The MLP index added 2+ to 246. Junk bond funds drifted lower & Treasuries remain in demand, bringing higher prices. Oil went higher in the 53s & gold jumped up 11 to 1317 on growing trade tensions.
AMJ (Alerian MLP Index tracking fund)
China blamed the US for the trade war, vowing it would not back down & accused DC of being an untrustworthy negotiator as tensions continue to escalate between the 2 countries. China released a policy paper that claimed the US had backtracked three times during trade negotiations by implementing new tariffs & other conditions. The report said that China has kept its word throughout 11 rounds of talks & will honor its commitments if a trade agreement is reached. “The more the U.S. government is offered, the more it wants," the paper said, adding that America's negotiators are "resorting to intimidation and coercion." "A country's sovereignty and dignity must be respected, and any agreement reached by the two sides must be based on equality and mutual benefit," it added. Wang Shouwen, China''s vice commerce minister & deputy international trade representative, also said during a news conference that China will not be pressured during the trade standoff. He denied that China backtracked on previous commitments & said the country had to “take forceful measures in response” to America’s actions. “If the U.S. side wants to use extreme pressure, to escalate the trade friction, to force China to submit and make concessions, this is absolutely impossible,” Wang said. “Nothing is agreed until everything is agreed,” he added. “During the consultations, China has overcome many difficulties and put forward pragmatic solutions. However, the U.S. has backtracked, and when you give them an inch, they want a yard.” The 2 countries have been ensnared in a trade standoff that escalated last month when Pres Trump increased tariffs on $200B worth of Chinese imports to 25%. China hit back at the US by announcing plans to raise tariffs on $60B worth of American products that went into effect on Sat.
Manufacturing in the US slumped to its lowest level in 2½ years amid escalating global trade tensions. The closely watched ISM manufacturing index fell to 52.1 for May, compared to expectations for 53, the lowest reading since Oct 2016. Construction spending also disappointed, with a flat reading compared to expectations for a 0.4% growth in Apr. On the manufacturing reading, the big detractors came in supplier deliveries, which slumped 2.6 percentage points to 52, & inventories, which declined 2 percentage points to 50.9. The ISM index represents readings from companies on plans to expand. Any reading above 50 is thus considered expansionary. Respondents' comments “reflect continued expanding business strength, but at soft levels consistent with the early-2016 expansion,” ISM Chairman Timothy R. Fiore said. The report comes amid a growing tariff battle between the US & China, with negotiations at a standstill. Despite the tensions & the downward pressure they have put on inveestors & the stock market, the news was not all bad from the ISM report. The production index grew 1 point to 51.3 a& employment increased by 1.3 points to 53.7. The prices index also showed a strong gain, rising from 50 in Apr to 53.2 in May.
Manufacturing gauge hits lowest level since October 2016
In the Dow on only 6 of the 30 stocks are lower today. Strength in the Dow is puzzling with all the gloomy news on trade front & weak manufacturing data. The latter adds to worries about a slowdown in the US & global economies. The strength in the Dow may not last with the bears firmly in command.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 53.79 | +0.29 | +0.5% |
| GC=F | Gold | 1,321.40 | +10.30 | +0.8% |
Heightened worries about the global economy left US stock futures & Treasury yields poised to begin Jun lower. Front & center of those worries is Pres Trump's
threat to impose tariffs on imports from Mexico. In combination with
China yesterday publicly blaming the US for worsening Sino-American
trade relations, investors were looking for safety rather than the
relatively more risky stocks. Mexican Economy Minister Graciela Marquez said on yesterday she will meet with Commerce Secretary Wilbur Ross today in the midst of growing trade tensions between the 2 nations. The planned meeting comes as Pres Trump threatened to impose a 5% tariff on all goods imported from Mexico beginning
Jun 10 in an effort to get the country to prevent undocumented
migrants from entering the US. The tax could increase to 25% &
remain at that level “unless and until Mexico substantially stops the
illegal inflow of aliens coming through its territory,” the White House
said. Futures for the Dow were
off 0.3%, & the NAZ lower by 0.5%. The Dow is
coming off a 6-week losing streak, the longest losing streak in 8
years. If the selling pressure in stocks continues & the Dow falls
this week, it would be 7 straight down weeks, which hasn't happened
in almost 18 years, since 2001. China blamed the US for the trade warvowing
it would not back down & accused DC of being an untrustworthy
negotiator as tensions continue to escalate between the 2 countries. China
released a policy paper that claimed the US had backtracked 3
times during trade negotiations by implementing new tariffs and other
conditions. The report said that China has kept its word throughout 11
rounds of talks & will honor its commitments if a trade agreement is
reached. “The more the U.S. government is
offered, the more it wants," the paper said, adding that America's
negotiators are "resorting to intimidation and coercion." The yield on Treasurie was down to 2.1%, while crude oil prices were steady at approximately $53.85 per barrel. China's
Shanghai Composite closed down 0.3%, the Hang Seng ended 0.03% lower & Japan's Nikkei 225 retreated 0.9%. Britain's FTSE 100 was down 0.5%, France's CAC 40 fell 0.3% & Germany's DAX was off 0.2%.
Mexican Economy Minister Graciela Marquez said she will meet with Wilbur Ross. The planned meeting comes as Pres Trump threatened to impose a 5 percent tariff on all goods imported from Mexico
beginning Jun 10 & the tax could increase to
25% & remain at that level “unless and until Mexico
substantially stops the illegal inflow of aliens coming through its
territory,” the White House said. Mexico's undersecretary for foreign trade, Luz Ma
de la Mora, said in a tweet that Marquez & Ross will analyze the
business relationship between Mexico & the US & that the country
has become America’s largest trading partner in 2019. Marquez & Ross scheduled the meeting while in El Salvador, where both
attended the inauguration of the country's new pres, Nayib Bukele. Meanwhile,
Trump tweeted yesterday that Mexico “could solve the Border Crisis
in one day if they so desired,” & that the US wants “action, not
talk.” “Mexico is sending a big delegation to
talk about the Border. Problem is, they’ve been “talking” for 25 years,”
the pres added. “We want action, not talk. They could solve the
Border Crisis in one day if they so desired. Otherwise, our companies
and jobs are coming back to the USA!”
China blamed the US for the trade war, vowing it would not back down & accused DC of being an untrustworthy negotiator as tensions continue to escalate between the 2 countries. China released a policy paper that claimed the US had backtracked three times during trade negotiations by implementing new tariffs & other conditions. The report said that China has kept its word throughout 11 rounds of talks & will honor its commitments if a trade agreement is reached. “The more the U.S. government is offered, the more it wants," the paper said, adding that America's negotiators are "resorting to intimidation and coercion." "A country's sovereignty and dignity must be respected, and any agreement reached by the two sides must be based on equality and mutual benefit," it added. Wang Shouwen, China''s vice commerce minister & deputy international trade representative, also said during a news conference that China will not be pressured during the trade standoff. He denied that China backtracked on previous commitments & said the country had to “take forceful measures in response” to America’s actions. “If the U.S. side wants to use extreme pressure, to escalate the trade friction, to force China to submit and make concessions, this is absolutely impossible,” Wang said. “Nothing is agreed until everything is agreed,” he added. “During the consultations, China has overcome many difficulties and put forward pragmatic solutions. However, the U.S. has backtracked, and when you give them an inch, they want a yard.” The 2 countries have been ensnared in a trade standoff that escalated last month when Pres Trump increased tariffs on $200B worth of Chinese imports to 25%. China hit back at the US by announcing plans to raise tariffs on $60B worth of American products that went into effect on Sat.
China blames US for trade war, says ‘nothing is agreed until everything is agreed’
Manufacturing in the US slumped to its lowest level in 2½ years amid escalating global trade tensions. The closely watched ISM manufacturing index fell to 52.1 for May, compared to expectations for 53, the lowest reading since Oct 2016. Construction spending also disappointed, with a flat reading compared to expectations for a 0.4% growth in Apr. On the manufacturing reading, the big detractors came in supplier deliveries, which slumped 2.6 percentage points to 52, & inventories, which declined 2 percentage points to 50.9. The ISM index represents readings from companies on plans to expand. Any reading above 50 is thus considered expansionary. Respondents' comments “reflect continued expanding business strength, but at soft levels consistent with the early-2016 expansion,” ISM Chairman Timothy R. Fiore said. The report comes amid a growing tariff battle between the US & China, with negotiations at a standstill. Despite the tensions & the downward pressure they have put on inveestors & the stock market, the news was not all bad from the ISM report. The production index grew 1 point to 51.3 a& employment increased by 1.3 points to 53.7. The prices index also showed a strong gain, rising from 50 in Apr to 53.2 in May.
Manufacturing gauge hits lowest level since October 2016
In the Dow on only 6 of the 30 stocks are lower today. Strength in the Dow is puzzling with all the gloomy news on trade front & weak manufacturing data. The latter adds to worries about a slowdown in the US & global economies. The strength in the Dow may not last with the bears firmly in command.
Dow Jones Industrials
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