Dow jumped up 160, advancers over decliners better than 2-1 & NAZ gained 90. The MLP index rose 2+ to the 252s & the REIT index fell 2+ to 380. Junk bond funds were mixed & Treasuries dropped in price. Oil shot up 1 to the 59s (more below) & gold plunged 18 to 1395 while stocks were being purchased.
AMJ (Alerian MLP Index tracking fund)
Pres Trump & Chinese Pres Xi Jinping on Sat agreed to resume trade talks & a cease-fire on escalating tensions — but Chinese state media said later that a trade agreement between the 2 countries is still “very much in the air.” Trump & Xi met Sat on the sidelines of the G20 summit in an effort to push forward trade talks after tensions escalated last month when the US raise tariffs on $200B worth of Chinese imports to 25%. Trump said Sat he won't move ahead with his plan to impose tariffs on another $300B worth of Chinese goods for the “time being.” "We're going to work with China where we left off," Trump said & added China had agreed to buy more American farm products. China Daily, an English-language daily China often uses to relay messages, said in an opinion piece that although a US-China trade deal is now more likely to happen, there's still a long road ahead before both sides come to a 100% agreement. “Even though Washington agreed to postpone levying additional tariffs on Chinese goods to make way for negotiations, and Trump even hinted at putting off decisions on Huawei until the end of negotiations, things are still very much up in the air,” the Chinese Daily editorial published. “Agreement on 90 percent of the issues has proved not to be enough, and with the remaining 10 percent where their fundamental differences reside, it is not going to be easy to reach a 100-percent consensus, since at this point, they remain widely apart even on the conceptual level,” it continued. Trump had tweeted Sat that his meeting with Xi went “far better than expected” & said along with halting additional tariffs, he was also allowing U.S. companies to sell some components to Chinese telecommunications giant Huawei. The company was placed on a blacklist last month because it was a threat to national security.
US-China trade agreement still ‘very much in the air’ despite Trump, Xi meeting, Chinese state media says
Kudlow: No 'amnesty' for Huawei, despite Trump easing some restrictions
OPEC set to extend oil supply cut as Iran endorses pact
Stocks had a big pop at the opening on the news out of Asia. However, the Dow has pulled back about 100 from the open on a realization that little was decided over the weekend. Market breath is already thin when all is considered. A final deal will take a lot of work to be completed. There is a good chance that early enthusiasm will fade in the PM as reality sets in.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 59.52 | +1.05 | +1.8% |
| GC=F | Gold | 1,392.80 | -20.90 | -1.5% |
Stocks jumped as investors reacted to the progress between the US & China at the G-20 as well as the historic meeting between Pres Trump & North Korean's leader Kim Jong Un. The
S&P 500 hit an intraday high right at the open of the markets. Tech
companies including semiconductor leaders are seeing early gains. US benchmark oil prices surged nearly 3% higher to levels not
seen in 5 weeks on the possibility rising demand due to improving
US-China trade negotiations & reduced global supply due to an OPEC
plan with Russia to extend production cuts into 2020. Chinese shares ended at their highest level in
more than 2 months. The Shanghai Composite jumped 2.2% & Japan's
Nikkei added 1.8%. Hong Kong's Hang Seng was closed for a
holiday. In Europe, London's FTSE rose 1.3%, Germany's DAX gained 1.3% & France's CAC was 0.8% higher.
Dow jumps 250 points, S&P 500 hits new high on US-China trade progress
Pres Trump & Chinese Pres Xi Jinping on Sat agreed to resume trade talks & a cease-fire on escalating tensions — but Chinese state media said later that a trade agreement between the 2 countries is still “very much in the air.” Trump & Xi met Sat on the sidelines of the G20 summit in an effort to push forward trade talks after tensions escalated last month when the US raise tariffs on $200B worth of Chinese imports to 25%. Trump said Sat he won't move ahead with his plan to impose tariffs on another $300B worth of Chinese goods for the “time being.” "We're going to work with China where we left off," Trump said & added China had agreed to buy more American farm products. China Daily, an English-language daily China often uses to relay messages, said in an opinion piece that although a US-China trade deal is now more likely to happen, there's still a long road ahead before both sides come to a 100% agreement. “Even though Washington agreed to postpone levying additional tariffs on Chinese goods to make way for negotiations, and Trump even hinted at putting off decisions on Huawei until the end of negotiations, things are still very much up in the air,” the Chinese Daily editorial published. “Agreement on 90 percent of the issues has proved not to be enough, and with the remaining 10 percent where their fundamental differences reside, it is not going to be easy to reach a 100-percent consensus, since at this point, they remain widely apart even on the conceptual level,” it continued. Trump had tweeted Sat that his meeting with Xi went “far better than expected” & said along with halting additional tariffs, he was also allowing U.S. companies to sell some components to Chinese telecommunications giant Huawei. The company was placed on a blacklist last month because it was a threat to national security.
US-China trade agreement still ‘very much in the air’ despite Trump, Xi meeting, Chinese state media says
White House economic adviser Larry Kudlow tamped down expectations of a quick resolution of the US-China trade dispute,
adding that Pres Trump's decision to let Chinese telecom giant
Huawei buy some additional US products is "not a general amnesty." President
Trump announced that U.S. suppliers will be allowed to sell
components to Chinese telecom giant Huawei following talks with Chinese
Pres Xi Jinping. Trump declared relations with China were “right
back on track” after he & Xi sought to de-escalate a
prolonged trade war between the 2 economic powerhouses, also
announcing that trade talks will resume & tariffs were on hold. In addition, Trump eased restrictions on Huawei. “U.S.
companies can sell their equipment to Huawei,” Trump said. “We’re talking about equipment where there’s no great
national security problem with it.” However, Kudlow, the director of the National Economic
Council, said Trump's move does not mean the administration no longer
regards Huawei as a surveillance agency of the Chinese Communist Party. "This
is not a general amnesty, if you will. Huawei will remain on the
so-called Entity’s List, where there are serious export controls and in
any national security instances or suggestions there won’t be any
licenses but having said that I think that all that’s going to happen is
the commerce department will grant some temporary additional licenses
where there’s a general availability," he added. In
addition, the chronic, as well as acute nature of the trade tensions
between the world's 2 biggest economic powers, means the White House
will not be rushed into making a deal & negotiations will continue
“for quite some time,” Kudlow said. “No
promises, no deal made, there’s no time table I want to emphasize that
as the President said several times this is about the quality of the
deal there’s no time table, there’s no rush,” he said. “It’s
very important from the American side, the relationship with China has
to be rebalanced. It has been very unbalanced in recent years,” Kudlow
continued. “As you know we’ve had tremendous problems with intellectual
property theft, forced transfers of technology, tariffs, non-tariff
barriers, various cyber hacking going on and other issues, ok. Those
have to be remedied, that’s a very important point of these talks
however long that may take it is impossible to predict.”
Kudlow: No 'amnesty' for Huawei, despite Trump easing some restrictions
A meeting of OPEC ministers is underway in Vienna with the cartel considering a 6-9 month extension of its current deal to cut production. The group is facing a weaker demand outlook due to slowing global growth. US crude futures were at $59.61, up 2%. Saudi
Arabia's Energy Minister Khalid Al-Falih, asked if a 6 or 9 month
extension was more likely, said that "we will not know for sure until
tomorrow. Most countries want nine months." The
head of Nigeria's delegation, Folasade Yemi-Esan, said that her
country "strongly endorsed" an extension of the deal for 9 months,
saying that would "offer greater certainty to the market." The current deal reduced production by 1.2M barrels per day starting from Jan 1. Tensions between the US & Iran & attacks on tankers near the Strait of Hormuz have sent oil prices higher in recent days. Over
the longer term, demand could weaken according to the Intl
Energy Agency, which cut its demand estimate earlier this month. Experts say a military conflict between the US & Iran would further constrain oil supply & send oil prices higher.
OPEC set to extend oil supply cut as Iran endorses pact
Stocks had a big pop at the opening on the news out of Asia. However, the Dow has pulled back about 100 from the open on a realization that little was decided over the weekend. Market breath is already thin when all is considered. A final deal will take a lot of work to be completed. There is a good chance that early enthusiasm will fade in the PM as reality sets in.
Dow Jones Industrials
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