Dow slid back 3, advancers modestly ahead of decliners & NAZ crawled up 5. The MLP index was fractionally lower in the 248s & the REIT index added 1 to the 391s. Junk bond funds did little today & Treasuries were bid higher. Oil climbed in the 58s & gold gave back 1 to 1440.
AMJ (Alerian MLP Index tracking fund)
Stocks rise ahead of Fed decision on interest rates
Companies added more jobs than expected in Jul amid concerns that the US economy was slowing & the labor market was nearing full employment. Private payrolls increased 156K for the month, according to a report from ADP & Moody's Analytics that beat estimates of 150K. The number was an increase from the 112K in Jun, revised higher from the initially reported 102K. While the number showed strength in the overall labor market, recent months have seen a departure from the consistent gains above 200K over the past several years, providing more signs that conditions are tightening. “Job growth is healthy, but steadily slowing,” Mark Zandi, chief economist at Moody's Analytics, said. “Small businesses are suffering the brunt of the slowdown. Hampering job growth are labor shortages, layoffs at bricks-and-mortar retailers, and fallout from weaker global trade.” Indeed, companies with fewer than 50 employees lagged their counterparts, adding just 11K positions for the month. By contrast, those with more than 500 workers grew by 78K, while medium-sized businesses added 67K. The services sector accounted for 146K of the total while goods producers added 9K (the numbers don't add to the final total due to rounding). By industry, professional & business services grew the most, with 44K new jobs. Education & health services were next with 37K while trade, transportation & utilities rose 27K. On the goods side, construction added 15K but natural resources & mining fell by 6K & manufacturing contributed just 1K to the total. The ADP/Moody's report is watched as a potential benchmark for the more widely followed nonfarm payrolls report, which the Labor Dept will release Fri. The 2 reports can differ widely, though, as Jun's gov count reflected growth of 224K against the much smaller ADP total. The forecast is calling for payrolls to be up 165K for Jul & the unemployment rate is expected to edge lower to 3.6%, a 50-year low.
Private payroll growth tops estimates as jobs market shows signs of tightening
US, China trade meeting ends with sharp response to Trump
Not much for traders to do now except twiddle their thumbs. A ¼ point rate cut is widely expected & the post meeting statement is not going to reveal new thoughts about changes coming in the future. Earnings have been fairly good & Jul economic data is coming in the next week. Aug which begins tomorrow has a reputation for being a slow month in the stock market.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 58.34 | +0.29 | +0.5% |
| GC=F | Gold | 1,441.90 | +0.10 | +0.0% |
The Federal Reserve is widely expected to cut interest rates for the first time in a decade in hopes of shielding the
11-year economic expansion from growing global uncertainties. The central bank is expected to
lower it by a modest qtr of a percentage point — will end an era of
monetary tightening by policymakers, who have voted nine times since
2015 to raise interest rates, as recently as Dec. The latest round of trade negotiations between the US & China seems to have ended with no progress. Envoys for both countries met today for talks
aimed at ending a tariff war after Pres Trump
rattled financial markets by accusing Beijing of trying to stall in
hopes he will fail to win re-election in 2020. With more ½ the companies in the S&P 500 already out with
earnings it’s noteworthy that the results are coming in much better than
expected. ¾ of the names reporting have beaten forecasts & nearly 2/3 have surpassed revenue estimates.
Stocks rise ahead of Fed decision on interest rates
The latest round of trade negotiations between the US & China seems to have ended with no progress. Envoys
for both countries met for talks aimed at ending a tariff war
after Pres Trump rattled financial markets by accusing
Beijing of trying to stall in hopes he will fail to win re-election in
2020. The meeting ended about 40 minutes ahead of schedule. Neither delegation spoke to reporters before Trade Representative Robert Lighthizer & Treasury Secretary Steve
Mnuchin left for the airport. According to a source familiar with the matter, the US & China will continue trade negotiations next in Sep. It has been expected that breakthroughs were unlikely because the 2 govs
face the same disagreements over China's technology policy & trade
surplus that caused talks to break down in May. Trump & Pres Xi Jinping agreed in Jun to resume negotiations but neither has given any sign of offering big concessions. The
dispute over US complaints that Beijing steals or pressures companies
to hand over technology has battered exporters on both sides &
disrupted trade in goods from soybeans to medical equipment. Trump has
raised tariffs on $250B worth of Chinese imports while Beijing
responded by taxing $110B of US products. Chinese
leaders are resisting US pressure to roll back plans for
gov-led development of industry leaders in robotics, artificial
intelligence & other technologies. The US complains those efforts
depend on stealing or pressuring foreign companies to hand over
technology.
US, CHINA END NEW ROUND OF TRADE TALKS IN A NO DECISION
Companies added more jobs than expected in Jul amid concerns that the US economy was slowing & the labor market was nearing full employment. Private payrolls increased 156K for the month, according to a report from ADP & Moody's Analytics that beat estimates of 150K. The number was an increase from the 112K in Jun, revised higher from the initially reported 102K. While the number showed strength in the overall labor market, recent months have seen a departure from the consistent gains above 200K over the past several years, providing more signs that conditions are tightening. “Job growth is healthy, but steadily slowing,” Mark Zandi, chief economist at Moody's Analytics, said. “Small businesses are suffering the brunt of the slowdown. Hampering job growth are labor shortages, layoffs at bricks-and-mortar retailers, and fallout from weaker global trade.” Indeed, companies with fewer than 50 employees lagged their counterparts, adding just 11K positions for the month. By contrast, those with more than 500 workers grew by 78K, while medium-sized businesses added 67K. The services sector accounted for 146K of the total while goods producers added 9K (the numbers don't add to the final total due to rounding). By industry, professional & business services grew the most, with 44K new jobs. Education & health services were next with 37K while trade, transportation & utilities rose 27K. On the goods side, construction added 15K but natural resources & mining fell by 6K & manufacturing contributed just 1K to the total. The ADP/Moody's report is watched as a potential benchmark for the more widely followed nonfarm payrolls report, which the Labor Dept will release Fri. The 2 reports can differ widely, though, as Jun's gov count reflected growth of 224K against the much smaller ADP total. The forecast is calling for payrolls to be up 165K for Jul & the unemployment rate is expected to edge lower to 3.6%, a 50-year low.
Private payroll growth tops estimates as jobs market shows signs of tightening
US & Chinese negotiators wrapped up a brief
round of trade talks that Beijing described as
“constructive,” including discussion of further purchases of American
farm goods & an agreement to reconvene in Sep. The first
face-to-face trade talks since a ceasefire was agreed last month
amounted to a working dinner yesterday at Shanghai's historic Fairmont
Peace Hotel & a ½-day meeting today, before Trade
Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin flew out. “Both sides, according to the consensus reached by the two leaders in
Osaka, had a candid, highly effective, constructive and deep exchange on
major trade and economic issues of mutual interest,” China's Commerce
Ministry said after the US team left Shanghai. Negotiators discussed more Chinese purchases of agricultural products from the US, which had become a bone of contention after Pres Trump said China had not delivered on promised purchases. The
talks began amid low expectations, with Trump accusing
Beijing of stalling, & warning of a worse outcome for China
if it continued to do so. Today, the Chinese Foreign Ministry
said that it was not aware of the latest
developments during the talks, but that it was clear it was the US continued to “flip flop.” The spokeswoman said, “I believe it doesn’t make any sense for the U.S. to exercise its
campaign of maximum pressure at this time.” “It’s pointless to tell others to take medication when you’re the one who is sick,” she said. The 2 sides will reconvene in Sep in the US, the Commerce Ministry said.
US, China trade meeting ends with sharp response to Trump
Not much for traders to do now except twiddle their thumbs. A ¼ point rate cut is widely expected & the post meeting statement is not going to reveal new thoughts about changes coming in the future. Earnings have been fairly good & Jul economic data is coming in the next week. Aug which begins tomorrow has a reputation for being a slow month in the stock market.
Dow Jones Industrials
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