Dow went up 6, advancers slightly ahead of decliners & NAZ was flattish. The MLP index lost 1 to the 249s & the REIT index rebounded 5+ to the 387s. Junk bond funds crawled higher & & Treasuries were purchased again. Oil fell 1+ to the 57s after yesterday's advance & gold rose 6 to 1395.
AMJ (Alerian MLP Index tracking fund)
US stocks take a breather after record day
China just extended an olive branch to the US as trade talks restart
This month marks the 121st month of the economic expansion arising out of the great financial crisis, making it the longest run on record going back to 1854. This cycle, starting in Jun 2009, breaks the record of 120 months of economic growth from 1991-2001, according to the National Bureau of Economic Research. Perhaps because of the overhang of the housing crisis, this run has been weaker than past expansions in total. The cumulative total of quarterly GDP growth figures equals 25%, far lower than previous booms. While the unemployment rate has dropped from a peak of 10% in Oct to 3.6% in May, the lowest since 1969, job growth has been relatively slower than during other postwar recoveries. But despite some internal weakness, this expansion keeps trucking along, getting its latest boost from the Trump tax cut of 2018 along with a relaxation in business regulations. However, it now appears to need some help if it’s going to continue to rewrite the record books. The Atlanta Fed's closely watched GDPNow tracker is pointing to just a 1.5% gain for the economy in Q2 after a strong gain of 3.2% in Q1. CNBC's Rapid Update survey puts the GDP tracking estimate at 1.8%. All eyes will be on the jobs report on Fri for the state of the economy. The forecast is for 158K jobs created in Jun, up sharply from the disappointing 75K in May. The unemployment rate is expected to remain unchanged at 3.6%. Analysts are divided on whether this expansion is going to last. Some believe the Federal Reserve will save the day thru cutting interest rates, while some think additional stimulus cannot combat the looming downturn or that the Fed won't be aggressive enough to stave it off. The corp earnings picture certainly doesn't look promising. Now 77% of companies issuing pre-announcements say their profits will be worse than estimates, which marks the 2nd-worst quarter on record going back to 2006.
This is now the longest US economic expansion in history
US proposes $4 billion in potential additional tariffs over EU aircraft subsidies
Investors are buying REITs on an otherwise drab day for stocks. Trade issues remain with little hope for progress over the near term. More Jun economic data is coming this week & that may not be good enough to excite investors, although the averages are still essentially at record highs..
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 58.11 | -0.98 | -1.7% |
| GC=F | Gold | 1,395.00 | +5.70 | +0.4% |
Stocks are trading lower, a day after the S&P 500 set its 6th record close of the year. After yesterday's rally, investors were skeptical of further gains for equities after discouraging manufacturing surveys & a US threat of additional tariffs on European goods. In Asia, the major markets closed
mixed. China's Shanghai slipped back & Hong Kong's
hang Seng added 1.2% as the market caught up to yesterday's rally
when Hong Kong markets were closed for a holiday. Japan's Nikkei inched higher. In Europe, London's FTSE was higher by 0.5% Germany's DAX was little changed & France's CAC was slightly higher. The broad-based S&P 500 stock index set a record high yesterday, beginning July trading on a robust note as investors reacted to the US & China agreeing at the G20 summit to restart trade talks.
US stocks take a breather after record day
China will broaden the ability of some foreign firms to invest in the country a year earlier than expected, a move that comes as trade talks with the US begin again in earnest. “We
will move up the lifting of foreign capital limits in securities,
futures and life insurance, from 2021 to 2020,” Premier Li Keqiang,
China's 2nd-ranking official, said at the
World Economic Forum. “This shows
China’s commitment to opening up.” While it's a small gesture towards improving the relationship with the Trump administration after trade talks fell apart in May, the move won't satisfy the White
House's more sweeping demands that China amend its laws to protect US
business interests in the country. At the recent G20 summit in Japan, Trump &
Chinese Pres Xi Jinping agreed to relaunch trade talks & withhold
the imposition of any new tariffs. Negotiations between the 2 nations
broke down when China backtracked on previously agreed upon terms. In
Mar, China made changes to its existing law governing foreign
investment in an effort to address complaints that the gov
doesn't adequately ensure the safety of American intellectual property,
but critics said the overly broad measure did not go far enough in
addressing those concerns. Alongside the decision on financial investment, Li also made a tenuous commitment to not devalue its currency, a pledge that could help stabilize the trading relationship with the US. As
the value of the renminbi, the Chinese currency, declines relative to
the $, it makes exports from the Asian nation cheaper in
comparison.
China just extended an olive branch to the US as trade talks restart
This month marks the 121st month of the economic expansion arising out of the great financial crisis, making it the longest run on record going back to 1854. This cycle, starting in Jun 2009, breaks the record of 120 months of economic growth from 1991-2001, according to the National Bureau of Economic Research. Perhaps because of the overhang of the housing crisis, this run has been weaker than past expansions in total. The cumulative total of quarterly GDP growth figures equals 25%, far lower than previous booms. While the unemployment rate has dropped from a peak of 10% in Oct to 3.6% in May, the lowest since 1969, job growth has been relatively slower than during other postwar recoveries. But despite some internal weakness, this expansion keeps trucking along, getting its latest boost from the Trump tax cut of 2018 along with a relaxation in business regulations. However, it now appears to need some help if it’s going to continue to rewrite the record books. The Atlanta Fed's closely watched GDPNow tracker is pointing to just a 1.5% gain for the economy in Q2 after a strong gain of 3.2% in Q1. CNBC's Rapid Update survey puts the GDP tracking estimate at 1.8%. All eyes will be on the jobs report on Fri for the state of the economy. The forecast is for 158K jobs created in Jun, up sharply from the disappointing 75K in May. The unemployment rate is expected to remain unchanged at 3.6%. Analysts are divided on whether this expansion is going to last. Some believe the Federal Reserve will save the day thru cutting interest rates, while some think additional stimulus cannot combat the looming downturn or that the Fed won't be aggressive enough to stave it off. The corp earnings picture certainly doesn't look promising. Now 77% of companies issuing pre-announcements say their profits will be worse than estimates, which marks the 2nd-worst quarter on record going back to 2006.
This is now the longest US economic expansion in history
Just days after reaching a truce in the US-China trade war, the US gov ratcheted up pressure on Europe in a long-running dispute over aircraft subsidies, threatening tariffs on $4B of additional EU goods. The US Trade Representative’s office released a list of additional
products — including olives, Italian cheese & Scotch whiskey — that
could be hit with tariffs, on top of products worth $21B that
were announced in Apr. USTR said it was adding 89 tariff sub-categories to its initial
list, including a variety of metals, in response to public comments, but
gave no further explanation. Over 40 individuals testified about
products included on the initial list at a public hearing on May 15-16.
The US & EU have threatened to impose Bs of $ of tariffs on planes, tractors & food in a nearly 15-year dispute at the World Trade Organization over aircraft subsidies. Senior officials from Boeing (BA), a Dow stock, & a US aerospace trade group urged the gov last month to narrowly tailor any tariffs imposed on the EU over illegal aircraft subsidies to avoid harming American manufacturers. This move followed news during the Paris Air Show that the US could be open to negotiations on an “enforceable mechanism” that could allow Airbus to receive gov funding on commercial terms, potentially paving the way for an end to the aircraft subsidy fight. The WTO has found that the world's 2 largest planemakers received Bs of harmful subsidies in a pair of cases marking the world's largest-ever corp trade dispute. It is expected to rule on the US sanctions request over the summer, although the date could slip to Sep. USTR said it would hold a hearing on the proposed additional products on Aug 5.
The US & EU have threatened to impose Bs of $ of tariffs on planes, tractors & food in a nearly 15-year dispute at the World Trade Organization over aircraft subsidies. Senior officials from Boeing (BA), a Dow stock, & a US aerospace trade group urged the gov last month to narrowly tailor any tariffs imposed on the EU over illegal aircraft subsidies to avoid harming American manufacturers. This move followed news during the Paris Air Show that the US could be open to negotiations on an “enforceable mechanism” that could allow Airbus to receive gov funding on commercial terms, potentially paving the way for an end to the aircraft subsidy fight. The WTO has found that the world's 2 largest planemakers received Bs of harmful subsidies in a pair of cases marking the world's largest-ever corp trade dispute. It is expected to rule on the US sanctions request over the summer, although the date could slip to Sep. USTR said it would hold a hearing on the proposed additional products on Aug 5.
US proposes $4 billion in potential additional tariffs over EU aircraft subsidies
Investors are buying REITs on an otherwise drab day for stocks. Trade issues remain with little hope for progress over the near term. More Jun economic data is coming this week & that may not be good enough to excite investors, although the averages are still essentially at record highs..
Dow Jones Industrials
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