Dow plunged 800 (finishing at the lows), decliners over advances better than 5-1 & NAZ lost 242. The MLP index dropped 3+ to the 225s & the REIT index sank 6 to 391. Junk bond funds ran into selling & Treasuries remained in heavy demand, taking the yield on the 10 year Treasury down to 1.58%. Oil fell about 2 to the low 55s & gold soared 15 to 1525 while stocks were being sold (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)
Commerce Secretary Wilbur Ross: Tariff delays were not a trade ‘quid pro quo’ with China
Gold futures logged their highest finish since 2013 after another round of downbeat economic data, & as the temporary inversion of the main measure of the Treasury yield curve raised the risk of a recession. Gold for Dec delivery rose $13.70 (0.9%) to settle at $1527 an ounce after losing 0.2% yesterday. The settlement was the highest for a most-active contract since Apr 2013. The yield on the 10-year Treasury note temporarily traded below the yield on the 2-year note, marking an inversion of the most closely followed measure of the curve. The 3-month vs.10-year measure of the curve has been inverted since earlier this year. US benchmark stock indices extended losses after the curve inverted, while gold appeared to find a lift on haven-related buying. Gold had retreated yesterday as stocks soared following the administration's decision to delay some tariffs on imports from China that had been scheduled to go into effect on Sep 1. Gold's haven appeal was also reinvigorated by downbeat global data. China said industrial output saw a 4.8% year-over-year rise in Jul, slowing from a 6.3% increase in Jun. Retail sales in China rose 7.6% year-over-year, decelerating from 9.8% in Jun & coming in below forecasts for 8.5% growth. Data showed the eurozone economy slowed to a 0.2% growth rate in Q2, which reported a 1.6% decline in industrial production. Germany, the eurozone's largest economy, saw GDP shrink by 0.1% in Q2 from the previous 3 months as global trade tensions & a troubled automotive sector weighed.
Oil futures ended lower for the first time in 5 sessions, after a US gov report revealed that domestic crude inventories rose for a nd week in row, & as the risks of an economic recession fed worries about energy demand. Investors digested a round of downbeat economic data from China & Europe, which contributed to a sharp fall in Treasury yields, prompting the spread between the 2-year note -5.34% & the 10-year note to temporarily fall to a negative 1 basis point. An inversion of this measure has often preceded an economic downturn. West Texas Intermediate crude for Sep delivery fell $1.87 (3.3%) to settle at $55.23 a barrel, while Oct Brent crude declined $1.82 (3%) to $59.48 a barrel. Both crude benchmarks had posted gains in each of the last 4 trading sessions. Crude-oil prices saw strong gains yesterday, reversing an early decline, after the Trump administration announced a delay to some tariffs on Chinese imports that had been due to take effect on Sep & said it planned more talks with China. That prompted expectations for progress toward a resolution on trade, easing concerns over global energy demand. Yesterday, however, the Energy Information Administration (EIA) reported a 2nd-consecutive weekly climb in US crude supplies. Inventories rose 1.6M barrels last week. That followed an increase of 2.4M barrels the week before. The forecast called for a decline of 2.7M barrels, while the American Petroleum Institute on Tues reported a 3.7M-barrel rise. Data showed the eurozone economy slowed to a 0.2% growth rate in Q2, which also reported a 1.6% decline in industrial production. Germany, the eurozone's largest economy, saw GDP shrink by 0,1% in Q2 from the previous 3 months as global trade tensions & a troubled automotive sector weighed.
The Dow began the day down 250 & the selling never let up. It finished down 800 (3%) for one of its worst days in history on fears about a coming recession. It has fallen a staggering almost 2K since the high set one month ago!! Meanwhile classic safe haven investments, gold & Treasuries, are in heavy demand. Not much to say, investors just have to ride out this storm.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Commerce Secretary Wilbur Ross said that the Trump administration's decision to
delay upcoming tariffs on certain items, including smartphones, was not a
trade concession to China but to help American consumers. “Nobody wants to take any chance of disrupting the Christmas season,”
Ross said, adding that “this was not a quid pro quo” in trade
negotiations with Beijing. US officials announced yesterday that certain items were being excluded from Pres Trump's upcoming 10% tariffs on the $300B of Chinese imports not already
taxed. Tariffs on other items on the new list are being
delayed until mid-Dec, instead of the original Sep 1 start date. Ross said that the planned tariffs had been in the works a while before the stock market started to decline from Jul's all-time highs. “We’ve been doing analysis since the hearings were announced by the
USTR,” Ross said. “Even though they were only announced as being imposed
recently, the analytical work began well before that.” Yesterday's tariff announcement led to a powerful rally that broke a two-session losing streak. However,
stocks were sharply lower due to recession
concerns after the 2-year Treasury yield inverted & moved higher than
the 10-year yield for the first time since 2007. A flip in that spread
has preceded every recession over the past 50 years. The flight
from stocks into bonds has been a popular trade as investors seek
perceived safety against wild swings on worries about global growth due
to the trade dispute between the world's biggest economies.
Commerce Secretary Wilbur Ross: Tariff delays were not a trade ‘quid pro quo’ with China
Gold futures logged their highest finish since 2013 after another round of downbeat economic data, & as the temporary inversion of the main measure of the Treasury yield curve raised the risk of a recession. Gold for Dec delivery rose $13.70 (0.9%) to settle at $1527 an ounce after losing 0.2% yesterday. The settlement was the highest for a most-active contract since Apr 2013. The yield on the 10-year Treasury note temporarily traded below the yield on the 2-year note, marking an inversion of the most closely followed measure of the curve. The 3-month vs.10-year measure of the curve has been inverted since earlier this year. US benchmark stock indices extended losses after the curve inverted, while gold appeared to find a lift on haven-related buying. Gold had retreated yesterday as stocks soared following the administration's decision to delay some tariffs on imports from China that had been scheduled to go into effect on Sep 1. Gold's haven appeal was also reinvigorated by downbeat global data. China said industrial output saw a 4.8% year-over-year rise in Jul, slowing from a 6.3% increase in Jun. Retail sales in China rose 7.6% year-over-year, decelerating from 9.8% in Jun & coming in below forecasts for 8.5% growth. Data showed the eurozone economy slowed to a 0.2% growth rate in Q2, which reported a 1.6% decline in industrial production. Germany, the eurozone's largest economy, saw GDP shrink by 0.1% in Q2 from the previous 3 months as global trade tensions & a troubled automotive sector weighed.
Gold marks highest finish since 2013 as recession risk lifts the metal’s haven appeal
Oil futures ended lower for the first time in 5 sessions, after a US gov report revealed that domestic crude inventories rose for a nd week in row, & as the risks of an economic recession fed worries about energy demand. Investors digested a round of downbeat economic data from China & Europe, which contributed to a sharp fall in Treasury yields, prompting the spread between the 2-year note -5.34% & the 10-year note to temporarily fall to a negative 1 basis point. An inversion of this measure has often preceded an economic downturn. West Texas Intermediate crude for Sep delivery fell $1.87 (3.3%) to settle at $55.23 a barrel, while Oct Brent crude declined $1.82 (3%) to $59.48 a barrel. Both crude benchmarks had posted gains in each of the last 4 trading sessions. Crude-oil prices saw strong gains yesterday, reversing an early decline, after the Trump administration announced a delay to some tariffs on Chinese imports that had been due to take effect on Sep & said it planned more talks with China. That prompted expectations for progress toward a resolution on trade, easing concerns over global energy demand. Yesterday, however, the Energy Information Administration (EIA) reported a 2nd-consecutive weekly climb in US crude supplies. Inventories rose 1.6M barrels last week. That followed an increase of 2.4M barrels the week before. The forecast called for a decline of 2.7M barrels, while the American Petroleum Institute on Tues reported a 3.7M-barrel rise. Data showed the eurozone economy slowed to a 0.2% growth rate in Q2, which also reported a 1.6% decline in industrial production. Germany, the eurozone's largest economy, saw GDP shrink by 0,1% in Q2 from the previous 3 months as global trade tensions & a troubled automotive sector weighed.
Oil prices suffer their first loss in 5 sessions
The Dow began the day down 250 & the selling never let up. It finished down 800 (3%) for one of its worst days in history on fears about a coming recession. It has fallen a staggering almost 2K since the high set one month ago!! Meanwhile classic safe haven investments, gold & Treasuries, are in heavy demand. Not much to say, investors just have to ride out this storm.
Dow Jones Industrials
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