Dow dropped 213, decliners over advancers about 5-2 & NAZ fell 56. The MLP index pulled back 2+ to the 227s & the REIT index was steady in the 397s (near record highs). Junk bond funds were mixed & Treasuries went up along with gold. Oil was flattish in the 54s & gold rose 5 to 1513 (more below).
AMJ (Alerian MLP Index tracking fund)
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.695%, while the yield on the 30-year Treasury bond was also lower at around 2.201%. Market focus is largely attuned to simmering trade tensions between DC & Beijing. On Fri, Pres Trumps said he was not ready to make a deal with China & called into question the next round of trade talks. It comes after the president said he would impose a 10% tariff on the remaining $300B of Chinese imports on Sep 1. China responded by halting its purchases of US agricultural products. Last week, the US accused China of being a currency manipulator after Beijing allowed the yuan to dip below the 7-per-$ level for the first time in more than a decade. Today, the People's Bank of China (PBOC) set its daily midpoint for yuan trading, which determines the limits for its onshore movement, at 7.0211 per $, weaker than Fri's session, but stronger than market expectations.
10-year Treasury yield falls below 1.7% amid trade, global growth worries
Hong Kong airport cancels all flights due to protests
Gold futures edged higher, trading near a 6-year high above $1500-an-ounce set last week, as the US-China trade battle continues & global investors focus on political demonstrations in Hong Kong. Dec gold rose $7.40 (0.5%) to $1515 an ounce, while Sep silver was up 1.9¢ at $16.95 an ounce. The yellow metal ended with a minor loss on Fri, but logged a 3.5% weekly rise, the strongest since Jun 21. Stock-market volatility around US-China trade tensions were credited with lifting haven assets, including gold. The potential for early elections in Italy & continued worries over protests in Hong Kong, have also provided support. Chinese authorities condemned weekend protests as “the first signs of terrorism” & vowed a crackdown on demonstrators. Authorities canceled outgoing flights from the city's airport after it was thronged by protesters.
With plenty of uncertainty, a lot coming from China, investors are buying safe haven investments. Gold & Treasuries look they will have a very good week while stocks are being sold.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 54.77 | +0.27 | +0.5% |
| GC=F | Gold | 1,516.00 | +7.50 | +0.5% |
Stocks dropped over concerns that the US-China trade war might be worsening. Market
benchmarks in Frankfurt & Paris also traded lower while Shanghai &
Hong Kong closed with declines. Tokyo was closed for a holiday. Investors
are worried Pres Trump's impending Sep 1 tariff hike on more
Chinese imports will scuttle talks aimed at ending their trade war. Those fears are being balanced out by hopes global central banks will keep interest rates low to shore up economic growth. The S&P 500
index dropped as much as 1.3% Fri after Trump said it would be
"fine" if trade talks next month don't happen." This
week we'll hear from 11 members of the S&P 500 & 2 Dow
components. On this week's economic calendar, traders will get a look at the impact
the trade conflict with China is having. Reports are due this week on inflation,
retail sales productivity & industrial production.
VOLATILITY HITS STOCKS AS THE TRADING WEEK BEGINS
The yield on the benchmark 10-year Treasury note, which moves inversely to price, was lower at around 1.695%, while the yield on the 30-year Treasury bond was also lower at around 2.201%. Market focus is largely attuned to simmering trade tensions between DC & Beijing. On Fri, Pres Trumps said he was not ready to make a deal with China & called into question the next round of trade talks. It comes after the president said he would impose a 10% tariff on the remaining $300B of Chinese imports on Sep 1. China responded by halting its purchases of US agricultural products. Last week, the US accused China of being a currency manipulator after Beijing allowed the yuan to dip below the 7-per-$ level for the first time in more than a decade. Today, the People's Bank of China (PBOC) set its daily midpoint for yuan trading, which determines the limits for its onshore movement, at 7.0211 per $, weaker than Fri's session, but stronger than market expectations.
10-year Treasury yield falls below 1.7% amid trade, global growth worries
Hong Kong Intl Airport, one of the
world's busiest terminals, has canceled all departures for the remainder
of the day, citing serious disruption due to pro-democracy
demonstrations. The airport authority it had canceled all flights not yet checked in by the PM. Around 5K anti-gov protesters had been demonstrating at the airport for a 4th day
today. Some activists had reportedly moved to the departure area & caused disruption, according to the Hong Kong police. The police
declined to say if it would move to clear the anti-gov
demonstrators. The
authority said: “Airport operations at Hong Kong
International Airport have been seriously disrupted as a result of the
public assembly at the airport today.” “The traffic to the
airport is very congested, and the car park spaces at all car parks are
already full. Members of the public are advised not to come to the
airport,” it added. It later advised all passengers to leave the
terminal building as soon as possible & said flights will resume at 6AM tomorrow (local time). The
increasingly violent protests since Jun have plunged the Asian
financial hub into its most serious crisis in decades & are one of the
biggest popular challenges to Chinese leader Xi Jinping since he came
to power in 2012.
Hong Kong airport cancels all flights due to protests
Gold futures edged higher, trading near a 6-year high above $1500-an-ounce set last week, as the US-China trade battle continues & global investors focus on political demonstrations in Hong Kong. Dec gold rose $7.40 (0.5%) to $1515 an ounce, while Sep silver was up 1.9¢ at $16.95 an ounce. The yellow metal ended with a minor loss on Fri, but logged a 3.5% weekly rise, the strongest since Jun 21. Stock-market volatility around US-China trade tensions were credited with lifting haven assets, including gold. The potential for early elections in Italy & continued worries over protests in Hong Kong, have also provided support. Chinese authorities condemned weekend protests as “the first signs of terrorism” & vowed a crackdown on demonstrators. Authorities canceled outgoing flights from the city's airport after it was thronged by protesters.
Gold edges higher as trade-war worries continue
With plenty of uncertainty, a lot coming from China, investors are buying safe haven investments. Gold & Treasuries look they will have a very good week while stocks are being sold.
Dow Jones Industrials
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