Dow went up 84, decliners modestly ahead of advancers & NAZ slid back 9. The MLP index dropped 2+ to the 233s & the REIT index was steady at 408. Junk bond funds crawled higher & Treasuries slid lower in price. Oil fell 1+ to the 55s & gold, gave back 7, falling to 1533.
AMJ (Alerian MLP Index tracking fund)
Chinese State Councilor & Foreign Minister Wang Yi said in NY that while his country has no intention of unseating the US as the world leader, china expects America to “remove all unreasonable restrictions.” “China-U.S. relations today have once again come to a cross roads,” Wang said, through a translator at a dinner co-hosted by the National Committee on US-China Relations & The US-China Business Council. “While China opens wider to the U.S. and the rest of the world, we expect the U.S. to do the same to China and remove all unreasonable restrictions,” Wang said. “In a word, China’s efforts and achievements of reform and opening up in the past several decades have been widely recognized. They should not be deliberately ignored or denied.” Wang's remarks come as the world's 2 largest economies are locked in escalating trade tensions centered on US complaints about its trade deficit with China, & lack of equal access to the local market. Foreign companies often allege they are forced to transfer key technology in order to operate in China. Access is also uneven. In the last 2 years, the Chinese gov has taken steps to increase foreign access to industries such as securities brokerages & passed a new foreign investment law to improve intellectual property protection & limit forced technology transfers. However, a survey from the American Chamber of Commerce in Shanghai released this month showed that greater access to the domestic market was top on respondents' wish list for any trade agreement. The next round of high-level trade talks is expected to take place in early Oct in DC. Wang said he hoped the negotiations would “produce a positive outcome” & emphasized the business opportunity for America in working with China. “The trade frictions between China and the U.S. in the last year have inflicted losses on both countries, losses that should not have happened,” Wang said, noting both sides should “explore new areas of cooperation.”
China wants the US to ‘remove all unreasonable restrictions’
US new home sales increase more than expected in August
Thoughts of impeachment are making traders very, very nervous. The US economy continues to reasonably well after a long run. But politics can get get even uglier & already has a bad track record in the last 3 years. That may be a bigger dark cloud over the market than a stumbling along US-China trade deal. Uncertainty is on the rise, not good for stocks. The Volatility Index (VIX) is up a little today to 17½, above the lower teens in in better times. The Dow reaching a new record is being put on hold.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 55.73 | -1.56 | -2.7% |
| GC=F | Gold | 1,536.40 | -3.80 | -0.3% |
With Pres Trump & Japanese PM Abe set to meet at the UN, a trade deal between the 2 nations is falling into place. “The
negotiating process has been completed and the results will be
submitted to the two leaders," said Masato Otaka, Press Secretary,
Foreign Ministry of Japan. "Everything is on track. The important thing
is to focus on the entry into force.” Japan's Foreign Minister Toshimitsu Motegi and US
Trade Representative Robert Lighthizer met on the sidelines of the 74th
UN General Assembly on Mon, “fully
agreed on all trade talks." Motegi told reporters the deal “will be
satisfactory to Japan” & the text would be released today. The 2 sides agreed US tariffs on Japanese automobiles would be rolled
back sometime in the future with no further specification on exact
timing. In exchange for the removal of taxes on Japanese automobiles,
Japan would in turn decrease tariffs against beef imported from the US
from 38.5% to 9%. The
WTO Most Favored Nation (MFN) treatment is still a mainstay of the
multilateral trading system & requires WTO members to provide
favorable trade terms & remove tariff barriers as part of any
bilateral trade agreement with another member. The removal of auto
tariffs on Japanese imports would bring the US into compliance with this
WTO regulation.
Chinese State Councilor & Foreign Minister Wang Yi said in NY that while his country has no intention of unseating the US as the world leader, china expects America to “remove all unreasonable restrictions.” “China-U.S. relations today have once again come to a cross roads,” Wang said, through a translator at a dinner co-hosted by the National Committee on US-China Relations & The US-China Business Council. “While China opens wider to the U.S. and the rest of the world, we expect the U.S. to do the same to China and remove all unreasonable restrictions,” Wang said. “In a word, China’s efforts and achievements of reform and opening up in the past several decades have been widely recognized. They should not be deliberately ignored or denied.” Wang's remarks come as the world's 2 largest economies are locked in escalating trade tensions centered on US complaints about its trade deficit with China, & lack of equal access to the local market. Foreign companies often allege they are forced to transfer key technology in order to operate in China. Access is also uneven. In the last 2 years, the Chinese gov has taken steps to increase foreign access to industries such as securities brokerages & passed a new foreign investment law to improve intellectual property protection & limit forced technology transfers. However, a survey from the American Chamber of Commerce in Shanghai released this month showed that greater access to the domestic market was top on respondents' wish list for any trade agreement. The next round of high-level trade talks is expected to take place in early Oct in DC. Wang said he hoped the negotiations would “produce a positive outcome” & emphasized the business opportunity for America in working with China. “The trade frictions between China and the U.S. in the last year have inflicted losses on both countries, losses that should not have happened,” Wang said, noting both sides should “explore new areas of cooperation.”
China wants the US to ‘remove all unreasonable restrictions’
Sales of new US single-family homes rebounded
more than expected in Aug, the latest sign that the struggling
housing market was starting to get a lift from lower mortgage rates. The
Commerce Dept said new home sales increased 7.1% to a
seasonally adjusted annual rate of 713K units last month, boosted by
a surge in activity in the South & West. Jul's sales pace was
revised up to 666K units from the previously reported 635K units. The forecast called for new home sales, which account for about
11.5% of housing market sales, increasing 3.5% to a pace of 660K
units in Aug. New home sales are drawn from permits & tend to
be volatile on a month-to-month basis. Sales surged 18.0% from a year
ago. The median new house price rose 2.2% to $328K in Aug from a
year ago. The housing market, the most sensitive sector to
interest rates, has perked up in recent months in response to a sharp
drop in mortgage rates. Reports last week showed housing starts &
building permits jumped to a more than 12-year high in Aug & home
resales rose to the highest level in 17 months. The 30-year fixed
mortgage rate has dropped about 120 basis points from last year's highs
to an average of 3.73%, according to data from mortgage finance agency
Freddie Mac. The Federal Reserve last week cut interest rates for
the 2nd time to offset the impact on the economy from a year-long
trade war between the US & China, & slowing global
growth. The central bank lowered rates in Jul for the first time
since 2008. The
recent improvement in housing data has raised optimism that the housing
market could be regaining its footing after hitting a soft patch last
year. Residential investment has contracted for 6 straight qtrs,
the longest such stretch since the 2007-2009 recession. New home
sales in the South, which accounts for the bulk of transactions,
advanced 6.0% in Aug. Sales in the West soared 16.5%. But sales
tumbled 5.9% in the Northeast & fell 3.0% in the Midwest. There
were 326K new homes on the market last month, the fewest since
Sep 2018 & down 1.2% from Jul. At the Aug sales pace, it would
take 5.5 months to clear the supply of houses on the market, down from
5.9 months in Jul. About 63% of the houses sold last month were either under construction or yet to be built.
US new home sales increase more than expected in August
Thoughts of impeachment are making traders very, very nervous. The US economy continues to reasonably well after a long run. But politics can get get even uglier & already has a bad track record in the last 3 years. That may be a bigger dark cloud over the market than a stumbling along US-China trade deal. Uncertainty is on the rise, not good for stocks. The Volatility Index (VIX) is up a little today to 17½, above the lower teens in in better times. The Dow reaching a new record is being put on hold.
Dow Jones Industrials
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