Dow rose 69 with a little selling into the close, advancers over decliners 3-2 & NAZ lost 13. The MLP index fell 1+ to the 229s & the REIT index was fractionally higher in the 408s (just below the record high made this week). Junk bond funds inched higher & Treasuries were a little weaker. Oil went up in the 56s & gold gave back 12 to 1513 (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)
Federal Reserve Chair Jerome Powell said he does not foresee the US sliding into a recession soon, despite a slowdown in global growth and uncertainties surrounding the US-China trade war. "I wouldn't see the recession as the most likely outcome in the U.S.," he said during a question-and-answer session after a speech. Powell said that data shows the US economy will continue to expand at a moderate pace, with a strong labor market & inflation hovering around the Fed's 2% target. However, he acknowledged there are competing threats to the economic picture, including persistently low inflation & the trade war, which he said is weighing on business investment & confidence. Economists recently estimated the latest round of tariffs imposed on Chinese goods by the Trump administration could cost the average American household an additional $460 per year. “The most likely outlook is still moderate growth, a strong labor market and inflation continuing to move back up," Powell added. Still, the Fed, & Powell, have become a favorite punching bag of Pres Trump, who has said that rates are too high & hurting the ability of the US to compete globally. But Powell said that lower interest rates have helped to keep the US economy in a good place. Policymakers at the FOMC lowered the interbank lending rate by 25 basis points in Jul for the first time since the financial crisis. At the time, they cited "global developments in the economic outlook as well as muted inflation pressures." Since Jul, however, the economic outlook has continued to darken: A frequently watched recession indicator flashed red in Aug when 2-year Treasury yields rose above 10-year yields; manufacturing contracted in the US & the EU; job growth slowed in the US last month; & heightened trade tensions continued to weigh on the stock markets. Fed officials are widely expected to lower the benchmark federal funds rate by another qtr-point during their meeting later this month. "We're going to act as appropriate to sustain the expansion," Powell said. "I don't have anything other than that to say here tonight."
Gold futures settled lower, giving up earlier gains to post a loss for the week, after Federal Reserve Chair Jerome Powell offered an upbeat view on the US economy, dulling demand for the haven metal. Prices had been trading higher before Powell spoke toiday, finding support after a report on the health of the US labor market came in softer than expected. The US created a lackluster 139K new jobs in Aug, adding to evidence that hiring has slowed sharply in 2019. The increase in new jobs fell well short of the 170K forecast. In a speech today, however, Powell said the job report is a sign of continued strength in the labor market. He also said the outlook for the economy remains favorable & the Federal Reserve is “not forecasting or expecting a recession.” Dec gold fell $10 (0.7%) to settle at $1515.50 an ounce, after trading as high as $1536. For the week, the most-active contract fell about 0.9%. Bullion fell 2.2% on yesterday to settle at a 2-week low, marking their biggest single-session percentage decline since Jun 2018 & largest daily $ loss since Nov 2016. Upbeat reports on yesterday, including one on private-sector payrolls from Automatic Data Processing & data from ISM, which saw its index of activity in the services sector indicate accelerating growth, helped to drive investors away from assets considered havens, including bonds & gold, & toward riskier assets like stocks. However, the jobs report helps to support the case for a rate cut by the Fed at the conclusion of its 2-day policy meeting on Sep 18. Against the backdrop of growing fears of a recession inside & outside the US, gold has prospered, up more than 18% so far this year, despite yesterday's decline. By comparison, the Dow has climbed about 15%, while the S&P 500 index has advanced 19%. Bullish traders say that fears of a market-disruptive exit by Britain from the EU & the unresolved China-US trade spat also remain key drivers for bullion. However, some investors argue that the rally has gotten ahead of itself, drawing investors that have been zealously purchasing gold in the face of some $17T in gov debt that yields less than 0%. Gold benefits from lower interest rates because it doesn't bear a yield.
Oil futures reversed course to finish higher, with a 3rd-weekly decline in the number of active US rigs drilling for oil contributing to a price rise for the week. The fall in the rig count, along with a gov report issued a day earlier also showing a 3rd week of falling domestic crude supplies, helped calm trade war-related worries about energy demand. Baker Hughes reported that the number of actibe US rigs drilling for oil declined by 4 to 738 this week, following 2 consecutive weekly declines in the oil-rig count. The data followed a 3rd-straight weekly decline in US crude inventories. Yesterday, the Energy Information Administration said US crude supplies declined by 4.8 M barrels last week. West Texas Intermediate (WTI) crude for Oct tacked on 22¢ (0.4%) to settle at $56.52 a barrel after ending yesterday a few ¢-per-barrel higher. WTI saw a weekly gain of 2.6%, based on the most-active contract. The global benchmark, Nov Brent crude rose 59¢ (1%) to end at $61.54 a barrel. It tallied a weekly rise of 3.9%. Prices on yesterday got an initial boost from the US supply decline, then erased nearly all of their gains by the end of that session. Oil has gained this week on the back of news of heightened tensions in the Middle East, which could disrupt supplies & optimism that the US & China may come back to the negotiating table to hammer out a resolution to their yearlong trade dispute.
Stocks began the week & new month with a loss, but with buying during the rest of the week the Dow finished with a gain of 400. Thoughts of a rate cut by the Fed this week, good word about a US-China trade deal & Powell's comments easing recession fears brought out buyers. Over the short term, the China trade deal remains center stage for traders & that will be subject to stories about progress or the lack of progress.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Federal Reserve Chair Jerome Powell said he does not foresee the US sliding into a recession soon, despite a slowdown in global growth and uncertainties surrounding the US-China trade war. "I wouldn't see the recession as the most likely outcome in the U.S.," he said during a question-and-answer session after a speech. Powell said that data shows the US economy will continue to expand at a moderate pace, with a strong labor market & inflation hovering around the Fed's 2% target. However, he acknowledged there are competing threats to the economic picture, including persistently low inflation & the trade war, which he said is weighing on business investment & confidence. Economists recently estimated the latest round of tariffs imposed on Chinese goods by the Trump administration could cost the average American household an additional $460 per year. “The most likely outlook is still moderate growth, a strong labor market and inflation continuing to move back up," Powell added. Still, the Fed, & Powell, have become a favorite punching bag of Pres Trump, who has said that rates are too high & hurting the ability of the US to compete globally. But Powell said that lower interest rates have helped to keep the US economy in a good place. Policymakers at the FOMC lowered the interbank lending rate by 25 basis points in Jul for the first time since the financial crisis. At the time, they cited "global developments in the economic outlook as well as muted inflation pressures." Since Jul, however, the economic outlook has continued to darken: A frequently watched recession indicator flashed red in Aug when 2-year Treasury yields rose above 10-year yields; manufacturing contracted in the US & the EU; job growth slowed in the US last month; & heightened trade tensions continued to weigh on the stock markets. Fed officials are widely expected to lower the benchmark federal funds rate by another qtr-point during their meeting later this month. "We're going to act as appropriate to sustain the expansion," Powell said. "I don't have anything other than that to say here tonight."
FED'S POWELL SAYS HE DOESN'T FORESEE A US RECESSION
Gold futures settled lower, giving up earlier gains to post a loss for the week, after Federal Reserve Chair Jerome Powell offered an upbeat view on the US economy, dulling demand for the haven metal. Prices had been trading higher before Powell spoke toiday, finding support after a report on the health of the US labor market came in softer than expected. The US created a lackluster 139K new jobs in Aug, adding to evidence that hiring has slowed sharply in 2019. The increase in new jobs fell well short of the 170K forecast. In a speech today, however, Powell said the job report is a sign of continued strength in the labor market. He also said the outlook for the economy remains favorable & the Federal Reserve is “not forecasting or expecting a recession.” Dec gold fell $10 (0.7%) to settle at $1515.50 an ounce, after trading as high as $1536. For the week, the most-active contract fell about 0.9%. Bullion fell 2.2% on yesterday to settle at a 2-week low, marking their biggest single-session percentage decline since Jun 2018 & largest daily $ loss since Nov 2016. Upbeat reports on yesterday, including one on private-sector payrolls from Automatic Data Processing & data from ISM, which saw its index of activity in the services sector indicate accelerating growth, helped to drive investors away from assets considered havens, including bonds & gold, & toward riskier assets like stocks. However, the jobs report helps to support the case for a rate cut by the Fed at the conclusion of its 2-day policy meeting on Sep 18. Against the backdrop of growing fears of a recession inside & outside the US, gold has prospered, up more than 18% so far this year, despite yesterday's decline. By comparison, the Dow has climbed about 15%, while the S&P 500 index has advanced 19%. Bullish traders say that fears of a market-disruptive exit by Britain from the EU & the unresolved China-US trade spat also remain key drivers for bullion. However, some investors argue that the rally has gotten ahead of itself, drawing investors that have been zealously purchasing gold in the face of some $17T in gov debt that yields less than 0%. Gold benefits from lower interest rates because it doesn't bear a yield.
Gold posts a loss for the session and week as Powell eases worries about the economy
Oil futures reversed course to finish higher, with a 3rd-weekly decline in the number of active US rigs drilling for oil contributing to a price rise for the week. The fall in the rig count, along with a gov report issued a day earlier also showing a 3rd week of falling domestic crude supplies, helped calm trade war-related worries about energy demand. Baker Hughes reported that the number of actibe US rigs drilling for oil declined by 4 to 738 this week, following 2 consecutive weekly declines in the oil-rig count. The data followed a 3rd-straight weekly decline in US crude inventories. Yesterday, the Energy Information Administration said US crude supplies declined by 4.8 M barrels last week. West Texas Intermediate (WTI) crude for Oct tacked on 22¢ (0.4%) to settle at $56.52 a barrel after ending yesterday a few ¢-per-barrel higher. WTI saw a weekly gain of 2.6%, based on the most-active contract. The global benchmark, Nov Brent crude rose 59¢ (1%) to end at $61.54 a barrel. It tallied a weekly rise of 3.9%. Prices on yesterday got an initial boost from the US supply decline, then erased nearly all of their gains by the end of that session. Oil has gained this week on the back of news of heightened tensions in the Middle East, which could disrupt supplies & optimism that the US & China may come back to the negotiating table to hammer out a resolution to their yearlong trade dispute.
Oil ends higher on the back of third weekly decline in U.S. oil-drilling rigs
Stocks began the week & new month with a loss, but with buying during the rest of the week the Dow finished with a gain of 400. Thoughts of a rate cut by the Fed this week, good word about a US-China trade deal & Powell's comments easing recession fears brought out buyers. Over the short term, the China trade deal remains center stage for traders & that will be subject to stories about progress or the lack of progress.
Dow Jones Industrials
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