Dow went up 79, advancers over decliners better than 3-2 & NAZ gained 15. The MLP index fell 2 to the 229s & the REIT index rose 1+ to the 409s. Junk bond funds inched higher & Treasuries were flattish in price. Oil dropped 1 to the 55s after the weak jobs report & gold climbed 2 to 1529.
AMJ (Alerian MLP Index tracking fund)
US stocks little changed after jobs report miss
Trade war forces China to defend economy
Job growth falls short of expectations as August payrolls rise just 130,000
The weaker than expected jobs report restrained buying at the opening, but Kudlow's optimistic comments about the phone call with the Chinese brought out buyers. Since then the Dow has risen from break even. Buyers want to take the Dow to new record territory & they are hoping to do that next week.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 55.19 | -1.11 | -2.0% |
| GC=F | Gold | 1,531.60 | +6.10 | +0.4% |
Markets opened slightly higher after the Aug jobs report fell short of expectations. The
Bureau of Labor Statistics said the US economy added 130K non-farm
jobs as the unemployment rate held at 3.7%, remaining near a
50-year low. The forecast called for the addition
of 158K jobs & the unemployment rate to hold at 3.7%. Treasury yields were little changed with the
10-year yield holding near 1.56%. In Europe, stocks were little changed after 2 sessions of gains. Asian shares rose as investors cheered
plans for more trade negotiations between DC & Beijing &
drew encouragement from positive US economic data out yesterday. Hong
Kong's Hang Seng & China's Shanghai Composite saw weekly gains of 3.8% & 3.9%, respectively, making for their biggest weekly
advances since late Jun.
US stocks little changed after jobs report miss
The People's Bank of China announced plans to cut to its reserve requirement ratio in an
effort ignite a slowing economy that has been hurt by the trade war. The
50-basis point cut, which will take place on Sep 16, is designed to
lower borrowing costs & release 900B Chinese yuan into the
economy. Lowering
borrowing costs is an important step for Beijing to take as it looks to
inject liquidity into an economy that is growing at its slowest pace
since 1992. The Chinese economy grew at a 6.2% rate in Q2, impacted by the more than yearlong trade war Beijing & DC. The trade war has seen
the US slap tariffs on more than $350B of Chinese goods &
China tax $185B of US products. It has caused both foreign &
local companies to divert production from China & establish new supply
chains in other countries.
Trade war forces China to defend economy
White House economic advisor Larry Kudlow said recent trade talks with China “went very well.” “The
phone call the night before last with Secretary Mnuchin and Lighthizer
and Vice Premier Liu He went very well. That’s important,” Kudlow said. “The phone lines have been open during this period and the negotiations have been proceeding.” Liu
He, China's top negotiator on trade, Trade Representative Robert
Lighthizer & Treasury Secretary Steve Mnuchin held a phone call on
Wed & agreed to meet in early Oct for another round of
negotiations. “The deputies level [meeting] will continue in
Washington later this month and from that deputies level meetings will
come agenda and outline so the principles with meet early October,”
Kudlow said. “I think this is terribly important.” The USTR
spokesperson said earlier this week both countries “agreed to hold
meetings at the ministerial level in Washington in the coming weeks” &
that deputy-level meetings would take place in mid-Sep “to lay
the ground work for meaningful progress.” Many market participants & China insiders bellieve these new trade talks could lead to something substantial. The 2
countries have been engaged in a trade war for 18 months now. The
meetings will follow the latest round of tariffs on Bs of $s of goods from each country that took effect on Sun.
Job growth continued at a tepid pace in Aug,
with nonfarm payrolls increasing by just 130K thanks in large part to
the temporary hiring of 25K Census workers, the Labor Dept reported. The increase fell short of estimates for
150K, while the unemployment rate stayed at 3.7%, as expected. An
alternative measure of the jobless rate, which includes discouraged &
underemployed workers, increased to 7.2% from 7% in Jul, due mainly to a
397K increase in those working part-time for economic reasons. Wage
growth remained solid, with average hourly earnings increasing by 0.4%
for the month & 3.2% over the year; both numbers were one-tenth of a
percentage point better than expected. Labor force participation
also increased, rising to 63.2%, tying its highest level since 2013. The total number of Americans considered employed surged by
590K to a record 157.9M, according to the household survey,
which is conducted separately from the headline establishment count. The difference between the 2 surveys inspired some optimism. With the previous Jun & Jul reports revised lower as well,
monthly job growth in the US has slowed to just 158K, compared with
223K per month a year ago. The decline comes amid concerns
that the US economy is slowing & perhaps even heading for recession.
While consumers remain strong, agriculture & manufacturing have
declined as the US engages in a protracted tariff battle with China. Excluding gov hiring, private payrolls grew by just 96K, the lowest pace since Feb.
Job growth falls short of expectations as August payrolls rise just 130,000
The weaker than expected jobs report restrained buying at the opening, but Kudlow's optimistic comments about the phone call with the Chinese brought out buyers. Since then the Dow has risen from break even. Buyers want to take the Dow to new record territory & they are hoping to do that next week.
Dow Jones Industrials
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