Dow surged 477, advancers over decliners about 3-1 & NAZ soared 155. The MLP index added 2+ to the 233s & the REIT index were off 2 to 409 following its recent rally. Junk bond funds were mixed & Treasuries dropped in price, bringing higher yields. Oil rose to 57 & gold pulled back 37 to 1523 while stocks were being purchased.
AMJ (Alerian MLP Index tracking fund)
Stocks jumped following better-than-expected jobs data & news that US & Chinese trade negotiations have set another round of talks for next month. Private employers added 195K jobs in Aug, according to the latest ADP National Employment Report, surging past expectations of 149K even as recession fears continue to mount. Most hiring took place in the service-providing sector, with 184K new jobs created. Manufacturing hiring remained fairly steady, with 8K jobs added. Pres Trump celebrated the "really good jobs numbers" in a tweet: The data bodes well for the employment report due tomorrow. Employers are expected to have created 158K jobs in Aug, slightly less than the prior month & the unemployment rate is expected to hold steady at 3.7%. Easing of tensions in Hong Kong also boosted markets as Hong Kong leader Carrie Lam withdrew an extradition bill that had led to months of violent protests. In Europe, London's FTSE traded lower by 0.6%, the German Dax added 0.9% & France's CAC traded up 0.9%.
On the heels of the Commerce Dept's announcement it is imposing anti-dumping tariffs on certain steel from China & Mexico, officials from the Mexican gov downplayed the move. Mexico said the tariffs are part of a normal investigation & added that the "investigation in question is ongoing and the final outcome from the Commerce Department is expected at the end of January 2020." US Commerce officials said that a preliminary review found that China & Mexico had "dumped" certain fabricated structural steel on the US market. Anti-dumping traditionally occurs when a foreign manufacturer sells goods in the US for less than the fair market value & causes harm to US-based companies. The new tariffs will focus on fabricated steel often used in major building projects. Steel fabrication is the process of combining different manufactured structural steel parts through welding, assembling or fabricating. These tariffs latest salvo the Trump Administration's trade war with China, with each country imposing tariffs on each other in retaliation. Some tariffs on everyday items, like clothing & footwear, could cost the average household several hundred $s a year. Tariffs on products like steel are harder to estimate a cost for the average consumer -- but have the potential to affect car prices & loss of jobs in the auto industry. "The strict enforcement of U.S. trade law is a primary focus of the Trump Administration," according to the statement. "Since the beginning of the current administration, Commerce has initiated 182 new antidumping and countervailing duty investigations — a 231% increase from the comparable period in the previous administration."
The previous 18 months of trade talks between the US & China have only led to more tit-for-tat tariffs, but this time it might be different, according to Chinese sources who seem to have inside knowledge on the trade war. China's Ministry of Commerce confirmed the 2 countries held a phone call today & agreed to meet in early Oct in DC. This would mark the 13th round of trade negotiations after both sides slapping tariffs on Bs of $s worth of each other’s goods. “There’s more possibility of a breakthrough between the two sides,” said Hu Xijin. Hu is editor-in-chief of the Global Times, a tabloid under the People's Daily, which is the official newspaper of the Communist Party of China. His Twitter account has been followed by many traders & market participants for insight on the trade war. Hu has been spot on with the recent developments in the escalated trade war. Most recently, he had warned about the Chinese retaliation against Pres Trump's tariffs just hours before the Chinese made the official announcement.
Reliable China insiders hint that this round of trade talks could lead to a ‘breakthrough’
Factory orders rose 1.4% in Jul, for the 2nd straight monthly gain, the Commerce Dept said. The increase was led by volatile civilian aircraft orders, primarily Boeing (BA), a Dow stock). The forecast called for a 1.2% increase. Orders in the prior month were revised to a 0.5% gain from the prior estimate of 0.6%. Durable goods orders rose 2% in Jul, revised down slightly from last week's initial estimate of a 2.1% gain. Orders for nondurable goods rose 0.8%. Core factory orders, excluding defense goods & civilian aircraft, rose a revised 0.2% in Jul, down from the initial estimate of a 0.4% gain. Shipments of core goods fell 0.6% in Jul.
Stocks had a rough time on the first day of trading in Sep. Since then, buyers have returned on hopes for a deal coming from trade talks. Economic data for Jul/Aug has also been been favorable. Dow is up an impressive 700 in the last 2 days. The bulls have the challenge of extending this rally. The Dow needs another 600 to reach yet another record.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 56.70 | +0.44 | +0.8% |
| GC=F | Gold | 1,536.00 | -24.40 | -1.6% |
Stocks jumped following better-than-expected jobs data & news that US & Chinese trade negotiations have set another round of talks for next month. Private employers added 195K jobs in Aug, according to the latest ADP National Employment Report, surging past expectations of 149K even as recession fears continue to mount. Most hiring took place in the service-providing sector, with 184K new jobs created. Manufacturing hiring remained fairly steady, with 8K jobs added. Pres Trump celebrated the "really good jobs numbers" in a tweet: The data bodes well for the employment report due tomorrow. Employers are expected to have created 158K jobs in Aug, slightly less than the prior month & the unemployment rate is expected to hold steady at 3.7%. Easing of tensions in Hong Kong also boosted markets as Hong Kong leader Carrie Lam withdrew an extradition bill that had led to months of violent protests. In Europe, London's FTSE traded lower by 0.6%, the German Dax added 0.9% & France's CAC traded up 0.9%.
Stock rally rolls on fueled by jobs, trade progress
On the heels of the Commerce Dept's announcement it is imposing anti-dumping tariffs on certain steel from China & Mexico, officials from the Mexican gov downplayed the move. Mexico said the tariffs are part of a normal investigation & added that the "investigation in question is ongoing and the final outcome from the Commerce Department is expected at the end of January 2020." US Commerce officials said that a preliminary review found that China & Mexico had "dumped" certain fabricated structural steel on the US market. Anti-dumping traditionally occurs when a foreign manufacturer sells goods in the US for less than the fair market value & causes harm to US-based companies. The new tariffs will focus on fabricated steel often used in major building projects. Steel fabrication is the process of combining different manufactured structural steel parts through welding, assembling or fabricating. These tariffs latest salvo the Trump Administration's trade war with China, with each country imposing tariffs on each other in retaliation. Some tariffs on everyday items, like clothing & footwear, could cost the average household several hundred $s a year. Tariffs on products like steel are harder to estimate a cost for the average consumer -- but have the potential to affect car prices & loss of jobs in the auto industry. "The strict enforcement of U.S. trade law is a primary focus of the Trump Administration," according to the statement. "Since the beginning of the current administration, Commerce has initiated 182 new antidumping and countervailing duty investigations — a 231% increase from the comparable period in the previous administration."
Mexico responds to US 'anti-dumping' tariffs on steel
The previous 18 months of trade talks between the US & China have only led to more tit-for-tat tariffs, but this time it might be different, according to Chinese sources who seem to have inside knowledge on the trade war. China's Ministry of Commerce confirmed the 2 countries held a phone call today & agreed to meet in early Oct in DC. This would mark the 13th round of trade negotiations after both sides slapping tariffs on Bs of $s worth of each other’s goods. “There’s more possibility of a breakthrough between the two sides,” said Hu Xijin. Hu is editor-in-chief of the Global Times, a tabloid under the People's Daily, which is the official newspaper of the Communist Party of China. His Twitter account has been followed by many traders & market participants for insight on the trade war. Hu has been spot on with the recent developments in the escalated trade war. Most recently, he had warned about the Chinese retaliation against Pres Trump's tariffs just hours before the Chinese made the official announcement.
Reliable China insiders hint that this round of trade talks could lead to a ‘breakthrough’
Factory orders rose 1.4% in Jul, for the 2nd straight monthly gain, the Commerce Dept said. The increase was led by volatile civilian aircraft orders, primarily Boeing (BA), a Dow stock). The forecast called for a 1.2% increase. Orders in the prior month were revised to a 0.5% gain from the prior estimate of 0.6%. Durable goods orders rose 2% in Jul, revised down slightly from last week's initial estimate of a 2.1% gain. Orders for nondurable goods rose 0.8%. Core factory orders, excluding defense goods & civilian aircraft, rose a revised 0.2% in Jul, down from the initial estimate of a 0.4% gain. Shipments of core goods fell 0.6% in Jul.
U.S. factory orders rise for second straight month in July
Stocks had a rough time on the first day of trading in Sep. Since then, buyers have returned on hopes for a deal coming from trade talks. Economic data for Jul/Aug has also been been favorable. Dow is up an impressive 700 in the last 2 days. The bulls have the challenge of extending this rally. The Dow needs another 600 to reach yet another record.
Dow Jones Industrials
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