Dow finished down 52 (ending near the lows), advancers ahead of decliner 4-3 & NAZ finished up 5 at the close. The MLP index fell 1+ to the 239s & the REIT index continued up 1+ to the 407s. Junk bond funds were mixed & Treasuries had modest gains. Oil was up pennies in the 58s & gold fell 10 to 1505 (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)
VP Mike Pence recommended that other nations plagued with slower growth ought to imitate US policies, even as he recommended the US imitate theirs. In an interview, Pence bragged about how well the domestic economy is doing & said he has had conversations with multiple intl leaders on the subject. “I’ve heard one foreign leader after another congratulate the president on America’s economic success,” he said. Pence said those countries should “look in the mirror” because the global slowdown is “the result of their policies.” “They ought to be emulating our policies,” he added. However, a few minutes earlier he advocated that the US, at least in terms of monetary policy, should be taking after other regions like Europe & Japan who keep their benchmark interest rates near zero. The Federal Reserve increased its short-term borrowing rate 9 times between Dec 2015 & Dec 2018, following that with 2 rate cuts this year. But Trump has blasted the Fed for the rate hikes, saying they’re making the US less competitive on the global stage. Pence would not commit to a zero-rate policy, saying only “I support the president” when asked whether he is a believer in the strategy the Fed followed for 7 years during & after the financial crisis. He did reiterate Trump's criticisms, though in less harsh terms than a pres who has called the central bankers “boneheads.” “I support the president in his call for monetary policy that levels the playing field for our economy with other economies around the world,” he said.
Pence says other countries should ‘emulate’ US, then says US should replicate their rate policies
Chinese trade negotiators plan to visit US farm country after Washington talks
Sales of previously owned US homes rose in Aug, adding to recent modest signs of recovery in the housing market. Existing-home sales rose 1.3% in Aug from the previous month to a seasonally adjusted annual rate of 5.49M, the National Association of Realtors said. That was the strongest pace of sales since Mar of last year. The forecast called for sales to fall 1.1% last month.
Gold prices ended lower, marking their first loss in 4 sessions, a day after the Federal Reserve delivered a widely expected interest rate cut but left traders uncertain on the outlook for further monetary easing. Fed policy makers yesterday cut the Fed's benchmark rate by a qtr of a point, but the move saw 3 dissents — with 2 officials urging rates to remain unchanged & one calling for a larger cut. Gold for Dec fell $9.60 (0.6%) to settle at $1506 an ounce.
Gold logs first loss in 4 sessions after Fed delivers ‘hawkish cut’ to interest rates
Oil futures rose, but US prices gave up nearly all of their earlier gains by the settlement. Prices found support as Saudi Arabia reportedly contacted foreign producers to help fill holes in its supply chain following last weekend's attacks on the country's production facilities. However, news of storm disruptions to refining activity in Texas suggested a slowdown in demand for crude, prompting US prices to give up nearly all of the day's gains. The Sabine Ship Channel, a major Southeast Texas waterway for transporting cargo, was closed early today because of flooding from Tropical Storm Imelda. Oct West Texas Intermediate oil rose 2¢ to settle at $58.13 a barrel.
With a lack of dramatic news, buyers went home early leaving sellers to run the market. The US-Mexico-Canada trade deal remains in limbo & China talks are not moving forward. Then there is growing uncertainty about the Fed's next move in interest rates. But stock averages are close to record highs with all the uncertainty about intl trade. War talk in the Mideast is a major dark cloud keeping some investors on the sidelines.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Whie House economic adviser Larry Kudlow said the “fundamental nature” of the US-Mexico-Canada trade agreement (USMCA) is very pro-growth. “Canada
and Mexico are so important, our total trade with those two countries
is twice what our total trade is with China, for example,” he said. “And China may be a sexier global story, but for the American economy -- various
estimates -- half a point of additional GDP per year, maybe 180,000 jobs
per year and maybe a $100 billion of direct investment.” he said. Earlier, VP Mike Pence said the agreement would pass if it was brought to the floor of the House & the Senate. “It
so much comes down to Speaker Nancy Pelosi, who I believe has been
dealing with our administration in good faith on this issue,” said
Pence. House Dems are seeking tougher enforcement mechanisms related to the USMCA's rules for labor & the environment. Kudlow
said Trade Representative Robert Lighthizer is looking to
negotiate a deal that includes raising domestic content for
manufacturers with higher wages, opening up farm & dairy areas with
Canada, intellectual property rights & copyright protections,
financial services, currency stability & digital services. “That's
a powerful deal. The sooner we get it passed the sooner it's going to
act positively on the economy,” he said, adding that “the job
implications are terrific.” USMCA calls for a larger portion of autos to be made in the US with higher wages for auto workers. Mexico, in Jun, became the first country to ratify the trade deal. Trump, in May, removed steel & aluminum tariffs on Canada & Mexico.
USMCA CAN BRING $100B OF DIRECT INVESTMENT INTO US: LARRY KUDLOW
VP Mike Pence recommended that other nations plagued with slower growth ought to imitate US policies, even as he recommended the US imitate theirs. In an interview, Pence bragged about how well the domestic economy is doing & said he has had conversations with multiple intl leaders on the subject. “I’ve heard one foreign leader after another congratulate the president on America’s economic success,” he said. Pence said those countries should “look in the mirror” because the global slowdown is “the result of their policies.” “They ought to be emulating our policies,” he added. However, a few minutes earlier he advocated that the US, at least in terms of monetary policy, should be taking after other regions like Europe & Japan who keep their benchmark interest rates near zero. The Federal Reserve increased its short-term borrowing rate 9 times between Dec 2015 & Dec 2018, following that with 2 rate cuts this year. But Trump has blasted the Fed for the rate hikes, saying they’re making the US less competitive on the global stage. Pence would not commit to a zero-rate policy, saying only “I support the president” when asked whether he is a believer in the strategy the Fed followed for 7 years during & after the financial crisis. He did reiterate Trump's criticisms, though in less harsh terms than a pres who has called the central bankers “boneheads.” “I support the president in his call for monetary policy that levels the playing field for our economy with other economies around the world,” he said.
Pence says other countries should ‘emulate’ US, then says US should replicate their rate policies
After trade talks with Chinese negotiators wrap in DC this week, a small group of those officials are planning a
trip to farm country to meet face-to-face with the producers whose
finances have been deteriorating as the trade war drags on. The
delegation, led by Vice Minister for Agriculture Qu Dongyu, is currently
planning follow-on visits to Bozeman, Montana & Omaha, Nebraska. The Montana Farm
Bureau confirmed a Chinese delegation would be visiting with
farmers in the state early next week. The
visit could bring a welcome salve to farmers caught in the crosshairs
of the trade war if it results in a reopening of the market. In response
to escalating US tariffs, China has placed tariffs on & halted
state purchases of US agricultural products. Wheat
farmers in Montana saw sales to China drop to almost nothing since Mar
of 2018. That compares with $65M annually in 2012 -2017 in Montana alone. In
lieu of a trade deal, the Dept of Agriculture has rolled out
a 2nd tranche of aid for farmers facing an absence of customers. In
total, USDA has authorized $28B in aid to help affected farmers. “I
think it’s very clear that our farmers this year, when these talks with
China did not proceed as we had hoped, again continued to be affected
by tariff damages,” Agriculture Sec Sonny Perdue told reporters when
the latest program was announced in Jul. “I think it’s entirely
justifiable.” Perdue said that Pres Trump was
insisting China purchase ag products “as a way to unfreeze our
discussions [with Beijing].” In Jun, Pres Trump said China would
be buying “massive amounts” of US farm products as a result of a
bilateral meeting between himself & China’s Xi Jinping. So far, those
purchases have not materialized. People briefed on the bilateral meeting
say China said it would “consider” purchasing farm products but made no
concrete commitment.
Chinese trade negotiators plan to visit US farm country after Washington talks
Sales of previously owned US homes rose in Aug, adding to recent modest signs of recovery in the housing market. Existing-home sales rose 1.3% in Aug from the previous month to a seasonally adjusted annual rate of 5.49M, the National Association of Realtors said. That was the strongest pace of sales since Mar of last year. The forecast called for sales to fall 1.1% last month.
U.S. Existing-Home Sales Rose in August
Gold prices ended lower, marking their first loss in 4 sessions, a day after the Federal Reserve delivered a widely expected interest rate cut but left traders uncertain on the outlook for further monetary easing. Fed policy makers yesterday cut the Fed's benchmark rate by a qtr of a point, but the move saw 3 dissents — with 2 officials urging rates to remain unchanged & one calling for a larger cut. Gold for Dec fell $9.60 (0.6%) to settle at $1506 an ounce.
Gold logs first loss in 4 sessions after Fed delivers ‘hawkish cut’ to interest rates
Oil futures rose, but US prices gave up nearly all of their earlier gains by the settlement. Prices found support as Saudi Arabia reportedly contacted foreign producers to help fill holes in its supply chain following last weekend's attacks on the country's production facilities. However, news of storm disruptions to refining activity in Texas suggested a slowdown in demand for crude, prompting US prices to give up nearly all of the day's gains. The Sabine Ship Channel, a major Southeast Texas waterway for transporting cargo, was closed early today because of flooding from Tropical Storm Imelda. Oct West Texas Intermediate oil rose 2¢ to settle at $58.13 a barrel.
U.S. oil prices pare most of their gains as gasoline futures rally
With a lack of dramatic news, buyers went home early leaving sellers to run the market. The US-Mexico-Canada trade deal remains in limbo & China talks are not moving forward. Then there is growing uncertainty about the Fed's next move in interest rates. But stock averages are close to record highs with all the uncertainty about intl trade. War talk in the Mideast is a major dark cloud keeping some investors on the sidelines.
Dow Jones Industrials
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