Dow went up 38, advancers over decliners 3-2 & NAZ lost 15. The MLP index rose 3+ to the 233s & the REIT index fell 2+ to the 406s. Junk bond funds inched higher & Treasuries were sold. Oil rose 1+ to the 58s while gold gave back 6, falling to 1509 (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)
Mnuchin cites ‘conceptual’ enforcement agreement ahead of China trade talks
Consumer borrowing picked up in Jul at the fastest rate in almost 2 years, according to Federal Reserve data. Total consumer credit increased $23.3B. That's an annual growth rate of 6.8%, up from a 4.1% rate in the prior month, the fastest pace since Nov 2017. The forecast expected a $16B gain. Revolving credit, like credit cards, surged 11.2% in Jul, after falling 0.2% in Jun. That's also the highest rate in 20 months. Nonrevolving credit, typically auto & student loans, rose 5.3% in Jul. The data does not include mortgage loans. Economists are directing all of their attention at the health of the consumer with business spending faltering in face of global weakness & trade tension. The strong labor market & rising wages have kept spending at a solid pace this year. But talk of recession could turn into a self-fulfilling prophesy if consumers pull back.
British Prime Minister Boris Johnson stuck to his pledge that the UK would leave the EU on Oct 31—even as a bill aimed at preventing the country from leaving on that date without an agreement became law. In his first meeting with his Irish counterpart, Leo Varadkar, since taking over in Jul, Johnson insisted he wanted to leave the EU with an agreement to smooth its departure from the bloc. Although he outlined some ideas, he didn't give any detail about how he proposed to do it.
The number of tourists visiting Hing Kong suffered one of the biggest drops on record in Aug, one of the clearest indications that months of antigov protests are decimating parts of the local economy. Tourist arrivals in Hong Kong fell 40% last month from a year ago, according to city financial secretary Paul Chan, the worst decline since 2003 when the city was grappling with the SARS virus that killed hundreds of people. In Jul, tourist arrivals had fallen 5% from a year ago. Visitors & shoppers are getting caught up in the clashes, which have sometimes turned violent, quickly move between districts & have shut subway stations for hours at a time. Bystanders are being exposed to tear gas & fire bombs. Months of protests combined with the US-China trade dispute & slowing Chinese growth are threatening to tip Hong Kong's economy into recession, officials have warned.
Gold futures moved lower, giving back earlier gains, as investors favored assets perceived as risky, boosting benchmark US stock indices & dulling the precious metal's haven appeal. However, some commodity experts remain bullish & point to gold's trade above the $1500-an-ounce mark as the demarcation line between bullish & bearish momentum in the commodity. Dec gold fell $5 (0.3%) to trade at $1510 an ounce after trading as high as $1523. The most-active contract fell about 0.9% last week.
Gold pulls back, on track for a 3-session skid
Oil futures rose after Saudi Arabia's new energy minister signaled a continued commitment to production curbs. West Texas Intermediate crude for Oct rose 93¢ (1.7%) to $57.45 a barrel while Nov Brent crude, the global benchmark, was up 45¢ (0.7%) to $61.99 a barrel. Saudi Arabia's King Salman yesterday named one of his sons, Prince Abdulaziz bin Salman, as energy minister, replacing Khalid al-Falih, who had served as the kingdom’s top energy official since 2016. The new Saudi energy minister “comes to office with unprecedented experience, knowledge of oil market economics/politics. He attended more OPEC meetings than any current OPEC official,” independent energy expert Anas Alhajji tweeted following the news. Prince Abdulaziz said the framework of Saudi policy wouldn't change & that an agreement between OPEC & its allies, known as OPEC+, to curb production by 1.2M barrels a day would continue “with the will of everybody” while declining to comment on oil prices. Oil futures saw strong gains last week, ending Fri on a positive note after a decline in the number of active US rigs drilling for crude for a 3rd straight week. WTI, the US benchmark, rose 2.6% last week, while Brent rallied 3.9%.
Crude gains as new Saudi oil minister repeats commitment to production cuts
Stocks started the day with gains, but sellers took the Dow into the red around midday. Limited buying in the last hour was good enough to bring the Dow back into the black, but just barely. The Fed meeting next week along with China talks are on everybody's minds & there is a high level of confusion going forward. Tech stocks were sold after 50 attorneys general brought an anti-trust suit against Google (GOOGL), down 1.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury Secretary Steve Mnuchin said the
US & China have a “conceptual” agreement on enforcement concerns,
emphasizing positive progress already made in trade talks, which are set
to resume at high levels next month. “I think the enforcement area we at least have a conceptual, an agreement on,” Mnuchin said. He also had a warning: Pres Trump has no problem keeping heavy tariffs on Beijing if a deal can't be reached. The 2 economic superpowers have slapped tariffs on hundreds of Bs of $s of each other’s goods since 2018, as the US
pressured China over trade deficits, alleged intellectual property
theft & forced tech transfers, among other issues. The 2 sides
appeared on the cusp of a deal earlier this year. Mnuchin said in Apr
that talks were in “the final laps.” But negotiations fell apart in
early May, leading to a tense summer & further escalation in the
tariff fight. An additional 15% tax on Chinese imports was applied to about $112B worth of goods on Sep 1, with another round currently set to take effect in mid-Dec. China has retaliated with its own tariffs on US imports. Talks
at the “vice-minister level” will take place this month, Mnuchin said,
followed by talks in DC with Vice Premier Liu He in early
Oct. Later, Mnuchin told reporters at
the White House that Yi Gang, governor of the People's Bank of China,
will also participate in the Oct talks. “They’re
coming here. I take that as a sign of good faith that they want to
continue to negotiate, and we’re prepared to negotiate,” Mnuchin added. The Treasury secretary painted a rosy picture of the American
position in the trade war, a regular source of stress & uncertainty
for investors & blamed for contributing to a slowdown in the economy. He
said the Trump administration has “not yet seen any impact on the U.S.
economy” linked to the trade war, and predicted a “very robust finish of
the year” with “no signs of recession” on the horizon. While
there “have been certain situations where there have been difficulties
for companies,” Mnuchin said that Trade Representative Robert
Lighthizer “has done a very good job managing the exception process on a
case-by-case basis.”
Mnuchin cites ‘conceptual’ enforcement agreement ahead of China trade talks
Consumer borrowing picked up in Jul at the fastest rate in almost 2 years, according to Federal Reserve data. Total consumer credit increased $23.3B. That's an annual growth rate of 6.8%, up from a 4.1% rate in the prior month, the fastest pace since Nov 2017. The forecast expected a $16B gain. Revolving credit, like credit cards, surged 11.2% in Jul, after falling 0.2% in Jun. That's also the highest rate in 20 months. Nonrevolving credit, typically auto & student loans, rose 5.3% in Jul. The data does not include mortgage loans. Economists are directing all of their attention at the health of the consumer with business spending faltering in face of global weakness & trade tension. The strong labor market & rising wages have kept spending at a solid pace this year. But talk of recession could turn into a self-fulfilling prophesy if consumers pull back.
Consumer borrowing expands in July at fastest rate in nearly two years
British Prime Minister Boris Johnson stuck to his pledge that the UK would leave the EU on Oct 31—even as a bill aimed at preventing the country from leaving on that date without an agreement became law. In his first meeting with his Irish counterpart, Leo Varadkar, since taking over in Jul, Johnson insisted he wanted to leave the EU with an agreement to smooth its departure from the bloc. Although he outlined some ideas, he didn't give any detail about how he proposed to do it.
Boris Johnson Promises Oct. 31 Brexit as Law Passes to Rule Out No Deal
The number of tourists visiting Hing Kong suffered one of the biggest drops on record in Aug, one of the clearest indications that months of antigov protests are decimating parts of the local economy. Tourist arrivals in Hong Kong fell 40% last month from a year ago, according to city financial secretary Paul Chan, the worst decline since 2003 when the city was grappling with the SARS virus that killed hundreds of people. In Jul, tourist arrivals had fallen 5% from a year ago. Visitors & shoppers are getting caught up in the clashes, which have sometimes turned violent, quickly move between districts & have shut subway stations for hours at a time. Bystanders are being exposed to tear gas & fire bombs. Months of protests combined with the US-China trade dispute & slowing Chinese growth are threatening to tip Hong Kong's economy into recession, officials have warned.
Amid protests, Hong Kong’s tourism suffers worst month since 2003
Gold futures moved lower, giving back earlier gains, as investors favored assets perceived as risky, boosting benchmark US stock indices & dulling the precious metal's haven appeal. However, some commodity experts remain bullish & point to gold's trade above the $1500-an-ounce mark as the demarcation line between bullish & bearish momentum in the commodity. Dec gold fell $5 (0.3%) to trade at $1510 an ounce after trading as high as $1523. The most-active contract fell about 0.9% last week.
Gold pulls back, on track for a 3-session skid
Oil futures rose after Saudi Arabia's new energy minister signaled a continued commitment to production curbs. West Texas Intermediate crude for Oct rose 93¢ (1.7%) to $57.45 a barrel while Nov Brent crude, the global benchmark, was up 45¢ (0.7%) to $61.99 a barrel. Saudi Arabia's King Salman yesterday named one of his sons, Prince Abdulaziz bin Salman, as energy minister, replacing Khalid al-Falih, who had served as the kingdom’s top energy official since 2016. The new Saudi energy minister “comes to office with unprecedented experience, knowledge of oil market economics/politics. He attended more OPEC meetings than any current OPEC official,” independent energy expert Anas Alhajji tweeted following the news. Prince Abdulaziz said the framework of Saudi policy wouldn't change & that an agreement between OPEC & its allies, known as OPEC+, to curb production by 1.2M barrels a day would continue “with the will of everybody” while declining to comment on oil prices. Oil futures saw strong gains last week, ending Fri on a positive note after a decline in the number of active US rigs drilling for crude for a 3rd straight week. WTI, the US benchmark, rose 2.6% last week, while Brent rallied 3.9%.
Crude gains as new Saudi oil minister repeats commitment to production cuts
Stocks started the day with gains, but sellers took the Dow into the red around midday. Limited buying in the last hour was good enough to bring the Dow back into the black, but just barely. The Fed meeting next week along with China talks are on everybody's minds & there is a high level of confusion going forward. Tech stocks were sold after 50 attorneys general brought an anti-trust suit against Google (GOOGL), down 1.
Dow Jones Industrials
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