Dow went up 115, advancers slightly ahead of decliners & NAZ
gained 27. The MLP index gave back 1+, falling to 217 (more than 11
year low), & the REIT index added 1+ to the 413s. Junk bond funds
fluctuated & Treasuries were bid higher. Oil dropped to the 54s
& gold rose 4 to 1498 (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)
The Federal Reserve cut interest rates by a qtr-percentage point for the 3rd time this year to cushion the economy against the US-China trade dispute & a global growth slowdown, but signaled that it was pressing pause on future easing. During its 2-day meeting, the FOMC voted, as expected, to ease the benchmark federal funds rate by 25 basis points to 1.5-1.75%. 8 of the 10 officials voted in favor of lowering rates, with Boston Fed Pres Eric Rosengren & Kansas City Fed Pres Esther George dissenting from the decision. This was the 3rd cut this year, part of a "mid-cycle adjustment" that began in Jul in order to preserve the 11-year economic expansion. Although the central bank did not fully close the door to further action, it hinted that it will wait & see before lowering the benchmark federal funds rate again. "We believe monetary policy is in a good place," Chair Jerome Powell said. The Fed replaced a key phrase that had appeared in its policy statement all summer saying it was committed to "act as appropriate" to sustain the economic expansion. In its place was slightly more hawkish language. "The committee will continue to monitor the implications of upcoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate," the statement said. Powell said policymakers believe the current stance of policy will remain appropriate, so long as the economic outlook, including the strong labor market & solid consumer spending, stay the same. He pointed to mitigated risks, like the US & China inching closer toward signing phase one of a trade deal and the reduced risk of a hard Brexit. "That has the potential for being an improvement in the risk picture," he said. However, Powell stressed that if developments emerged that cause a material reassessment of the bank's outlook, "we would respond accordingly." "Policy is not on a preset course," he added. The Fed said the economy is growing at a "moderate" pace boosted by a strong labor market, but business investments are weak & "uncertainties" about the outlook remain. It expects growth to cool slightly this year & next to around 2%. The decision comes the same day the government reported Q3 GDP growth of 1.9%; though slower than previous qtrs, it topped the annualized 1.6% forecast. For consumers, lower interest rates — which affect borrowing costs, including auto loan rates & 30-year-fixed mortgage rates — can mean thousands of $s in savings.
Demand for mortgages increased in the past week even as mortgage rates rose to the highest in 3 months. Mortgage applications rose 0.6% in the past week, according to the Mortgage Bankers Association's Weekly Mortgage Application Survey. Mortgage rates increased for the 2nd straight week with the 30-year fixed rate climbing to 4.05%, the highest level since the end of Jul. The seasonally adjusted purchase index rose 2% from last week, the highest level since the end of Jul. The refinancing index decreased 1% from the previous week & was 134% higher than the same week a year ago. The refinance share of mortgage activity accounted for 58% of total applications, slipping from 58.5% in the prior week.
Treasury Secretary Steve Mnuchin said that it will take time for Chinese purchases of US agricultural goods to “scale up” to the $40-50B annual level touted by Pres Trump if the 2 sides can seal a “Phase 1″ trade deal. Mnuchin added in Saudi Arabia that the $40-50B target is “a lot,” but is based on “very specific discussions” of product purchase commitments by China. “This is built on a bottom-up basis of both what we think we can deliver and what they think they need,” Mnuchin said. “It’s a one-year target, but obviously it’s going to take some time to scale up.”
Mnuchin says agricultural sales to China will ‘take time to scale up’ to $40-50 billion
Gold futures settled higher, after posting back-to-back declines, then headed lower after the Federal Reserve cut its benchmark interest rate but said it would monitor the economic outlook as it assesses its next decision on rates. The Federal Reserve cut its benchmark interest rate, by a qtr percentage point to 1.5-1.75%. The central bank signaled it may pause to see whether these easing steps are enough to sustain the economic expansion. In electronic trading shortly after the Fed news, gold for Dec traded at $1490 an ounce. Before the decision, prices for the contract had climbed $6 (0.4%) to settle at $1496 an ounce. The yellow metal had briefly trimmed some of earlier gains after data showed Q3 GDP expanded at a 1.9% annual pace, slowing from 2% in Q2 but coming in above the average forecast by economists for growth of 1.6%. The GDP data had reinforced expectations the Fed will seek to cool expectations for additional rate cuts. Traders have already scaled back bets for further interest-rate reductions later this year & in 2020. Fed monetary policy easing is seen as a positive for gold for a variety of reasons, including downward pressure on bond yields, which reduces the opportunity cost of holding non-yielding assets like commodities . Lower interest rates can also put pressure on the $, making gold & other commodities priced in the product less expensive to users of other currencies.
Gold settles higher after back-to-back declines, then falls after Fed decision
Oil futures ended at their lowest in just over a week after the Energy Information Administration (EIA) reported a larger-than-expected weekly US crude-supply increase of almost 6M barrels, but gasoline inventories declined a bit more than forecast. West Texas Intermediate crude for Dec fell 48¢ (0.9%) to settle at $55.06 a barrel. Front-month Dec Brent crude, which expires tomorrow, fell 98¢ (1.6%) to $60.61 a barrel. Both crude benchmarks marked their lowest settlements since Oct 22. The EIA reported that US crude supplies rose by 5.7M barrels last week. Crude supplies were forecast to increase by 2.5M barrels. The American Petroleum Institute released its data to media today, revealing a weekly fall of 708K barrels in crude inventories. The market saw conflicting API data from secondary sources yesterday, when the API issued its figures to its members.
Oil prices end at 1-week low as EIA shows nearly 6 million-barrel weekly rise in U.S. supplies
The news from the Fed was not surprising. There was one more rate cut & future events will define if it's necessary for more cuts. However, the big news is the cancellation of the intl meeting in Chile which raises doubts about signing phase 1 of the trade deal with China. The negotiators are undoubtedly looking for alternatives so the deal can move forward. The Dow shot up 100 after the rate cut news, coming closer to setting a new record.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Federal Reserve cut interest rates by a qtr-percentage point for the 3rd time this year to cushion the economy against the US-China trade dispute & a global growth slowdown, but signaled that it was pressing pause on future easing. During its 2-day meeting, the FOMC voted, as expected, to ease the benchmark federal funds rate by 25 basis points to 1.5-1.75%. 8 of the 10 officials voted in favor of lowering rates, with Boston Fed Pres Eric Rosengren & Kansas City Fed Pres Esther George dissenting from the decision. This was the 3rd cut this year, part of a "mid-cycle adjustment" that began in Jul in order to preserve the 11-year economic expansion. Although the central bank did not fully close the door to further action, it hinted that it will wait & see before lowering the benchmark federal funds rate again. "We believe monetary policy is in a good place," Chair Jerome Powell said. The Fed replaced a key phrase that had appeared in its policy statement all summer saying it was committed to "act as appropriate" to sustain the economic expansion. In its place was slightly more hawkish language. "The committee will continue to monitor the implications of upcoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate," the statement said. Powell said policymakers believe the current stance of policy will remain appropriate, so long as the economic outlook, including the strong labor market & solid consumer spending, stay the same. He pointed to mitigated risks, like the US & China inching closer toward signing phase one of a trade deal and the reduced risk of a hard Brexit. "That has the potential for being an improvement in the risk picture," he said. However, Powell stressed that if developments emerged that cause a material reassessment of the bank's outlook, "we would respond accordingly." "Policy is not on a preset course," he added. The Fed said the economy is growing at a "moderate" pace boosted by a strong labor market, but business investments are weak & "uncertainties" about the outlook remain. It expects growth to cool slightly this year & next to around 2%. The decision comes the same day the government reported Q3 GDP growth of 1.9%; though slower than previous qtrs, it topped the annualized 1.6% forecast. For consumers, lower interest rates — which affect borrowing costs, including auto loan rates & 30-year-fixed mortgage rates — can mean thousands of $s in savings.
Fed cuts interest rates for third time, but hits pause on future action
Demand for mortgages increased in the past week even as mortgage rates rose to the highest in 3 months. Mortgage applications rose 0.6% in the past week, according to the Mortgage Bankers Association's Weekly Mortgage Application Survey. Mortgage rates increased for the 2nd straight week with the 30-year fixed rate climbing to 4.05%, the highest level since the end of Jul. The seasonally adjusted purchase index rose 2% from last week, the highest level since the end of Jul. The refinancing index decreased 1% from the previous week & was 134% higher than the same week a year ago. The refinance share of mortgage activity accounted for 58% of total applications, slipping from 58.5% in the prior week.
Applications for new mortgages rose despite higher mortgages rates
Treasury Secretary Steve Mnuchin said that it will take time for Chinese purchases of US agricultural goods to “scale up” to the $40-50B annual level touted by Pres Trump if the 2 sides can seal a “Phase 1″ trade deal. Mnuchin added in Saudi Arabia that the $40-50B target is “a lot,” but is based on “very specific discussions” of product purchase commitments by China. “This is built on a bottom-up basis of both what we think we can deliver and what they think they need,” Mnuchin said. “It’s a one-year target, but obviously it’s going to take some time to scale up.”
Mnuchin says agricultural sales to China will ‘take time to scale up’ to $40-50 billion
Gold futures settled higher, after posting back-to-back declines, then headed lower after the Federal Reserve cut its benchmark interest rate but said it would monitor the economic outlook as it assesses its next decision on rates. The Federal Reserve cut its benchmark interest rate, by a qtr percentage point to 1.5-1.75%. The central bank signaled it may pause to see whether these easing steps are enough to sustain the economic expansion. In electronic trading shortly after the Fed news, gold for Dec traded at $1490 an ounce. Before the decision, prices for the contract had climbed $6 (0.4%) to settle at $1496 an ounce. The yellow metal had briefly trimmed some of earlier gains after data showed Q3 GDP expanded at a 1.9% annual pace, slowing from 2% in Q2 but coming in above the average forecast by economists for growth of 1.6%. The GDP data had reinforced expectations the Fed will seek to cool expectations for additional rate cuts. Traders have already scaled back bets for further interest-rate reductions later this year & in 2020. Fed monetary policy easing is seen as a positive for gold for a variety of reasons, including downward pressure on bond yields, which reduces the opportunity cost of holding non-yielding assets like commodities . Lower interest rates can also put pressure on the $, making gold & other commodities priced in the product less expensive to users of other currencies.
Gold settles higher after back-to-back declines, then falls after Fed decision
Oil futures ended at their lowest in just over a week after the Energy Information Administration (EIA) reported a larger-than-expected weekly US crude-supply increase of almost 6M barrels, but gasoline inventories declined a bit more than forecast. West Texas Intermediate crude for Dec fell 48¢ (0.9%) to settle at $55.06 a barrel. Front-month Dec Brent crude, which expires tomorrow, fell 98¢ (1.6%) to $60.61 a barrel. Both crude benchmarks marked their lowest settlements since Oct 22. The EIA reported that US crude supplies rose by 5.7M barrels last week. Crude supplies were forecast to increase by 2.5M barrels. The American Petroleum Institute released its data to media today, revealing a weekly fall of 708K barrels in crude inventories. The market saw conflicting API data from secondary sources yesterday, when the API issued its figures to its members.
Oil prices end at 1-week low as EIA shows nearly 6 million-barrel weekly rise in U.S. supplies
The news from the Fed was not surprising. There was one more rate cut & future events will define if it's necessary for more cuts. However, the big news is the cancellation of the intl meeting in Chile which raises doubts about signing phase 1 of the trade deal with China. The negotiators are undoubtedly looking for alternatives so the deal can move forward. The Dow shot up 100 after the rate cut news, coming closer to setting a new record.
Dow Jones Industrials
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