Dow climbed 164, advancers over decliners 4-3 & NAZ gained 57. The MLP index went up 1 to a depressed 222 & the REIT index dropped 4+ to the 412s. Junk bond funds inched up & Treasuries drifted lower while stocks were purchased. Oil rose in the 56s & gold added 3 to 1508 (more 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 US & China are moving closer to a trade agreement following today's conference call between trade negotiators from the 2 countries, sending market indices higher. Trade Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin "made headway on specific issues" during a talk with China's Vice Premier Liu He about the initial phase of a trade agreement between the 2 countries, the Office of the Trade Representative said. “The two sides are close to finalizing some sections," Lighthizer's office added. "Discussions will go on continuously at the deputy level, and the principals will have another call in the near future.” On the call, China's trade negotiators were expected to ask the US not to impose 15% tariffs on Dec 15. It is unclear what, if anything, was agreed to. Earlier today, the trade representative's office approved more exclusion requests for China, including erythritol for keto dieters, & kerosene heaters & electric fireplaces as colder weather nears. The tentative US-China deal, which has not yet been signed, is said to include China making concessions on intellectual property, financial services & agriculture. In return, the US agreed not to implement new tariffs on Chinese goods on Oct 15. After today's call, White House trade advisor Peter Navarro said that the 2 sides "seem to be on the glide path" to a mid-Nov signing when Pres & Chinese Pres Xi Jinping are scheduled to attend the Asia-Pacific Economic Cooperation summit in Chile. Trump has said a comprehensive trade deal will have 2 or 3 phases.
EU ambassadors agreed that the bloc should grant Britain's request for another extension to the Brexit deadline but they have not yet figured out how long that delay should be. Speaking in Brussels after EU ambassadors met with the EU chief Brexit negotiator Michel Barnier, European Commission spokeswoman Mina Andreeva said ambassadors from the EU's 27 other nations accepted the terms of an extension & their "work will continue in the coming days." 2 European diplomats said the ambassadors would meet again early next week. Andreeva hinted that the EU would not hold a special summit on Brexit to approve the extension, saying the decision will likely be made in a statement. "We are not very far, and there is no doubt we will find a deal early next week," one diplomat said. The person, who asked not be identified, added that the ongoing debate in Britain over Prime Minister Boris Johnson's request for a general election could have an impact on the length of the delay. Britain is scheduled to leave the 28-nation bloc on Oct 31 but has asked for a 3-month extension to that deadline as Johnson struggles to get lawmakers to pass his Brexit divorce deal. Economists say a no-deal departure would hurt both the UK & the EU economies. France, among other EU nations, has been reluctant to approve a long Brexit extension, saying Britain must present "a clear scenario" for progress before another Brexit delay is granted. "Our position is that simply giving more time, without political change, without ratification, without an election, would be useless," Amelie de Montchalin, France's European affairs minister, said.
The Treasury said that the federal deficit for fiscal 2019 was $984B, a 26% increase from 2018 but still short of the $1T mark previously forecast by the administration. The gap between revenues & spending was the widest it’s been in 7 years as expenditures on defense, Medicare & interest payments on the national debt ballooned the shortfall. The gov said corp tax revenues totaled $230B, up 12%, thanks to a rebound in H2 of the year. Individual tax revenues rose 2% to $1.7T. Receipts totaled $3.4T, up 4% thru Sep, while federal spending rose 8%, to $4.4T. The gov also collected nearly $71B in customs duties, or tariffs, a 70% increase compared to the year-ago period. As a percentage of US economic output the deficit was 4.6%, 0.8 percentage points higher than the previous year. “President Trump’s economic agenda is working: the Nation is experiencing the lowest unemployment rate in nearly 50 years, there are more jobs to fill than there are job seekers, and Americans are experiencing sustained year-over-year wage increases,” said Treasury Secretary Steve Mnuchin. “In order to truly put America on a sustainable financial path, we must enact proposals—like the President’s 2020 budget plan—to cut wasteful and irresponsible spending,” he added. Annual deficits have nearly doubled under Pres Trump's tenure notwithstanding an unemployment rate at multidecade lows & better earnings figures. Deficits usually shrink during times of economic growth as higher incomes and investment profits buoy Treasury coffers, while automatic spending on items like food stamps decline. 2 big bipartisan spending bills, combined with the administration's landmark tax cuts, however, have defied the typical trends & instead aggravated deficits. The Congressional Budget Office projects the T$ deficit could come as soon as fiscal 2020 (next year). Still, the Treasury's report will likely come as a relief to the Trump administration, which had previously forecast that the deficit would hit $1T during the 2019 fiscal year. The White House pushed through a $1.5T tax cut nearly 2 years ago that Pres Trump vowed would pay for itself.
Gold futures gave up most of their gains for the day by settlement, but held ground above the key $1500 price to score a 2nd weekly climb in a row. Downbeat economic data, with a reading on US consumer sentiment revised down to 95.5 in Oct from an initial 96, along with expectations for more easing from global central banks that could add further support for bullion, provided support for gold. However, news today that the US & China have made progress in trade talks & are close to finalizing parts of a phase one deal dulled some of that haven demand for the yellow metal. Dec gold rose 60¢ to settle at $1505 an ounce after trading as high as $1520 during the session. The most-active contract marked its highest finish since Oct 9. For the week, the yellow metal rose about 0.8%, marking a 2nd straight weekly rise. Investors await the Federal Reserve's policy decision at a 2-day gathering on Oct 29-30, with traders expecting the central bank to deliver its 3rd qtr percentage point interest cut of the year. However, it isn't clear if the Fed will conform to high market hopes & ease policy further. Uncertainty surrounding Brexit has added some support for precious metals. UK Prime Minister Boris Johnson said he would seek a general election in Dec 12 to break a Brexit deadlock, but it is uncertain if he can win Parliament's support for the vote, which could raise the chances of a disorderly exit from Europe's trade bloc.
As negotiators work to flesh out the “Phase One” trade deal Pres Trump & China's Pres Xi Jinping are expected to sign next month, trade hawk Peter Navarro has been fighting the deal behind the scenes, according to leakers. Navarro has taken particular issue with the shelving of certain protections for intellectual property & technology that appeared in earlier versions of the deal. Navarro has urged Trump to force China to recommit to previous promises on IP protection or walk away from a deal. So far, Navarro's effort has been unsuccessful. Today, Trade Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin continued talks in a principal-level call with Chinese vice premier Liu He. “They made headway on specific issues and the two sides are close to finalizing some sections of the agreement,” according to the USTR. “Discussions will go on continuously at the deputy level, and the principals will have another call in the near future.” The deal in the works would see China increase its purchases of agricultural goods over a period of 2 years, remove barriers for financial services companies, & commit to greater transparency in its currency market. In return, the US refrained from increasing tariffs on Oct 15 & may cancel a forthcoming round of tariffs in Dec. “They’d like to see some tariffs that are scheduled to go on very soon, they’d like to see them not go on,” Trump said today of Beijing’s agenda in the talks. As announced, the deal would not outlaw China’s subsidizing state-owned enterprises. It would not open China's economy to all sectors & industries, as the Trump administration had been pushing. And it would not require China to codify the deal into the law - a focal point in talks that became a dealbreaker for Xi in May. Just days before Pres Trump announced the Phase One deal, Navarro suggested today that such a partial deal was not a possibility. “President Trump has steely resolve. It’s either a big deal or no deal. That’s been his posture from day one,” Navarro said. When asked for comment about his opposition to the Phase One deal, Navarro said via e-mail: “This is just more hearsay fake news from anonymous fake sources intent on disrupting the negotiations. There are no people ‘close to the talks’ within any real information -- Ambassador Lighthizer runs the tightest ship in the D.C. Swamp and his folks aren’t talking to the outside.”
Trump advisor Peter Navarro fighting ‘Phase One’ of China trade deal, sources say
Traders are feeling good about a US-China deal being signed, preferably next month. Trade optimism brought out buyers early in the day with only modest selling in the PM. The volatility index (VIX) is in the 12s, indicating investors are willing to accept risk when purchasing stocks. Major stock indices are near record highs & might reach that goal next week if the Fed helps with a rate cut & the the GDP growth rate for Q3 is encouraging.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The US & China are moving closer to a trade agreement following today's conference call between trade negotiators from the 2 countries, sending market indices higher. Trade Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin "made headway on specific issues" during a talk with China's Vice Premier Liu He about the initial phase of a trade agreement between the 2 countries, the Office of the Trade Representative said. “The two sides are close to finalizing some sections," Lighthizer's office added. "Discussions will go on continuously at the deputy level, and the principals will have another call in the near future.” On the call, China's trade negotiators were expected to ask the US not to impose 15% tariffs on Dec 15. It is unclear what, if anything, was agreed to. Earlier today, the trade representative's office approved more exclusion requests for China, including erythritol for keto dieters, & kerosene heaters & electric fireplaces as colder weather nears. The tentative US-China deal, which has not yet been signed, is said to include China making concessions on intellectual property, financial services & agriculture. In return, the US agreed not to implement new tariffs on Chinese goods on Oct 15. After today's call, White House trade advisor Peter Navarro said that the 2 sides "seem to be on the glide path" to a mid-Nov signing when Pres & Chinese Pres Xi Jinping are scheduled to attend the Asia-Pacific Economic Cooperation summit in Chile. Trump has said a comprehensive trade deal will have 2 or 3 phases.
US-China trade war negotiations make headway
EU ambassadors agreed that the bloc should grant Britain's request for another extension to the Brexit deadline but they have not yet figured out how long that delay should be. Speaking in Brussels after EU ambassadors met with the EU chief Brexit negotiator Michel Barnier, European Commission spokeswoman Mina Andreeva said ambassadors from the EU's 27 other nations accepted the terms of an extension & their "work will continue in the coming days." 2 European diplomats said the ambassadors would meet again early next week. Andreeva hinted that the EU would not hold a special summit on Brexit to approve the extension, saying the decision will likely be made in a statement. "We are not very far, and there is no doubt we will find a deal early next week," one diplomat said. The person, who asked not be identified, added that the ongoing debate in Britain over Prime Minister Boris Johnson's request for a general election could have an impact on the length of the delay. Britain is scheduled to leave the 28-nation bloc on Oct 31 but has asked for a 3-month extension to that deadline as Johnson struggles to get lawmakers to pass his Brexit divorce deal. Economists say a no-deal departure would hurt both the UK & the EU economies. France, among other EU nations, has been reluctant to approve a long Brexit extension, saying Britain must present "a clear scenario" for progress before another Brexit delay is granted. "Our position is that simply giving more time, without political change, without ratification, without an election, would be useless," Amelie de Montchalin, France's European affairs minister, said.
EU envoys agree that Brexit extension is needed, no date set
The Treasury said that the federal deficit for fiscal 2019 was $984B, a 26% increase from 2018 but still short of the $1T mark previously forecast by the administration. The gap between revenues & spending was the widest it’s been in 7 years as expenditures on defense, Medicare & interest payments on the national debt ballooned the shortfall. The gov said corp tax revenues totaled $230B, up 12%, thanks to a rebound in H2 of the year. Individual tax revenues rose 2% to $1.7T. Receipts totaled $3.4T, up 4% thru Sep, while federal spending rose 8%, to $4.4T. The gov also collected nearly $71B in customs duties, or tariffs, a 70% increase compared to the year-ago period. As a percentage of US economic output the deficit was 4.6%, 0.8 percentage points higher than the previous year. “President Trump’s economic agenda is working: the Nation is experiencing the lowest unemployment rate in nearly 50 years, there are more jobs to fill than there are job seekers, and Americans are experiencing sustained year-over-year wage increases,” said Treasury Secretary Steve Mnuchin. “In order to truly put America on a sustainable financial path, we must enact proposals—like the President’s 2020 budget plan—to cut wasteful and irresponsible spending,” he added. Annual deficits have nearly doubled under Pres Trump's tenure notwithstanding an unemployment rate at multidecade lows & better earnings figures. Deficits usually shrink during times of economic growth as higher incomes and investment profits buoy Treasury coffers, while automatic spending on items like food stamps decline. 2 big bipartisan spending bills, combined with the administration's landmark tax cuts, however, have defied the typical trends & instead aggravated deficits. The Congressional Budget Office projects the T$ deficit could come as soon as fiscal 2020 (next year). Still, the Treasury's report will likely come as a relief to the Trump administration, which had previously forecast that the deficit would hit $1T during the 2019 fiscal year. The White House pushed through a $1.5T tax cut nearly 2 years ago that Pres Trump vowed would pay for itself.
Federal deficit increases 26% to $984 billion for fiscal 2019, highest in 7 years
Gold futures gave up most of their gains for the day by settlement, but held ground above the key $1500 price to score a 2nd weekly climb in a row. Downbeat economic data, with a reading on US consumer sentiment revised down to 95.5 in Oct from an initial 96, along with expectations for more easing from global central banks that could add further support for bullion, provided support for gold. However, news today that the US & China have made progress in trade talks & are close to finalizing parts of a phase one deal dulled some of that haven demand for the yellow metal. Dec gold rose 60¢ to settle at $1505 an ounce after trading as high as $1520 during the session. The most-active contract marked its highest finish since Oct 9. For the week, the yellow metal rose about 0.8%, marking a 2nd straight weekly rise. Investors await the Federal Reserve's policy decision at a 2-day gathering on Oct 29-30, with traders expecting the central bank to deliver its 3rd qtr percentage point interest cut of the year. However, it isn't clear if the Fed will conform to high market hopes & ease policy further. Uncertainty surrounding Brexit has added some support for precious metals. UK Prime Minister Boris Johnson said he would seek a general election in Dec 12 to break a Brexit deadlock, but it is uncertain if he can win Parliament's support for the vote, which could raise the chances of a disorderly exit from Europe's trade bloc.
Gold prices end slightly higher, second weekly climb in a row
As negotiators work to flesh out the “Phase One” trade deal Pres Trump & China's Pres Xi Jinping are expected to sign next month, trade hawk Peter Navarro has been fighting the deal behind the scenes, according to leakers. Navarro has taken particular issue with the shelving of certain protections for intellectual property & technology that appeared in earlier versions of the deal. Navarro has urged Trump to force China to recommit to previous promises on IP protection or walk away from a deal. So far, Navarro's effort has been unsuccessful. Today, Trade Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin continued talks in a principal-level call with Chinese vice premier Liu He. “They made headway on specific issues and the two sides are close to finalizing some sections of the agreement,” according to the USTR. “Discussions will go on continuously at the deputy level, and the principals will have another call in the near future.” The deal in the works would see China increase its purchases of agricultural goods over a period of 2 years, remove barriers for financial services companies, & commit to greater transparency in its currency market. In return, the US refrained from increasing tariffs on Oct 15 & may cancel a forthcoming round of tariffs in Dec. “They’d like to see some tariffs that are scheduled to go on very soon, they’d like to see them not go on,” Trump said today of Beijing’s agenda in the talks. As announced, the deal would not outlaw China’s subsidizing state-owned enterprises. It would not open China's economy to all sectors & industries, as the Trump administration had been pushing. And it would not require China to codify the deal into the law - a focal point in talks that became a dealbreaker for Xi in May. Just days before Pres Trump announced the Phase One deal, Navarro suggested today that such a partial deal was not a possibility. “President Trump has steely resolve. It’s either a big deal or no deal. That’s been his posture from day one,” Navarro said. When asked for comment about his opposition to the Phase One deal, Navarro said via e-mail: “This is just more hearsay fake news from anonymous fake sources intent on disrupting the negotiations. There are no people ‘close to the talks’ within any real information -- Ambassador Lighthizer runs the tightest ship in the D.C. Swamp and his folks aren’t talking to the outside.”
Trump advisor Peter Navarro fighting ‘Phase One’ of China trade deal, sources say
Traders are feeling good about a US-China deal being signed, preferably next month. Trade optimism brought out buyers early in the day with only modest selling in the PM. The volatility index (VIX) is in the 12s, indicating investors are willing to accept risk when purchasing stocks. Major stock indices are near record highs & might reach that goal next week if the Fed helps with a rate cut & the the GDP growth rate for Q3 is encouraging.
Dow Jones Industrials
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