Dow soared 237, advancers over decliners about 2-1& NAZ went up 100. The MLP index added 1 to the 222s & the REIT index was flattish in the 408s. Junk bond funds inched higher & Treasuries were sold in the PM. Oil dropped to the 52s & gold sank 13 to 1484 (lowest price this month).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
St Louis Federal Reserve Bank Pres James Bullard said risks remain high for a US economy that may slow more sharply than expected. The Fed will make decisions on a meeting-by-meeting basis, according to Bullard. He said that the yield curve has a good track record as far as recession is concerned. According to models, Bullard said the chance of a recession is elevated. He also commented on trade saying "the shift in policy is a significant change for the global landscape." Bullard also doesn't expect major changes to come from the current Fed policy review. In case of what Bullard called an "ordinary recession" the Fed's playbook includes measures like rates going to zero & quantitative easing. Bullard was in favor of a deeper interest rate cut at the last policy meeting. The Fed reduced interest rates by a qtr of a percentage point at its Sep gathering.
The US-China trade war will slash 2019 global growth to the slowest rate since the financial crisis a decade ago, the IMF warned. The organization said its latest World Economic Outlook forecast 2019 GDP growth at 3%, down from 3.3% in its Apr outlook. The report painted a dreary outlook of the economy, weighed down by hundreds of Bs of $s in tariffs, which have taken a toll on investment and productivity, in addition to causing extreme market volatility. "With uncertainty about prospects for several of these countries, a projected slowdown in China and the United States, and prominent downside risks, a much more subdued pace of global activity could well materialize," the report said. "To forestall such an outcome, policies should decisively aim at defusing trade tensions." Although growth is projected to moderate next year, & to expand in 2021 thru 2024, the IMF cautioned that if the world's 2 largest economies are unable to strike a trade deal, global growth will continue to deteriorate. By 2020, trade tensions between the US & China, now in their 15th month, are expected to reduce the global GDP by 0.8%. Pres Trump & his Chinese counterpart Xi Jinping could sign a partial deal as soon as next month. Under that deal, China agreed to raise its agricultural purchases to $40-50B from $8-16B & to make certain reforms on intellectual property & financial services. It's still unclear whether Trump plans to halt another round of tariffs that are set to take effect on Dec.15.
General Motors (GM) & the United Auto Workers are “in the home stretch” to reaching a tentative labor contract that could bring to a close the union's 30-day strike that has cost the automaker an estimated $2B, according to a leaker. The company’s top execs, including CEO Mary Barra & Pres Mark Reuss, sat in on the discussions today to help hammer out some of the final details. The UAW summoned local union leaders to Detroit earlier this week for a meeting Thurs to review its progress in the negotiations. There is a report that a tentative agreement could be announced as soon as tomorrow. This is the 2nd time Barra has met with the union in the past week, however the previous meeting on Oct.9 was separate from the main negotiating table. The union has traditionally flown local union leaders in when a tentative agreement has been reached or, as was the case a month ago, to discuss & vote on other actions such as a strike. A letter to local union leaders last night said the agenda for the Thurs meeting included a “contract update and any other agenda items to be determined,” leaving the door open for negotiators to reach a tentative agreement ahead of the meeting. The UAW declined to comment on the letter. GM spokesman David Barnas confirmed talks are “ongoing,” but declined to comment on details of the discussions. If a tentative agreement is not reached by the meeting at 10:30AM ET tomorrow, the union could update local leaders about the discussions in an attempt to determine what to do next. GM stock gained 75¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM labor talks with UAW could be ‘in the home stretch’ as CEO Mary Barra joins negotiations
Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, reported Q3 earnings & revenue that beat expectations, boosted by higher sales of cancer & other prescription drugs, despite multimillion-$ legal problems from talc & opioids. Adjusted EPS was $2.12 versus $2.01 expected on revenue of $20.73B versus $20.07B expected. JNJ also raised its full-year guidance & now sees EPS of $8.62-8.67, with revenue of $81.8-82.3B. Prior to the report, analysts were expecting full-year EPS of $8.53-8.63 on revenue of $82.4-83.2B. JNJ is facing thousands of lawsuits ranging from claims that its talc-based baby powder causes cancer to allegations that it helped fuel that nationwide opioid epidemic. JNJ in Aug was ordered by a judge to pay $572B in the first ruling in the US holding a drugmaker accountable for the epidemic. And last week, a Philadelphia jury ordered JNJ to pay $8B in punitive damages for downplaying risks that its antipsychotic drug Risperdal could promote breast growth in boys. CFO Joseph Wolk said that the company is open to “a reasonable” settlement that would settle the hundreds of opioid lawsuits from state & local municipalities, adding its painkillers represented less than 1% of the overall market. The company did not report its litigation expenses for Q3. The pharmaceutical business, which accounts for ½ of revenue, posted revenue of $10.88B, better than the $10.4B projection. The consumer unit reported revenue of $3.46B, in line with expectations. The medical device unit reported revenue of $6.3B, slightly better than $6.27B expected. “Our third-quarter results represent strong performance, driven by competitive underlying growth in Pharmaceuticals and Medical Devices, as well as continued optimization in our Consumer business,” CEO Alex Gorsky said. The stock rose 2.12.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
Johnson & Johnson earnings beat expectations despite legal challenges from opioids
The bulls were happy with early reports on earnings & the prospect of a settlement for the GM strike. There was no significant negative news on the trade front, so the Dow was able to pretty much retain its early gains all day. The Dow needs 300+ to reach a record high & the bulls hope to take it there soon.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
St Louis Federal Reserve Bank Pres James Bullard said risks remain high for a US economy that may slow more sharply than expected. The Fed will make decisions on a meeting-by-meeting basis, according to Bullard. He said that the yield curve has a good track record as far as recession is concerned. According to models, Bullard said the chance of a recession is elevated. He also commented on trade saying "the shift in policy is a significant change for the global landscape." Bullard also doesn't expect major changes to come from the current Fed policy review. In case of what Bullard called an "ordinary recession" the Fed's playbook includes measures like rates going to zero & quantitative easing. Bullard was in favor of a deeper interest rate cut at the last policy meeting. The Fed reduced interest rates by a qtr of a percentage point at its Sep gathering.
Fed's Bullard warns of a coming recession and explains how he'd handle it
The US-China trade war will slash 2019 global growth to the slowest rate since the financial crisis a decade ago, the IMF warned. The organization said its latest World Economic Outlook forecast 2019 GDP growth at 3%, down from 3.3% in its Apr outlook. The report painted a dreary outlook of the economy, weighed down by hundreds of Bs of $s in tariffs, which have taken a toll on investment and productivity, in addition to causing extreme market volatility. "With uncertainty about prospects for several of these countries, a projected slowdown in China and the United States, and prominent downside risks, a much more subdued pace of global activity could well materialize," the report said. "To forestall such an outcome, policies should decisively aim at defusing trade tensions." Although growth is projected to moderate next year, & to expand in 2021 thru 2024, the IMF cautioned that if the world's 2 largest economies are unable to strike a trade deal, global growth will continue to deteriorate. By 2020, trade tensions between the US & China, now in their 15th month, are expected to reduce the global GDP by 0.8%. Pres Trump & his Chinese counterpart Xi Jinping could sign a partial deal as soon as next month. Under that deal, China agreed to raise its agricultural purchases to $40-50B from $8-16B & to make certain reforms on intellectual property & financial services. It's still unclear whether Trump plans to halt another round of tariffs that are set to take effect on Dec.15.
Trade war flashes an ominous warning sign in global economy, IMF says
General Motors (GM) & the United Auto Workers are “in the home stretch” to reaching a tentative labor contract that could bring to a close the union's 30-day strike that has cost the automaker an estimated $2B, according to a leaker. The company’s top execs, including CEO Mary Barra & Pres Mark Reuss, sat in on the discussions today to help hammer out some of the final details. The UAW summoned local union leaders to Detroit earlier this week for a meeting Thurs to review its progress in the negotiations. There is a report that a tentative agreement could be announced as soon as tomorrow. This is the 2nd time Barra has met with the union in the past week, however the previous meeting on Oct.9 was separate from the main negotiating table. The union has traditionally flown local union leaders in when a tentative agreement has been reached or, as was the case a month ago, to discuss & vote on other actions such as a strike. A letter to local union leaders last night said the agenda for the Thurs meeting included a “contract update and any other agenda items to be determined,” leaving the door open for negotiators to reach a tentative agreement ahead of the meeting. The UAW declined to comment on the letter. GM spokesman David Barnas confirmed talks are “ongoing,” but declined to comment on details of the discussions. If a tentative agreement is not reached by the meeting at 10:30AM ET tomorrow, the union could update local leaders about the discussions in an attempt to determine what to do next. GM stock gained 75¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM labor talks with UAW could be ‘in the home stretch’ as CEO Mary Barra joins negotiations
Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, reported Q3 earnings & revenue that beat expectations, boosted by higher sales of cancer & other prescription drugs, despite multimillion-$ legal problems from talc & opioids. Adjusted EPS was $2.12 versus $2.01 expected on revenue of $20.73B versus $20.07B expected. JNJ also raised its full-year guidance & now sees EPS of $8.62-8.67, with revenue of $81.8-82.3B. Prior to the report, analysts were expecting full-year EPS of $8.53-8.63 on revenue of $82.4-83.2B. JNJ is facing thousands of lawsuits ranging from claims that its talc-based baby powder causes cancer to allegations that it helped fuel that nationwide opioid epidemic. JNJ in Aug was ordered by a judge to pay $572B in the first ruling in the US holding a drugmaker accountable for the epidemic. And last week, a Philadelphia jury ordered JNJ to pay $8B in punitive damages for downplaying risks that its antipsychotic drug Risperdal could promote breast growth in boys. CFO Joseph Wolk said that the company is open to “a reasonable” settlement that would settle the hundreds of opioid lawsuits from state & local municipalities, adding its painkillers represented less than 1% of the overall market. The company did not report its litigation expenses for Q3. The pharmaceutical business, which accounts for ½ of revenue, posted revenue of $10.88B, better than the $10.4B projection. The consumer unit reported revenue of $3.46B, in line with expectations. The medical device unit reported revenue of $6.3B, slightly better than $6.27B expected. “Our third-quarter results represent strong performance, driven by competitive underlying growth in Pharmaceuticals and Medical Devices, as well as continued optimization in our Consumer business,” CEO Alex Gorsky said. The stock rose 2.12.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
Johnson & Johnson earnings beat expectations despite legal challenges from opioids
The bulls were happy with early reports on earnings & the prospect of a settlement for the GM strike. There was no significant negative news on the trade front, so the Dow was able to pretty much retain its early gains all day. The Dow needs 300+ to reach a record high & the bulls hope to take it there soon.
Dow Jones Industrials
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