Dow soared 371 (near the highs), advancers over decliners better than 2-1 & NAZ shot up 110. The MLP index stayed near 230 & the REIT index added 1 to the 408s. Junk bond fund hardly budged & Treasuries were purchased again. Oil rose in the 62s after a tough week & gold fell 3 to 1510 (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)
Federal Reserve Chair Jerome Powell described the US economy as being solid, noting the central bank must do what it can to keep it there. “While not everyone fully shares economic opportunities and the economy faces some risks, overall it is— as I like to say— in a good place,” Powell said. The event is part of a monetary policy communication review by the Fed. “Our job is to keep it there as long as possible.” Powell's comments came after a raft of disappointing data releases this week. On Tues, the Institute for Supply Management said US. manufacturing contracted to its weakest level in a decade. ISM also said Thurs the US services sector grew at its slowest pace since Aug 2016. The Labor Dept, meanwhile, reported weaker-than-expected jobs growth for Sep. This batch of weaker-than-forecast economic numbers led traders to ratchet up their bets on easier monetary policy from the Fed. Market expectations for a rate cut later this month are around 80%,. “While we believe our strategy and tools have been and remain effective, the U.S. economy, like other advanced economies around the world, is facing some longer-term challenges—from low growth, low inflation, and low interest rates,” Powell said, adding the Fed is “examining strategies” that will help it achieve its inflation goal of 2%. The Fed has already cut rates twice this year, in part because inflation remains below the bank's target. Fed officials will meet again Oct 29 -30.
Boston Federal Reserve Pres Eric Rosengren believes the US economy is on track for GDP growth of just 1.7% in H2. Asked how much he thinks the economy will grow by year's end, the Fed official said his “overall view is it’s going to be around potential for the second half this year, so the third and fourth quarter. My estimate of potential is around 1.7%.” “I think that the data that we have is weaker than it was before, but it’s actually pretty consistent with getting around 1.7%,” he continued. “If we start getting much lower than that, then that implies a rising unemployment rate, and then we’d really want to think about what’s happening in the economy.” His comments came just days after the Atlanta Fed's forecasting tool indicated that the economy grew by just 1.8% in Q2, down from a prior estimate of 2.1% & below Q2's 2%. That downgrade came after the release of dismal US manufacturing data earlier this week, which sent the stock market tumbling. The Institute for Supply Management said US manufacturing activity contracted last month to its lowest level in more than 10 years. To help offset growing concerns about the pace of GDP growth heading into 2020, the Fed approved its second qtr-point interest rate cut last month. While Fed's decision-making committee as a whole has not pointed to further cuts, members are split on how to adjust interest rates. 3 Fed regional officials, including Rosengren each voted against the central bank's 25-basis-point cut at the time. Rosengren, has previously said he’d prefer to keep the funds rate steady while St Louis Fed Pres James Bullard advocated for a steeper cut.
Boston Fed President Rosengren sees just 1.7% growth for the second half
Gold prices finished lower, suffering their first loss in 4 sessions, after the US gov reported only modest growth in Sep US employment, but revealed that the nation's unemployment rate dropped to its lowest level in 50 years. The US unemployment rate dropped to 3.5%, the lowest rate since 1969. Against that backdrop, Dec gold fell 90¢ to settle at $1512 an ounce after posting 3 consecutive session gains. Most-active futures contract prices rose about 0.4% for the week.
Gold suffers first loss in 4 sessions as traders weigh ‘mixed bag’ U.S. jobs report
Hong Kong shut down all train service today as part of an emergency declaration aimed at stopping the massive protests that have flooded the streets for 4 straight months. The new emergency law will allow Hong Kong Chief Executive Carrie Lam to impose mainland-style curfews, censorship of media & messaging & tighter controls of ports & transportation. Besides the trains shutting down, no other moves have been announced. Within hours, masked protesters took to the streets to protest the law, which hadn't been invoked for 50 years, in a sign that Lam's move had spectacularly backfired. Last weekend, a Hong Kong police officer shot a teenager in the chest when protests turned violent in the streets. Protesters had avoided violence in the first months but the situation deteriorated after police allegedly used local triad gangsters to beat crowds in a train station with metal poles. The financial hub has seen a sharp decline in retail & tourism from the protests as Chinese from the mainland make up the vast majority of visitors. The Chinese Communist Party's office in charge of Hong Kong praised Lam's move, saying that the M or more protesters supported a regime change in the city.
Oil futures settled higher, with US benchmark crude breaking an 8-day string of losses, but still posted its biggest weekly loss since mid-Jul, after a run of weak economic data underlined concerns over global demand. West Texas Intermediate crude for Nov delivery rose 36¢ (0.7%) to settle at $52.81 a barrel, with the US benchmark logging a 5.5% weekly loss. That was the biggest weekly net & percentage loss since the week ended Jul 19. The global benchmark, Dec Brent crude rose 66¢ (1.1%) to $58.37 a barrel—for a 4.4% weekly decline. Over in the US, weekly data on active domestic oil rigs was supportive for prices. Baker Hughes reported that the number of active US rigs drilling for oil fell by 3 to 710 this week. That followed declines in each of the last 6 weeks. Attacks on Saudi oil production facilities on Sep 14 briefly provided a supply side shock before recent weak economic data revived fears about global oil demand.
After a rough start in Oct, stocks rebounded. The Dow is down only 350. However there is a lot going on for traders to digest, starting with restarting the China trade talks next week. Currently this month looks like it will be another wild one for stocks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Federal Reserve Chair Jerome Powell described the US economy as being solid, noting the central bank must do what it can to keep it there. “While not everyone fully shares economic opportunities and the economy faces some risks, overall it is— as I like to say— in a good place,” Powell said. The event is part of a monetary policy communication review by the Fed. “Our job is to keep it there as long as possible.” Powell's comments came after a raft of disappointing data releases this week. On Tues, the Institute for Supply Management said US. manufacturing contracted to its weakest level in a decade. ISM also said Thurs the US services sector grew at its slowest pace since Aug 2016. The Labor Dept, meanwhile, reported weaker-than-expected jobs growth for Sep. This batch of weaker-than-forecast economic numbers led traders to ratchet up their bets on easier monetary policy from the Fed. Market expectations for a rate cut later this month are around 80%,. “While we believe our strategy and tools have been and remain effective, the U.S. economy, like other advanced economies around the world, is facing some longer-term challenges—from low growth, low inflation, and low interest rates,” Powell said, adding the Fed is “examining strategies” that will help it achieve its inflation goal of 2%. The Fed has already cut rates twice this year, in part because inflation remains below the bank's target. Fed officials will meet again Oct 29 -30.
Powell says it’s the Fed’s job to keep the economy in a ‘good place’ for ‘as long as possible’
Boston Federal Reserve Pres Eric Rosengren believes the US economy is on track for GDP growth of just 1.7% in H2. Asked how much he thinks the economy will grow by year's end, the Fed official said his “overall view is it’s going to be around potential for the second half this year, so the third and fourth quarter. My estimate of potential is around 1.7%.” “I think that the data that we have is weaker than it was before, but it’s actually pretty consistent with getting around 1.7%,” he continued. “If we start getting much lower than that, then that implies a rising unemployment rate, and then we’d really want to think about what’s happening in the economy.” His comments came just days after the Atlanta Fed's forecasting tool indicated that the economy grew by just 1.8% in Q2, down from a prior estimate of 2.1% & below Q2's 2%. That downgrade came after the release of dismal US manufacturing data earlier this week, which sent the stock market tumbling. The Institute for Supply Management said US manufacturing activity contracted last month to its lowest level in more than 10 years. To help offset growing concerns about the pace of GDP growth heading into 2020, the Fed approved its second qtr-point interest rate cut last month. While Fed's decision-making committee as a whole has not pointed to further cuts, members are split on how to adjust interest rates. 3 Fed regional officials, including Rosengren each voted against the central bank's 25-basis-point cut at the time. Rosengren, has previously said he’d prefer to keep the funds rate steady while St Louis Fed Pres James Bullard advocated for a steeper cut.
Boston Fed President Rosengren sees just 1.7% growth for the second half
Gold prices finished lower, suffering their first loss in 4 sessions, after the US gov reported only modest growth in Sep US employment, but revealed that the nation's unemployment rate dropped to its lowest level in 50 years. The US unemployment rate dropped to 3.5%, the lowest rate since 1969. Against that backdrop, Dec gold fell 90¢ to settle at $1512 an ounce after posting 3 consecutive session gains. Most-active futures contract prices rose about 0.4% for the week.
Gold suffers first loss in 4 sessions as traders weigh ‘mixed bag’ U.S. jobs report
Hong Kong shut down all train service today as part of an emergency declaration aimed at stopping the massive protests that have flooded the streets for 4 straight months. The new emergency law will allow Hong Kong Chief Executive Carrie Lam to impose mainland-style curfews, censorship of media & messaging & tighter controls of ports & transportation. Besides the trains shutting down, no other moves have been announced. Within hours, masked protesters took to the streets to protest the law, which hadn't been invoked for 50 years, in a sign that Lam's move had spectacularly backfired. Last weekend, a Hong Kong police officer shot a teenager in the chest when protests turned violent in the streets. Protesters had avoided violence in the first months but the situation deteriorated after police allegedly used local triad gangsters to beat crowds in a train station with metal poles. The financial hub has seen a sharp decline in retail & tourism from the protests as Chinese from the mainland make up the vast majority of visitors. The Chinese Communist Party's office in charge of Hong Kong praised Lam's move, saying that the M or more protesters supported a regime change in the city.
Hong Kong shuts down trains in emergency declaration that enraged protesters
Oil futures settled higher, with US benchmark crude breaking an 8-day string of losses, but still posted its biggest weekly loss since mid-Jul, after a run of weak economic data underlined concerns over global demand. West Texas Intermediate crude for Nov delivery rose 36¢ (0.7%) to settle at $52.81 a barrel, with the US benchmark logging a 5.5% weekly loss. That was the biggest weekly net & percentage loss since the week ended Jul 19. The global benchmark, Dec Brent crude rose 66¢ (1.1%) to $58.37 a barrel—for a 4.4% weekly decline. Over in the US, weekly data on active domestic oil rigs was supportive for prices. Baker Hughes reported that the number of active US rigs drilling for oil fell by 3 to 710 this week. That followed declines in each of the last 6 weeks. Attacks on Saudi oil production facilities on Sep 14 briefly provided a supply side shock before recent weak economic data revived fears about global oil demand.
U.S. oil prices snap 8-day losing streak but fall over 5% for the week
After a rough start in Oct, stocks rebounded. The Dow is down only 350. However there is a lot going on for traders to digest, starting with restarting the China trade talks next week. Currently this month looks like it will be another wild one for stocks.
Dow Jones Industrials
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