Dow sank 255 (at session lows), decliners barely ahead of advancers & NAZ gave back 67. The MLP index rose 1+ to the 222s & the REIT index rose 3+ to the 414s (a new record). Junk bond funds were hit with a little selling & Treasuries remained slightly higher today. Oil slid lower in the 53s (more below) & gold was off 3 to 1494.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
White House trade adviser Peter Navarro said a “phase one” trade deal with China can happen during next month's Asia-Pacific Economic Cooperation (APEC) forum in Chile. “We are on the guiding path to Chile and the meeting of the two presidents in mid-November,” he added. “The plan there, is to have an agreement.” Trump told reporters at the White House on Wed that the partial trade deal announced last week was “being papered.” Trump, Chinese Pres Xi Jinping & other world leaders are expected to take part in the APEC Forum that will be held in Santiago, Chile from Nov 11-17.
Federal Reserve policymakers don't have their minds made up about where interest rate policy is headed & will weigh conditions as they unfold, central bank Vice Chair Richard Clarida said. With the Fed less than 2 weeks away from a meeting at which markets expect another rate cut, Clarida said decisions will be made based on risks to an economy is on solid ground. “Looking ahead, monetary policy is not on a preset course, and the Committee will proceed on a meeting-by-meeting basis to assess the economic outlook as well as the risks to the outlook, and it will act as appropriate to sustain growth, a strong labor market, and a return of inflation to our symmetric 2 percent objective,” he added. The policymaking FOMC has approved 2 reductions this year, bringing its benchmark overnight lending rate to a target range of 1.75-2%. Market pricing indicates an 89% chance of another move at the Oct 29-30 FOMC meeting. However, Fed officials have been trying to dissuade markets from assuming the committee is intent on longer-run pattern of policy easing. Following the Jul rate cut, Fed Chair Jerome Powell characterized the move as a “midcycle adjustment.” Minutes from the Sep meeting indicated that some members felt the market was anticipating a “greater provision of accommodation” than the committee intends. Clarida noted that while the Fed is intent on keeping growth going, he views current conditions as being positive. “The U.S. economy is in a good place, and the baseline outlook is favorable,” he said, while noting that the US “economy confronts some evident risks in this the 11th year of economic expansion” such as a slowdown in business investment, exports & manufacturing. “Global growth estimates continue to be marked down, and global disinflationary pressures cloud the outlook for U.S. inflation,” he added. Committee members at the Sep meeting indicated they see no additional rate cuts this year or in 2020, to be followed by a rate hike in each of the next 2 years. Markets strongly disagree, with current pricing indicating a long-run funds rate around 1.24%, ½ the FOMC's projection of 2.5%.
Clarida reiterates that the Fed is not locked into a set interest rate path
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
FAA says Boeing withheld ‘concerning’ pilot messages about the safety of 737 Max
Robert Kaplan, pres of the Federal Reserve Bank of Dallas, said he was hopeful that the central bank's current sequence of rate cuts would be “modest, limited and restrained,” but it was too soon to say whether that would be the case. “The jury’s out on that,” he said during a moderated question-&-answer session in DC.
Oil futures finished lower, giving up earlier gains to build a loss for the week, as data showing slower Chinese economic growth fed worries about weaker demand for oil & a recent report revealed a 5th consecutive weekly rise in US crude inventories. However, support tied to progress toward deals on US-China trade & Brexit, as well as a weekly fall in US petroleum-product inventories limited losses for prices. China’s National Bureau of Statistics released data showing slower-than-expected growth by China's economy. GDP expanded at a 6% pace in Q3, the slowest in 27 years. West Texas Intermediate crude for Nov delivery fell by 15¢ to settle at $53.78 a barrel, prompting the US benchmark to post a 1.7% weekly decline. The global benchmark, as measured by Dec Brent crude, lost 49¢ (0.8%) at $59.42 a barrel, off 1.8% for the week. Prices posted gains yesterday despite the Energy Information Administration reporting a larger-than-expected rise in crude stocks last week of 9.3M barrels, though a fall in refinery activity led to a strong draw on gasoline & distillate inventories, which fell 2.6M barrels & 3.8M barrels, respectively. Separately, data from Baker Hughes showed that the number of active US rigs drilling for oil edged up for a 2nd week in a row. Prices got a boost late yesterday after news that the US & Turkey reached a case-fire pact in Syria, temporarily easing Middle East tensions. A tentative Brexit deal, meanwhile, fueled appetite for asset perceived as risky, though the deal must still be approved by the British parliament & other EU member states.
Selling today was less severe than the the indices indicate, although selling in the last hour brought averages to session lows. Most the Dow's decline was due to BA & Johnson & Johnson (JNJ), a Dividend Aristocrat, which had a baby powder recall, causing the stock to tumble 8. The Intl trade front continues to be unsettled, the Fed meeting & GDP data are coning prior to month's end. The rest of Oct may be an exciting time for investors who are already nervous.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
White House trade adviser Peter Navarro said a “phase one” trade deal with China can happen during next month's Asia-Pacific Economic Cooperation (APEC) forum in Chile. “We are on the guiding path to Chile and the meeting of the two presidents in mid-November,” he added. “The plan there, is to have an agreement.” Trump told reporters at the White House on Wed that the partial trade deal announced last week was “being papered.” Trump, Chinese Pres Xi Jinping & other world leaders are expected to take part in the APEC Forum that will be held in Santiago, Chile from Nov 11-17.
Navarro predicts how the US-China trade deal will go down
Federal Reserve policymakers don't have their minds made up about where interest rate policy is headed & will weigh conditions as they unfold, central bank Vice Chair Richard Clarida said. With the Fed less than 2 weeks away from a meeting at which markets expect another rate cut, Clarida said decisions will be made based on risks to an economy is on solid ground. “Looking ahead, monetary policy is not on a preset course, and the Committee will proceed on a meeting-by-meeting basis to assess the economic outlook as well as the risks to the outlook, and it will act as appropriate to sustain growth, a strong labor market, and a return of inflation to our symmetric 2 percent objective,” he added. The policymaking FOMC has approved 2 reductions this year, bringing its benchmark overnight lending rate to a target range of 1.75-2%. Market pricing indicates an 89% chance of another move at the Oct 29-30 FOMC meeting. However, Fed officials have been trying to dissuade markets from assuming the committee is intent on longer-run pattern of policy easing. Following the Jul rate cut, Fed Chair Jerome Powell characterized the move as a “midcycle adjustment.” Minutes from the Sep meeting indicated that some members felt the market was anticipating a “greater provision of accommodation” than the committee intends. Clarida noted that while the Fed is intent on keeping growth going, he views current conditions as being positive. “The U.S. economy is in a good place, and the baseline outlook is favorable,” he said, while noting that the US “economy confronts some evident risks in this the 11th year of economic expansion” such as a slowdown in business investment, exports & manufacturing. “Global growth estimates continue to be marked down, and global disinflationary pressures cloud the outlook for U.S. inflation,” he added. Committee members at the Sep meeting indicated they see no additional rate cuts this year or in 2020, to be followed by a rate hike in each of the next 2 years. Markets strongly disagree, with current pricing indicating a long-run funds rate around 1.24%, ½ the FOMC's projection of 2.5%.
Clarida reiterates that the Fed is not locked into a set interest rate path
The Federal Aviation Administration (FAA) said Boeing (BA), a Dow stock, withheld “concerning” messages from 2016 between employees about a
flight-control system implicated in 2 crashes of the 737 Max,
deepening the manufacturer's crisis over the jets that have been
grounded worldwide since Mar. A BA test pilot complained in
one of the messages that a flight control system, known as MCAS, was
difficult to control, according to the messages. That
system is at the heart of investigations into 2 fatal crashes & investigators have implicated the system in both crashes. “It’s
running rampant in the sim on me”, the pilot, Mark Forkner, BA's
former chief technical pilot, said in 2016 to a colleague, referring to
the simulator, according to the transcript. “Granted, I suck at flying,
but even this was egregious.” His colleague replied that they would have to update the description of the system. “So
I basically lied to regulators (unknowingly),” read Forkner's reply. That
system malfunctioned on both crashed flights, repeatedly pushing the
planes' noses down until their final, fatal dives. All 346 people on
both flights were killed. Pilots at airlines complained after the crashes that they did not know about the system, known as MCAS, until after the first crash. The messages add to pressure already piling up on BA & CEO Dennis Muilenburg. The company & the FAA are facing several investigations into the plane's design & software. The company's board removed Muilenburg as chairman last week, saying the division of the 2 roles will help him focus on
bringing the plane back to service. Muilenburg is set to testify in
front of Congress later this month for the first time since the crashes
in 2 hearings & added that BA discovered the messages “some months ago.” The FAA,
which first certified the planes in 2017, said it is “disappointed that
Boeing did not bring this document to our attention immediately upon its
discovery,” the agency said, adding that it is “reviewing this
information to determine what action is appropriate.” BA has developed a software fix for the software that misfired on the crashes but regulators haven't yet signed off. The stock plunged 24 (7%), accounting for much of the decline in the Dow today.
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FAA says Boeing withheld ‘concerning’ pilot messages about the safety of 737 Max
Robert Kaplan, pres of the Federal Reserve Bank of Dallas, said he was hopeful that the central bank's current sequence of rate cuts would be “modest, limited and restrained,” but it was too soon to say whether that would be the case. “The jury’s out on that,” he said during a moderated question-&-answer session in DC.
Fed’s Kaplan Says Jury Is Out on Whether Economy Will Need More Support
Oil futures finished lower, giving up earlier gains to build a loss for the week, as data showing slower Chinese economic growth fed worries about weaker demand for oil & a recent report revealed a 5th consecutive weekly rise in US crude inventories. However, support tied to progress toward deals on US-China trade & Brexit, as well as a weekly fall in US petroleum-product inventories limited losses for prices. China’s National Bureau of Statistics released data showing slower-than-expected growth by China's economy. GDP expanded at a 6% pace in Q3, the slowest in 27 years. West Texas Intermediate crude for Nov delivery fell by 15¢ to settle at $53.78 a barrel, prompting the US benchmark to post a 1.7% weekly decline. The global benchmark, as measured by Dec Brent crude, lost 49¢ (0.8%) at $59.42 a barrel, off 1.8% for the week. Prices posted gains yesterday despite the Energy Information Administration reporting a larger-than-expected rise in crude stocks last week of 9.3M barrels, though a fall in refinery activity led to a strong draw on gasoline & distillate inventories, which fell 2.6M barrels & 3.8M barrels, respectively. Separately, data from Baker Hughes showed that the number of active US rigs drilling for oil edged up for a 2nd week in a row. Prices got a boost late yesterday after news that the US & Turkey reached a case-fire pact in Syria, temporarily easing Middle East tensions. A tentative Brexit deal, meanwhile, fueled appetite for asset perceived as risky, though the deal must still be approved by the British parliament & other EU member states.
Oil retreats, contributing to a weekly loss as China data revive worries about demand
Selling today was less severe than the the indices indicate, although selling in the last hour brought averages to session lows. Most the Dow's decline was due to BA & Johnson & Johnson (JNJ), a Dividend Aristocrat, which had a baby powder recall, causing the stock to tumble 8. The Intl trade front continues to be unsettled, the Fed meeting & GDP data are coning prior to month's end. The rest of Oct may be an exciting time for investors who are already nervous.
Dow Jones Industrials
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