Dow gained 23, advancers over decliners 2-1 & NAZ rose 32. The MLP index gave back 1 to 221 & the REIT index added 2+ to 411. Junk bond funds inched higher & Treasuries slid lower in price. Oil rose to 54 & gold was steady at1494.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
China says it's fighting a trade war with the US for one reason. “The ultimate goal of the consultations between the two sides is to stop the trade war and cancel all the additional tariffs, which is beneficial to China, to the United States, and to the whole world,” China Ministry of Commerce spokesperson Gao Feng said. “We hope that the two sides will continue to work together to advance the negotiations, reach a phased agreement as soon as possible, and make new progress in eliminating tariffs.” So far, the US has slapped duties on about $350B of Chinese goods & is scheduled to place tariffs on another $150B in Dec. Trade negotiators from the US & China last week ironed out a framework for the first phase of a trade deal that would see Beijing raise its agricultural purchases to as much as $50B annually in addition to reforming intellectual property practices. In return, the US agreed not to raise tariffs on $250B of Chinese goods from 25-30% on Oct 15. A decision has not been made as to whether the US will go ahead with the levies scheduled for Dec 15. The trade war has taken a toll on the Chinese economy & things are expected to get worse before they get better. China's GDP grew at a 6.2% rate Q2, the weakest in 27 years. Q3 GDP, which is due out next Thurs, is expected to have slowed to 6.1%, according to the latest forecast. It’s not just the hard economic data that is being impacted by the trade war. There are also long-term implications as companies including manufacturers of electronics, apparel & electrical equipment are uprooting supply chains & fleeing China for neighboring Vietnam, Taiwan & Thailand in droves in order to avoid the tariffs. Analysts expect tariffs to remain in place until the end of next year, causing China's GDP to slow to 5.7%. It’s not just the Chinese economy that is suffering, though. US GDP slowed to a 2% growth rate in Q2, down from 3.1% in Q1 & the global economy is expected to weaken as the trade war drags on. Gao says the declining trade figures show “there is no winner in the trade war.”
VP Mike Pence said that the US & Turkey had agreed on a 5-day Turkish cease-fire, days after the country’s forces launched an offensive in northern Syria. “It will be a pause in military operations for 120 hours while the United States facilitates the withdrawal of the YPG from the affected areas in the safe zone. And once that is completed, Turkey has agreed to a permanent cease-fire,” Pence said alongside Secretary of State Mike Pompeo in Ankara, Turkey, referring to the mostly Kurdish fighting force. The withdrawal of the Kurds from the border area has “literally already begun,” Pence said. Turkey views the Kurdish fighters as terrorists, though the US worked closely with them in the fight against the Islamic State. Pres Trump, who was in Texas for a campaign rally, told reporters later today that “this is an incredible outcome.” “Everybody said this is tougher than we thought. When those guns start shooting, they tend to do things. But I will tell you, on behalf of the United States, I want to thank Turkey, I want to thank all of the people who have gotten together and made this happen,” Trump said, noting that the outcome was “incredible.” Pence said that the agreement entails no further US sanctions on Turkey. Once the permanent cease-fire is in effect, the US sanctions imposed on Mon in retaliation for the country's incursion will be withdrawn, he said. The Turkish foreign minister Mevlut Cavusoglu said that the agreement was not a “cease-fire” shortly after Pence spoke. Turkey will continue to control the border zone, Cavusoglu said.
Turkey agrees to pause attacks in northern Syria for five days as Kurds retreat
The Federal Reserve could soon pause in its latest rate-cutting cycle
Oil futures finished higher, as the US & Turkey reached a cease-fire pact in Syria, temporarily easing Middle East tensions & a tentative Brexit deal fueled appetite for assets perceived as risky. Prices shook off earlier losses that had come on the back of a 5th straight weekly rise in US crude supplies. West Texas Intermediate crude for Nov delivery tacked on 57¢ (1.1%) to settle at $53.93 a barrel, while Dec Brent added 49¢ (0.8%) at $59.91 a barrel. Prices for both benchmarks moved decidedly higher around the last hour of regular trading. VP Mike Pence said the US & Turkey struck a cease-fire in Syria that would last 120 hours & allow Kurdish fighters to withdraw from a safe zone area. Earlier news that UK & EU leaders announced a tentative Brexit deal was supportive for oil prices, though the pact must be approved by the British parliament & other EU member states. UK Prime Minister Boris Johnson faces a tough task in winning approval. The unexpected announcement provided a lift for assets perceived as risky, including European equities & US benchmark stock indices. Oil prices had traded mostly lower shortly after the Energy Information Administration reported that US crude supplies climbed for a 5th week in a row, by 9.3M barrels last week. Crude supplies were forecast to increase by 4M barrels. The American Petroleum Institute yesterday reported a climb of 10.5M barrels.
Stocks had a quiet day again. News stories on the Brexit deal, Turkey front, General Motors (GM) probable settlement were favorable but China is the big unknown. That situation may be improving, although it's difficult to understand what is going on after more than 1 year of stumbling around. One thing certain is tariffs remain in place. The Dow went up 100 in the AM, but selling in midday brought it into the red & it finished with a modest gain. In Oct, the Dow is up 100. Investors are nervous & demand for gold continues to be strong.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
China says it's fighting a trade war with the US for one reason. “The ultimate goal of the consultations between the two sides is to stop the trade war and cancel all the additional tariffs, which is beneficial to China, to the United States, and to the whole world,” China Ministry of Commerce spokesperson Gao Feng said. “We hope that the two sides will continue to work together to advance the negotiations, reach a phased agreement as soon as possible, and make new progress in eliminating tariffs.” So far, the US has slapped duties on about $350B of Chinese goods & is scheduled to place tariffs on another $150B in Dec. Trade negotiators from the US & China last week ironed out a framework for the first phase of a trade deal that would see Beijing raise its agricultural purchases to as much as $50B annually in addition to reforming intellectual property practices. In return, the US agreed not to raise tariffs on $250B of Chinese goods from 25-30% on Oct 15. A decision has not been made as to whether the US will go ahead with the levies scheduled for Dec 15. The trade war has taken a toll on the Chinese economy & things are expected to get worse before they get better. China's GDP grew at a 6.2% rate Q2, the weakest in 27 years. Q3 GDP, which is due out next Thurs, is expected to have slowed to 6.1%, according to the latest forecast. It’s not just the hard economic data that is being impacted by the trade war. There are also long-term implications as companies including manufacturers of electronics, apparel & electrical equipment are uprooting supply chains & fleeing China for neighboring Vietnam, Taiwan & Thailand in droves in order to avoid the tariffs. Analysts expect tariffs to remain in place until the end of next year, causing China's GDP to slow to 5.7%. It’s not just the Chinese economy that is suffering, though. US GDP slowed to a 2% growth rate in Q2, down from 3.1% in Q1 & the global economy is expected to weaken as the trade war drags on. Gao says the declining trade figures show “there is no winner in the trade war.”
Beijing reveals its 'ultimate goal' in the trade war against the US
VP Mike Pence said that the US & Turkey had agreed on a 5-day Turkish cease-fire, days after the country’s forces launched an offensive in northern Syria. “It will be a pause in military operations for 120 hours while the United States facilitates the withdrawal of the YPG from the affected areas in the safe zone. And once that is completed, Turkey has agreed to a permanent cease-fire,” Pence said alongside Secretary of State Mike Pompeo in Ankara, Turkey, referring to the mostly Kurdish fighting force. The withdrawal of the Kurds from the border area has “literally already begun,” Pence said. Turkey views the Kurdish fighters as terrorists, though the US worked closely with them in the fight against the Islamic State. Pres Trump, who was in Texas for a campaign rally, told reporters later today that “this is an incredible outcome.” “Everybody said this is tougher than we thought. When those guns start shooting, they tend to do things. But I will tell you, on behalf of the United States, I want to thank Turkey, I want to thank all of the people who have gotten together and made this happen,” Trump said, noting that the outcome was “incredible.” Pence said that the agreement entails no further US sanctions on Turkey. Once the permanent cease-fire is in effect, the US sanctions imposed on Mon in retaliation for the country's incursion will be withdrawn, he said. The Turkish foreign minister Mevlut Cavusoglu said that the agreement was not a “cease-fire” shortly after Pence spoke. Turkey will continue to control the border zone, Cavusoglu said.
Turkey agrees to pause attacks in northern Syria for five days as Kurds retreat
The Federal Reserve could soon pause in its latest
rate-cutting cycle, &, depending on economic data & developments in
trade talks, that could happen at, or more likely, after the Oct 29-30
meeting. Chicago Fed Pres Charles Evans, who had strongly supported the last two rate cuts, said this week he saw no future cuts this year,
though he’s willing to consider one if the data worsen. Dallas Fed
Pres Robert Kaplan said he’s “agnostic” on future rate cuts. And
Fed Chair Jerome Powell, in a speech last week that many saw
affirming the market's view that the Fed would cut in Oct, pointedly
said decisions are being made meeting by meeting & appeared neutral
on future actions. Fed Funds Futures trade with an 83% probability of a rate cut, but
recent comments suggest there’s somewhat more risk to this outlook than
is currently priced in. In the Fed's view, it has delivered 3
rounds of stimulus: First, it reversed course from planned rate hikes
last year; 2nd, it stopped reducing its balance sheet & began
increasing it in step with economic growth & 3rd, it cut rates
twice by a qtr point. There may yet be a 3rd cut, which could come this month or Dec,
but the Fed will want to see what effects the current stimulus will have
before continuing. Many have said policymakers are willing to cut rates
more if the data get uglier, but when officials say they see policy in
the right place, it suggests they believe policy has anticipated current
economic weakness. There are still nearly 2 weeks until the meeting & data could
break decisively either way. Several additional Fed speakers this week,
including Fed Vice Chair Richard Clarida & NY Fed Pres
John Williams, could support the market's view or push back against its
certainty. If
there is no Oct rate cut, the Fed could instead cut again in
Dec or pause again. What happens with trade could be critical to
Fed decision-making. Even a partial deal between China & the US
could eliminate one of the most serious risks hanging over the US
economy. But the Fed will also need to consider the possibility of
another failed round of talks that could lead to a more severe slowing. Adding
support to the idea of a pause: The Fed is divided over the next move. A
pause could give time for the data & developments to clarify the
right policy.
The Federal Reserve could soon pause in its latest rate-cutting cycle
Oil futures finished higher, as the US & Turkey reached a cease-fire pact in Syria, temporarily easing Middle East tensions & a tentative Brexit deal fueled appetite for assets perceived as risky. Prices shook off earlier losses that had come on the back of a 5th straight weekly rise in US crude supplies. West Texas Intermediate crude for Nov delivery tacked on 57¢ (1.1%) to settle at $53.93 a barrel, while Dec Brent added 49¢ (0.8%) at $59.91 a barrel. Prices for both benchmarks moved decidedly higher around the last hour of regular trading. VP Mike Pence said the US & Turkey struck a cease-fire in Syria that would last 120 hours & allow Kurdish fighters to withdraw from a safe zone area. Earlier news that UK & EU leaders announced a tentative Brexit deal was supportive for oil prices, though the pact must be approved by the British parliament & other EU member states. UK Prime Minister Boris Johnson faces a tough task in winning approval. The unexpected announcement provided a lift for assets perceived as risky, including European equities & US benchmark stock indices. Oil prices had traded mostly lower shortly after the Energy Information Administration reported that US crude supplies climbed for a 5th week in a row, by 9.3M barrels last week. Crude supplies were forecast to increase by 4M barrels. The American Petroleum Institute yesterday reported a climb of 10.5M barrels.
Oil prices finish higher after cease-fire in Syria, tentative Brexit deal
Stocks had a quiet day again. News stories on the Brexit deal, Turkey front, General Motors (GM) probable settlement were favorable but China is the big unknown. That situation may be improving, although it's difficult to understand what is going on after more than 1 year of stumbling around. One thing certain is tariffs remain in place. The Dow went up 100 in the AM, but selling in midday brought it into the red & it finished with a modest gain. In Oct, the Dow is up 100. Investors are nervous & demand for gold continues to be strong.
Dow Jones Industrials
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