Dow gained 150 (but below AM highs), advancers over decliners about 2-1 & NAZ went up 47. The MLP index crawled up to the 232s & the REIT index inched higher in the 408s. Junk bond funds had little movement today & Treasuries dropped in price. Oil gained 1+ to the 53s & gold fell 13 to 1499 (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)
US consumer prices were unchanged in Sep & underlying inflation retreated, supporting expectations the Federal Reserve will cut interest rates in Oct for the 3rd time this year amid risks to the economy from trade tensions. A strong labor market could, however, complicate matters for the Fed amid divisions among officials on the appropriate response to the rising headwinds to growth. Other data showed an unexpected decline in the number of Americans filing claims for unemployment benefits last week. Layoffs remain low even as companies are becoming hesitant to hire more workers because of a slowing economy. The unemployment rate is near a 50-year low of 3.5%. The longest economic expansion on record, now in its 11th year, is under threat from the 15-month-old US-China trade war, slowing growth overseas & a likely disorderly exit from the EU by Britain. The trade war has undermined business investment & helped to drive manufacturing into recession. Growth is also being restricted by the fading stimulus from last year’s $1.5T tax cut package. The Labor Dept said the flat consumer price index last month was the weakest reading since Jan & came as increases in the cost of food & rents were offset by decreases in the prices of gasoline & used cars & trucks. The CPI edged up 0.1% in Aug. In the 12 months thru Sep, the CPI increased 1.7% after advancing by the same margin in Aug. The forecast called for the CPI nudging up 0.1% in Sep & rising 1.8% on a year-on-year basis. Excluding the volatile food and energy components, the CPI climbed 0.1% after gaining 0.3% for 3 straight months. Core CPI was restrained by moderate gains in healthcare costs, as well as declines in apparel, new motor vehicles & communications prices. In the 12 months thru Sep, the core CPI increased 2.4%, matching the Aug rise. The report came on the heels of data on Tues showing the biggest drop in producer prices in 8 months in Sep. Minutes of the central bank's Sep 17-18 policy meeting showed that while officials agreed risks to the economy “had increased somewhat,” they were divided on what the appropriate response should be.
U.S. consumer inflation muted; labor market tightening
Gold futures held their ground above the key $1500 mark at today's settlement, but posted their lowest finish in more than a week after Pres Trump said he plans to meet with Chinese Vice Premier Lui He tomorrow as the world economic powers hold their first day of talks in DC. “Big day of negotiations with China. They want to make a deal, but do I? I will meet with the Vice Premier tomorrow at The White House,” Trump tweeted. Dec gold lost $11.90 (0.8%) to settle at $1501 an ounce, after rising 0.6% yesterday. The most-active contract saw its lowest finish since Oct 1 Markets have been bouncing around as US-China trade negotiations get under way in earnest today. A number of conflicting reports over the likelihood of a deal had knocked stocks & gold prices around.
Gold posts lowest finish in over a week on news of progress in U.S.-China trade negotiations
Oil prices climbed, settling at their highest in more than a week, as traders attempted to make sense of conflicting news reports around US-China trade talks & parsed OPEC's monthly assessment of global supply & demand. West Texas Intermediate crude for Nov delivery rose 96¢ (1.8%) to settle at $53.55 a barrel, the highest front-month settlement since Oct 1. The global benchmark, Dec Brent crude gained 78¢ (1.3%) to end at $59.10 a barrel for the highest finish since Sep 30. Today, Pres Trump said in a tweet that he plans to meet with Chinese Vice Premier Liu He tomorrow. That provided an added boost to oil prices. That followed a report Wed that the White House could implement a previously agreed upon currency deal with China ahead of schedule & suspend tariff hikes due to take effect next week. Trump greenlighted issuing licenses to some US companies to conduct business with Chinese telecom giant Huawei Technologies. Earlier, the South China Morning Post had reported that talks earlier this week laying the groundwork for high-level talks due to begin today had made little progress & that China's main trade delegation would cut short its visit from 2 days to one.
The UAW strike against General Motors (GM) is having a major impact on the automaker's bottom line. It has been estimated that 4 weeks of strikes have erased $1.13B of profits. The strike isn't just impacting the automaker. UAW members have lost out on more than $624M of wages while the federal gov & the state of Mich have taken hits of $250M & $13.8M respectively. CEO Mary Barra had a meeting earlier this week with union pres Gary Jones & VP Terry Dittes in an effort to end the 25-day old strike. Talks between GM & the UAW resumed Mon after union negotiations on Sun said they had taken a "turn for the worse," accusing the automaker of lacking "basic decency." The union wants GM to commit to moving at least some production from Mexico to the US, including the shuttered Lordstown, Ohio, plant that caught Pres Trump's attention in Mar. The stock went up 52¢.
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
The £ rallied today after the leaders of the UK & Ireland said there could be a pathway to an orderly exit of Britain from the EU. British Prime Minister Boris Johnson & Irish leader Leo Varadkar provided a status update on the issue after a private lunch meeting in northwest England. “Both continue to believe that a deal is in everybody’s interest,” they said in a joint statement. “They agreed that they could see a pathway to a possible deal.” The £ jumped to $1.2454 versus $1.2206 a day earlier, for a gain of 2% — its biggest one-day percentage gain since Mar 13. It also rose strongly against the €.
A lot is riding on the US-China talks tomorrow. The markets welcomed the hopes for a trade deal with buyers controlling stock prices for much of the day. However the Dow finished 100 below highs in the AM. Nervousness by traders produced the volatility. A Brexit deal would be another boost for stocks & the early word is that the leaders are trying to come up with a deal. Tomorrow has the makings of a wild day in the stock market with the Dow starting at 26.5K.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
US consumer prices were unchanged in Sep & underlying inflation retreated, supporting expectations the Federal Reserve will cut interest rates in Oct for the 3rd time this year amid risks to the economy from trade tensions. A strong labor market could, however, complicate matters for the Fed amid divisions among officials on the appropriate response to the rising headwinds to growth. Other data showed an unexpected decline in the number of Americans filing claims for unemployment benefits last week. Layoffs remain low even as companies are becoming hesitant to hire more workers because of a slowing economy. The unemployment rate is near a 50-year low of 3.5%. The longest economic expansion on record, now in its 11th year, is under threat from the 15-month-old US-China trade war, slowing growth overseas & a likely disorderly exit from the EU by Britain. The trade war has undermined business investment & helped to drive manufacturing into recession. Growth is also being restricted by the fading stimulus from last year’s $1.5T tax cut package. The Labor Dept said the flat consumer price index last month was the weakest reading since Jan & came as increases in the cost of food & rents were offset by decreases in the prices of gasoline & used cars & trucks. The CPI edged up 0.1% in Aug. In the 12 months thru Sep, the CPI increased 1.7% after advancing by the same margin in Aug. The forecast called for the CPI nudging up 0.1% in Sep & rising 1.8% on a year-on-year basis. Excluding the volatile food and energy components, the CPI climbed 0.1% after gaining 0.3% for 3 straight months. Core CPI was restrained by moderate gains in healthcare costs, as well as declines in apparel, new motor vehicles & communications prices. In the 12 months thru Sep, the core CPI increased 2.4%, matching the Aug rise. The report came on the heels of data on Tues showing the biggest drop in producer prices in 8 months in Sep. Minutes of the central bank's Sep 17-18 policy meeting showed that while officials agreed risks to the economy “had increased somewhat,” they were divided on what the appropriate response should be.
U.S. consumer inflation muted; labor market tightening
Gold futures held their ground above the key $1500 mark at today's settlement, but posted their lowest finish in more than a week after Pres Trump said he plans to meet with Chinese Vice Premier Lui He tomorrow as the world economic powers hold their first day of talks in DC. “Big day of negotiations with China. They want to make a deal, but do I? I will meet with the Vice Premier tomorrow at The White House,” Trump tweeted. Dec gold lost $11.90 (0.8%) to settle at $1501 an ounce, after rising 0.6% yesterday. The most-active contract saw its lowest finish since Oct 1 Markets have been bouncing around as US-China trade negotiations get under way in earnest today. A number of conflicting reports over the likelihood of a deal had knocked stocks & gold prices around.
Gold posts lowest finish in over a week on news of progress in U.S.-China trade negotiations
Oil prices climbed, settling at their highest in more than a week, as traders attempted to make sense of conflicting news reports around US-China trade talks & parsed OPEC's monthly assessment of global supply & demand. West Texas Intermediate crude for Nov delivery rose 96¢ (1.8%) to settle at $53.55 a barrel, the highest front-month settlement since Oct 1. The global benchmark, Dec Brent crude gained 78¢ (1.3%) to end at $59.10 a barrel for the highest finish since Sep 30. Today, Pres Trump said in a tweet that he plans to meet with Chinese Vice Premier Liu He tomorrow. That provided an added boost to oil prices. That followed a report Wed that the White House could implement a previously agreed upon currency deal with China ahead of schedule & suspend tariff hikes due to take effect next week. Trump greenlighted issuing licenses to some US companies to conduct business with Chinese telecom giant Huawei Technologies. Earlier, the South China Morning Post had reported that talks earlier this week laying the groundwork for high-level talks due to begin today had made little progress & that China's main trade delegation would cut short its visit from 2 days to one.
Oil ends at highest in over a week as traders focus on U.S.-China trade talks
The UAW strike against General Motors (GM) is having a major impact on the automaker's bottom line. It has been estimated that 4 weeks of strikes have erased $1.13B of profits. The strike isn't just impacting the automaker. UAW members have lost out on more than $624M of wages while the federal gov & the state of Mich have taken hits of $250M & $13.8M respectively. CEO Mary Barra had a meeting earlier this week with union pres Gary Jones & VP Terry Dittes in an effort to end the 25-day old strike. Talks between GM & the UAW resumed Mon after union negotiations on Sun said they had taken a "turn for the worse," accusing the automaker of lacking "basic decency." The union wants GM to commit to moving at least some production from Mexico to the US, including the shuttered Lordstown, Ohio, plant that caught Pres Trump's attention in Mar. The stock went up 52¢.
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
How much UAW strike is costing GM in profits
The £ rallied today after the leaders of the UK & Ireland said there could be a pathway to an orderly exit of Britain from the EU. British Prime Minister Boris Johnson & Irish leader Leo Varadkar provided a status update on the issue after a private lunch meeting in northwest England. “Both continue to believe that a deal is in everybody’s interest,” they said in a joint statement. “They agreed that they could see a pathway to a possible deal.” The £ jumped to $1.2454 versus $1.2206 a day earlier, for a gain of 2% — its biggest one-day percentage gain since Mar 13. It also rose strongly against the €.
British pound surges 2% after leaders say there could be Brexit ‘pathway’
A lot is riding on the US-China talks tomorrow. The markets welcomed the hopes for a trade deal with buyers controlling stock prices for much of the day. However the Dow finished 100 below highs in the AM. Nervousness by traders produced the volatility. A Brexit deal would be another boost for stocks & the early word is that the leaders are trying to come up with a deal. Tomorrow has the makings of a wild day in the stock market with the Dow starting at 26.5K.
Dow Jones Industrials
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