Dow rose 76, advancers over decliners about 3-1 & NAZ gained 30. The MLP index hardly budged in price & the REIT index went up 2 to 411 (record territory). Junk bond funds were little changed & Treasuries continued weak. Oil slid back in the 53s & gold inched up 1 to 1495.
AMJ (Alerian MLP Index tracking fund)
Stocks are higher after leaders from the EU & the UK announced they reached a draft agreement on a Brexit deal. EU & British negotiators have agreed on an outline Brexit deal which still needs to be backed by EU member states & by the respective parliaments. European Commission Pres Jean-Claude Juncker tweeted: "Where there is a will, there is a #deal - we have one! It’s a fair and balanced agreement for the EU and the UK and it is testament to our commitment to find solutions." Juncker told the 27 EU nations they should endorse the deal. Overseas, the £ gained on word of a Brexit deal, up as much as 1.2% to 1.2990 versus the $ before paring its gains. European stock markets were higher across the board, with Britain's FTSE leading the way, up 0.8%. In Asia, Hong Kong's Hang Seng index added 0.4%, Tokyo's Nikkei 225 index slid lower while the Shanghai Composite index slipped 0.2%.
Top White House economic advisor Larry Kudlow pushed back on criticism of the tentative trade agreement with China, explaining why he sees the negotiations accelerating toward a more complete agreement. “People shouldn’t be so pessimistic on the China talks and that some good things could happen,” Kudlow said. “For the skeptics out there, I appreciate that and I respect that but I’m telling you that there’s a lot of momentum and there’s agreement on both sides.” Some analysts were skeptical, as strategists said the agreement only “focused on the low-hanging fruit.” But Kudlow asserted that there will be new opportunities for US companies, pointing especially his expectation that China will be “lowering non-tariff barriers on agriculture.” “There are also going to be various market access openings with respect to agriculture products and agriculture standards that the Chinese seem to be loosening up on,” Kudlow added. Representatives for Pres Trump's administration are expected to meet with top Chinese trade negotiations in the next couple of weeks. China would like to see more details added to the first part of the trade deal before Chinese Pres Xi Jinping signs.
White House economic advisor Kudlow says there’s ‘a lot of momentum’ to finish China trade deal
IBM (IBM), a Dow stock, shares moved lower after the company issued weaker-than-expected Q3 revenue. EPS excluding certain items was $2.68 vs $2.67 expected & revenue came in at $18.03B vs $18.22B expected. Revenue has now dropped for 5 straight qtrs as growth in the company's cloud business hasn't been able to make up for declining sales in its services, hardware & financing businesses. Revenue in Q3 fell about 4% on an annualized basis, IBM said, even with contributions from Red Hat, an acquisition that closed in Q3. Red Hat revenue grew 19% in the qtr on a normalized basis, up from the 14.8% growth in its last qtr as an independent company. IBM’s revenue has now gone down for the 5th consecutive qtr. In Q3, IBM lowered its full-year earnings estimate to take into account the impact from Red Hat, pointing to the suspension of share buybacks, an adjustment to the balance of deferred Red Hat revenue & equity and retention costs. The company announced deals with AT&T (T), Avaya (AVYA) & the Bank of China, & it introduced the z15 mainframe. IBM continues to see EPS at least $12.80, excluding certain items, for all of 2019. The forecast calls for EPS of $12.81, excluding certain items. The stock sank 8.73 (6%).
If you would like to learn more about IBM, click on this link:
club.ino.com/trend/analysis/stock/IBM?a_aid=CD3289&a_bid=6ae5b6f7
IBM stock falls on revenue miss
The Philadelphia Federal Reserve said its gauge of business activity fell to 5.6 in Oct from 12 in Sep. The forecast called for a 7.1 reading. Any reading above zero indicates improving conditions. Details were seen as a little more upbeat than the headline. On the plus side, the index for new orders & the number of employees rose. On the negative side, shipments & the average workweek slid. The measure on 6-month business outlook rebounded after a sharp drop in the prior month. A similar survey conducted by the NY Fed recently saw sentiment inch higher to 4 in Oct. The 2 regional reports get attention as leading indicators of the national ISM factory index. Firms in Philadelphia & NY are less sensitive to the China trade war than manufacturers in other regions. In Sep, the ISM manufacturing index fell to 47.8, the lowest level since 2009, from 49.1 the prior month. Readings below 50 indicate contraction. The manufacturing sector is in recession, damaged by intl trade tensions, weak global growth & a strong $.
News stories are coming in mixed. Economic data in the US is in soft, no way around it. With very sluggish economies overseas, that condition is not likely to change much in the coming months. Then there are trade stories. A Brexit deal seems to be shaping up, but more work is needed before all parties sign off. The outlook for a US-China trade deal remains cloudy. However, the Dow is within 300 of setting a new record, making the bulls happy.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 52.86 | -0.50 | -0.9% |
| GC=F | Gold | 1,497.10 | +3.10 | +0.2% |
Stocks are higher after leaders from the EU & the UK announced they reached a draft agreement on a Brexit deal. EU & British negotiators have agreed on an outline Brexit deal which still needs to be backed by EU member states & by the respective parliaments. European Commission Pres Jean-Claude Juncker tweeted: "Where there is a will, there is a #deal - we have one! It’s a fair and balanced agreement for the EU and the UK and it is testament to our commitment to find solutions." Juncker told the 27 EU nations they should endorse the deal. Overseas, the £ gained on word of a Brexit deal, up as much as 1.2% to 1.2990 versus the $ before paring its gains. European stock markets were higher across the board, with Britain's FTSE leading the way, up 0.8%. In Asia, Hong Kong's Hang Seng index added 0.4%, Tokyo's Nikkei 225 index slid lower while the Shanghai Composite index slipped 0.2%.
Stocks rally as EU,UK agree on Brexit
Top White House economic advisor Larry Kudlow pushed back on criticism of the tentative trade agreement with China, explaining why he sees the negotiations accelerating toward a more complete agreement. “People shouldn’t be so pessimistic on the China talks and that some good things could happen,” Kudlow said. “For the skeptics out there, I appreciate that and I respect that but I’m telling you that there’s a lot of momentum and there’s agreement on both sides.” Some analysts were skeptical, as strategists said the agreement only “focused on the low-hanging fruit.” But Kudlow asserted that there will be new opportunities for US companies, pointing especially his expectation that China will be “lowering non-tariff barriers on agriculture.” “There are also going to be various market access openings with respect to agriculture products and agriculture standards that the Chinese seem to be loosening up on,” Kudlow added. Representatives for Pres Trump's administration are expected to meet with top Chinese trade negotiations in the next couple of weeks. China would like to see more details added to the first part of the trade deal before Chinese Pres Xi Jinping signs.
White House economic advisor Kudlow says there’s ‘a lot of momentum’ to finish China trade deal
IBM (IBM), a Dow stock, shares moved lower after the company issued weaker-than-expected Q3 revenue. EPS excluding certain items was $2.68 vs $2.67 expected & revenue came in at $18.03B vs $18.22B expected. Revenue has now dropped for 5 straight qtrs as growth in the company's cloud business hasn't been able to make up for declining sales in its services, hardware & financing businesses. Revenue in Q3 fell about 4% on an annualized basis, IBM said, even with contributions from Red Hat, an acquisition that closed in Q3. Red Hat revenue grew 19% in the qtr on a normalized basis, up from the 14.8% growth in its last qtr as an independent company. IBM’s revenue has now gone down for the 5th consecutive qtr. In Q3, IBM lowered its full-year earnings estimate to take into account the impact from Red Hat, pointing to the suspension of share buybacks, an adjustment to the balance of deferred Red Hat revenue & equity and retention costs. The company announced deals with AT&T (T), Avaya (AVYA) & the Bank of China, & it introduced the z15 mainframe. IBM continues to see EPS at least $12.80, excluding certain items, for all of 2019. The forecast calls for EPS of $12.81, excluding certain items. The stock sank 8.73 (6%).
If you would like to learn more about IBM, click on this link:
club.ino.com/trend/analysis/stock/IBM?a_aid=CD3289&a_bid=6ae5b6f7
IBM stock falls on revenue miss
The Philadelphia Federal Reserve said its gauge of business activity fell to 5.6 in Oct from 12 in Sep. The forecast called for a 7.1 reading. Any reading above zero indicates improving conditions. Details were seen as a little more upbeat than the headline. On the plus side, the index for new orders & the number of employees rose. On the negative side, shipments & the average workweek slid. The measure on 6-month business outlook rebounded after a sharp drop in the prior month. A similar survey conducted by the NY Fed recently saw sentiment inch higher to 4 in Oct. The 2 regional reports get attention as leading indicators of the national ISM factory index. Firms in Philadelphia & NY are less sensitive to the China trade war than manufacturers in other regions. In Sep, the ISM manufacturing index fell to 47.8, the lowest level since 2009, from 49.1 the prior month. Readings below 50 indicate contraction. The manufacturing sector is in recession, damaged by intl trade tensions, weak global growth & a strong $.
Philly Fed manufacturing index stumbles in October
News stories are coming in mixed. Economic data in the US is in soft, no way around it. With very sluggish economies overseas, that condition is not likely to change much in the coming months. Then there are trade stories. A Brexit deal seems to be shaping up, but more work is needed before all parties sign off. The outlook for a US-China trade deal remains cloudy. However, the Dow is within 300 of setting a new record, making the bulls happy.
Dow Jones Industrials
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