Dow lost 29, decliners modestly ahead of advancers & NAZ was off 8. The MLP index fell 1+ to the 221s & the REIT index remained off a tad to the 407s. Junk bond funds did little & Treasuries were bid higher. Oil fell 1+ to the 53s & gold rose 7 to 1496 (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)
Treasury Secretary Steve Mnuchin said he expects the mid-Dec round of tariffs on Chinese goods to take effect if no deal is reached between the 2 economic superpowers. “I have every expectation if there’s not a deal those tariffs would go in place, but I expect we’ll have a deal,” Mnuchin said. Mnuchin's commitment to keeping tariffs on the table comes days after Pres Trump announced a “fundamental agreement in principle” for a “phase one deal” following a round of renewed high-level negotiations with Beijing in DC. The 2 countries addressed intellectual property rights, financial services — including currency & foreign exchange — & “very significant structural issues” dealing with agriculture, a key sticking point in the tit-for-tat tariff battle, Mnuchin added. He said the US expects China to buy $40-50B worth of agriculture products. He also said that China will be removing some tariffs on imports of US goods. Trump, in an all-caps tweet last evening, exclaimed, “CHINA HAS ALREADY BEGUN AGRICULTURAL PURCHASES FROM OUR GREAT PATRIOT FARMERS & RANCHERS!” In the Oval Office on Fri, Mnuchin said the White House would hold off on tomorrow's deadline to impose more tariffs on China. The next tariff deadline is Dec 15. But he expects that, pending more meetings with Beijing officials, Trump & Chinese Pres Xi Jinping will be able to finish the deal during their anticipated meeting in Chile in a few weeks.
Mnuchin says he expects tariffs to go up in December if there is no China deal in place
Oil falls 2% in caution over first phase of US-China trade deal
China's import & export data for Sep came in worse than expected amid the country's ongoing trade friction with the US, according to Chinese customs. In $ terms, China's exports fell 3.2% in Sep from a year ago, while imports dropped 8.5% during the same period. The country's total trade balance in Sep was $39.65B. The forecast had expected Chinese exports denominated in the $ to fall 3% & imports to decline 5.2%, compared to a year ago. The country's overall trade surplus for last month was forecast to be $33.3B. In Aug, China's exports in $s unexpectedly fell by 1% year-over-year — the biggest fall since Jun — as shipments to the US slowed down sharply. Chinese imports, meanwhile, dropped 5.6% in the same period. That brought its trade surplus to $34.8B, according to Chinese customs data. In yuan terms, China's exports in Sep was 0.7% lower from a year ago, while imports dropped 6.2% during the same period. The Chinese economy is growing at a slower pace amid the protracted trade battle between Beijing & DC. Officials from both countries met in DC last week to discuss trade, & Pres Trump said the US has come to a “very substantial phase one deal” with China. Trump said that deal will involve China purchasing $40-50B worth of American farm products, & address concerns such as intellectual property theft & currency manipulation. The US also suspended an increase in tariffs on Chinese goods planned for this week. A spokesman from the Chinese customs said the country's trade frictions with the US has affected its export & import activity.
China’s imports and exports fell more than expected in September
The NY Fed's Empire State business-conditions index showed slight improvement in Oct, according to a report posted about 18 hours ahead of schedule. The Empire State index had been set to be released tomorrow AM. The Empire State index is closely watched as one of the first indicators of a month's manufacturing activity. Recent reports have been flat, as the factory sector in the region has suffered from the trade war between the US & China, the sluggish global economy & the strong $. The report shows that a rebound in sentiment pushed the headline Empire State index up to 4 in Oct from 2 in the prior month. The forecast had been expecting a 0.8 reading. Any reading above zero indicates improving conditions.
Gold futures rose to post their first gain in 3 sessions, finding support as the “phase one” of the US-China trade deal reportedly hit a snag & after the Federal Reserve announced last week that it will start expanding its balance sheet next week. Wariness over the strength of an agreement hammered out between the US & China last week was growing on Mon after a report that Beijing will insist on more talks with the US before signing any such deal. The Fed, in a surprise announcement, set in motion a plan Fri to ease unexpected strains seen in short-term money markets last month. Dec gold climbed by $8 (0.6%) to settle at $1497 an ounce after posting its lowest finish month to date on Fri.
Gold ends higher on doubts about U.S.-China trade deal and on prospects for Fed balance sheet expansion
Little was accomplished in the semi-holiday trading today. The US-China trade continues to stumble along, the Turkey mess is getting worse & the General Motors (GM) strike drags on. All considered, stocks held up pretty well today. But on relatively quiet day, demand for gold was strong. Tomorrow the full force of traders should be back & that could be a more exciting day when big bank earnings are released.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Treasury Secretary Steve Mnuchin said he expects the mid-Dec round of tariffs on Chinese goods to take effect if no deal is reached between the 2 economic superpowers. “I have every expectation if there’s not a deal those tariffs would go in place, but I expect we’ll have a deal,” Mnuchin said. Mnuchin's commitment to keeping tariffs on the table comes days after Pres Trump announced a “fundamental agreement in principle” for a “phase one deal” following a round of renewed high-level negotiations with Beijing in DC. The 2 countries addressed intellectual property rights, financial services — including currency & foreign exchange — & “very significant structural issues” dealing with agriculture, a key sticking point in the tit-for-tat tariff battle, Mnuchin added. He said the US expects China to buy $40-50B worth of agriculture products. He also said that China will be removing some tariffs on imports of US goods. Trump, in an all-caps tweet last evening, exclaimed, “CHINA HAS ALREADY BEGUN AGRICULTURAL PURCHASES FROM OUR GREAT PATRIOT FARMERS & RANCHERS!” In the Oval Office on Fri, Mnuchin said the White House would hold off on tomorrow's deadline to impose more tariffs on China. The next tariff deadline is Dec 15. But he expects that, pending more meetings with Beijing officials, Trump & Chinese Pres Xi Jinping will be able to finish the deal during their anticipated meeting in Chile in a few weeks.
Mnuchin says he expects tariffs to go up in December if there is no China deal in place
Oil prices fell sharply as a lack of
details about the first phase of a trade deal between the US & China undercut optimism over a trade relations thaw that had helped
lift crude markets at the end of last week. Brent crude dropped
$1.27 (2.1%) to $59.24 a barrel, while West Texas Intermediate
(WTI) crude lost $1.11 (2%) to settle at $53.59 a barrel. Late
on Fri, the US & China outlined the first stage of a
trade deal & suspended this week's scheduled US tariff hikes. Brent & WTI rose more than 3% last week, their first weekly increase in 3, on the signs of progress toward a trade deal that would boost
crude oil demand. But existing tariffs remain in place &
officials on both sides said much more work was needed before an accord
could be agreed. There
are also worries that further escalation along the Syrian & Turkish
border could affect output or exports from Iraq, providing more support
for oil prices. Syrian troops entered a northeastern town today. The
Saudi energy minister, Prince Abdulaziz bin Salman, said oil exporters
taking part in a global output deal between OPEC & its allies, a
grouping known as OPEC+, were showing serious commitment to the cuts. Russian Energy Minister Alexander Novak said there were no talks underway to change the OPEC+ deal. Kuwait's
oil minister said it was too early to discuss a possible buildup in oil
inventories in 2020. Khaled al-Fadhel said a price range of $50-70 per
barrel would be acceptable. The compliance of OPEC+ producers with
the supply-reduction agreement was seen at above 200% in Sep,
sources familiar with the matter said. China showed
strong demand for oil, with its Sep imports rising 10.8% from a
year earlier as refiners ramped up output amid stable profit margins &
solid demand for fuel.
Oil falls 2% in caution over first phase of US-China trade deal
China's import & export data for Sep came in worse than expected amid the country's ongoing trade friction with the US, according to Chinese customs. In $ terms, China's exports fell 3.2% in Sep from a year ago, while imports dropped 8.5% during the same period. The country's total trade balance in Sep was $39.65B. The forecast had expected Chinese exports denominated in the $ to fall 3% & imports to decline 5.2%, compared to a year ago. The country's overall trade surplus for last month was forecast to be $33.3B. In Aug, China's exports in $s unexpectedly fell by 1% year-over-year — the biggest fall since Jun — as shipments to the US slowed down sharply. Chinese imports, meanwhile, dropped 5.6% in the same period. That brought its trade surplus to $34.8B, according to Chinese customs data. In yuan terms, China's exports in Sep was 0.7% lower from a year ago, while imports dropped 6.2% during the same period. The Chinese economy is growing at a slower pace amid the protracted trade battle between Beijing & DC. Officials from both countries met in DC last week to discuss trade, & Pres Trump said the US has come to a “very substantial phase one deal” with China. Trump said that deal will involve China purchasing $40-50B worth of American farm products, & address concerns such as intellectual property theft & currency manipulation. The US also suspended an increase in tariffs on Chinese goods planned for this week. A spokesman from the Chinese customs said the country's trade frictions with the US has affected its export & import activity.
China’s imports and exports fell more than expected in September
The NY Fed's Empire State business-conditions index showed slight improvement in Oct, according to a report posted about 18 hours ahead of schedule. The Empire State index had been set to be released tomorrow AM. The Empire State index is closely watched as one of the first indicators of a month's manufacturing activity. Recent reports have been flat, as the factory sector in the region has suffered from the trade war between the US & China, the sluggish global economy & the strong $. The report shows that a rebound in sentiment pushed the headline Empire State index up to 4 in Oct from 2 in the prior month. The forecast had been expecting a 0.8 reading. Any reading above zero indicates improving conditions.
Empire State index — released a day ahead of schedule — shows slightly better factory activity in October
Gold futures rose to post their first gain in 3 sessions, finding support as the “phase one” of the US-China trade deal reportedly hit a snag & after the Federal Reserve announced last week that it will start expanding its balance sheet next week. Wariness over the strength of an agreement hammered out between the US & China last week was growing on Mon after a report that Beijing will insist on more talks with the US before signing any such deal. The Fed, in a surprise announcement, set in motion a plan Fri to ease unexpected strains seen in short-term money markets last month. Dec gold climbed by $8 (0.6%) to settle at $1497 an ounce after posting its lowest finish month to date on Fri.
Gold ends higher on doubts about U.S.-China trade deal and on prospects for Fed balance sheet expansion
Little was accomplished in the semi-holiday trading today. The US-China trade continues to stumble along, the Turkey mess is getting worse & the General Motors (GM) strike drags on. All considered, stocks held up pretty well today. But on relatively quiet day, demand for gold was strong. Tomorrow the full force of traders should be back & that could be a more exciting day when big bank earnings are released.
Dow Jones Industrials
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