Dow was off 20 (near session lows in a tight range), advancers modestly of decliners & NAZ declined 47. The MLP index did little in the depressed 218s & the REIT index recovered 1+ to the 411s. Junk bond funds fluctuated & Treasuries edged a little higher. Oil pulled back in the 55s & gold fell 4 to 1491 (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)
The US & China have come to an understanding on the direction of their trade relationship, White House adviser Jared Kushner said, more than 15 months after a trade war between the world’s 2 biggest economies began. "We've come to an understanding with China on where we want to head," Kushner said, during a panel at Saudi Arabia's Future Investment Initiative conference in Riyadh. Kushner's comments come several days after talks between Trade Representative Robert Lighthizer, Treasury Secretary Steve Mnuchin & China's Vice Premier Liu He, during which the 2 sides "basically completed" key parts of the text for phase one of the trade deal. Trump & Chinese Pres Xi Jinping could sign the partial deal in mid-Nov at the Asia-Pacific Economic Cooperation Summit in Chile “if everything goes smoothly,” according to the South China Morning Post. As the Pres said several weeks ago, we have reached a phase-one agreement with the Chinese & both sides are working to finalize the text for a signing in Chile,” a White House spokesperson said. Expected to be included in the deal are Chinese concessions on intellectual property, financial services & agriculture. In exchange, the US agreed not to impose another round of tariffs on Chinese goods on Oct 15. Kushner called it a "fabulous" deal. "I think we had a very honest dialogue with China," he said. "They saw that we were serious because a lot of these issues were not US and China Issues. I mean like intellectual property is really China vs. civilization. It's people who want to have a rules-based system or not." Beijing also vowed to eliminate all restrictions on foreign investments, deputy Commerce Minister Wang Shouwen said during a news conference today. The Chinese gov pledged to "remove the requirement on total assets" for establishing a foreign-owned bank. "We will move faster to open finance industries," Shouwen said.
Thanks to historically low-interest rates, & cheap mortgage rates, home purchases are expected to continue to increase in 2020, according to a new forecast from the Mortgage Bankers Association (MBA). The organization estimated that mortgage originations will grow 1.6% next year to $1.29T. That's a slight drop from 2019, which could post the biggest gain since 2007 at $2.06T. Interest rates are expected to remain low next year, with the Federal Reserve poised to reduce borrowing costs for the 3rd time this year tomorrow. And as the economic outlook remains cloudy, policymakers at the US central bank seem unlikely to raise rates anytime soon. "Interest rates will, on average, remain lower for longer given the somewhat cloudy economic outlook," MBA's chief economist Mike Fratantoni said. "These lower rates will in turn support both purchase and refinance origination volume in 2020." Lower-than-expected mortgage rates gave a huge bump to the refinance market in 2019, resulting in the strongest year since 2016. "Given the capacity constraints in the industry, some of this refinance activity will spill into the first half of next year," he added. Sales could also increase thanks to lower prices. After several years of home cost surpassing average wage gains, home prices are also expected to fall next year, as the number of available houses for consumers grows, MBA said. "Moderating price growth is healthy, as it allows household incomes to catch up with home values," Fratantoni said. "This improvement in affordability will lead to more home sales – especially given the rise in household formation and growing demand from first-time homebuyers."
Oil markets are expected to face excess supplies in 2020 due to a production boost amid weak demand growth, the director for energy markets & security at the Intl Energy Agency said. “Overall, we will continue to see a well supplied market in 2020,” said Keisuke Sadamori at the Singapore Intl Energy Week. “Unless other things change, we will see a surplus probably, unless there is very strong demand growth recovery,” Sadamori added. In its latets monthly report, the Paris-based agency cut its oil demand growth figure by 100K barrels a day for 2019 & 2020. Oil demand is expected grow at a “still solid” 1.2M barrels a day in 2020, IEA said in the report. Global macroeconomic concerns such as the US-China trade dispute & the developments surrounding Brexit — the UK's exit from the EU trade bloc — are issues clouding the oil market outlook. OPEC & other producers including Russia, have implemented an output cut by 1.2M barrels per day since Jan in a bid to support the market. However, oil supplies this year have been boosted by non-OPEC members such as the US in shale oil production. Brazil & Norway will also produce more oil next year. Meanwhile, demand in 2019 has been weak, amid weak growth in H1 & India demand growth slower than expected. Growth in H2-2019 is being supported by a low base over the same period in 2018.
Oil markets could face oversupply in 2020, the IEA says
Oil finished lower, extending Mon's losses, pressured by expectations for a rise in US crude inventories & fading optimism over a US-China trade deal. US crude inventories are expected to have risen by around 700K barrels last week. Brent crude lost 3¢, trading at $61.54 a barrel, having fallen 45¢ yesterday. US West Texas Intermediate fell 27¢ (0.5%) to settle at $55.54. Last week, Brent rose by more than 4%, supported by a drop in US inventories & signs of an easing in the US-China trade dispute. This has been weighing on prices for months because of concern it will hit economic growth & demand.
Oil extends losses on expected inventory rise
Gold futures fell for a 2nd session in a row, settling at their lowest in a week, as strength in the US stock market lured investors away from the precious metal, a day ahead of the Federal Reserve's decision on interest rates. Gold for Dec fell $5.10 (0.3%) to settle at $1490 an ounce, the lowest finish for a most-active contract since Oct 22. Attention is on the Federal Reserve, which began its 2-day meeting today. The central bank is widely expected to announce a qtr percentage point interest-rate cut when the meeting concludes tomorrow, with investors focusing on clues to policy makers' appetite for further easing in the months & year ahead.
Gold prices mark one-week low a day ahead of the Fed’s interest-rate decision
Stocks did little ahead of the Fed announcement tomorrow. That's to be expected. Traders are nervous, waiting for the Fed to speak. The US-China trade deal looks to be near, which is keeping stock indices near record highs (despite the assortment of problems around the globe). After the Fed announcement, trade issues (i.e. US-China) will get the most attention by traders.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The US & China have come to an understanding on the direction of their trade relationship, White House adviser Jared Kushner said, more than 15 months after a trade war between the world’s 2 biggest economies began. "We've come to an understanding with China on where we want to head," Kushner said, during a panel at Saudi Arabia's Future Investment Initiative conference in Riyadh. Kushner's comments come several days after talks between Trade Representative Robert Lighthizer, Treasury Secretary Steve Mnuchin & China's Vice Premier Liu He, during which the 2 sides "basically completed" key parts of the text for phase one of the trade deal. Trump & Chinese Pres Xi Jinping could sign the partial deal in mid-Nov at the Asia-Pacific Economic Cooperation Summit in Chile “if everything goes smoothly,” according to the South China Morning Post. As the Pres said several weeks ago, we have reached a phase-one agreement with the Chinese & both sides are working to finalize the text for a signing in Chile,” a White House spokesperson said. Expected to be included in the deal are Chinese concessions on intellectual property, financial services & agriculture. In exchange, the US agreed not to impose another round of tariffs on Chinese goods on Oct 15. Kushner called it a "fabulous" deal. "I think we had a very honest dialogue with China," he said. "They saw that we were serious because a lot of these issues were not US and China Issues. I mean like intellectual property is really China vs. civilization. It's people who want to have a rules-based system or not." Beijing also vowed to eliminate all restrictions on foreign investments, deputy Commerce Minister Wang Shouwen said during a news conference today. The Chinese gov pledged to "remove the requirement on total assets" for establishing a foreign-owned bank. "We will move faster to open finance industries," Shouwen said.
Kushner: 'China vs. civilization' problem tackled in Trump's new deal
Thanks to historically low-interest rates, & cheap mortgage rates, home purchases are expected to continue to increase in 2020, according to a new forecast from the Mortgage Bankers Association (MBA). The organization estimated that mortgage originations will grow 1.6% next year to $1.29T. That's a slight drop from 2019, which could post the biggest gain since 2007 at $2.06T. Interest rates are expected to remain low next year, with the Federal Reserve poised to reduce borrowing costs for the 3rd time this year tomorrow. And as the economic outlook remains cloudy, policymakers at the US central bank seem unlikely to raise rates anytime soon. "Interest rates will, on average, remain lower for longer given the somewhat cloudy economic outlook," MBA's chief economist Mike Fratantoni said. "These lower rates will in turn support both purchase and refinance origination volume in 2020." Lower-than-expected mortgage rates gave a huge bump to the refinance market in 2019, resulting in the strongest year since 2016. "Given the capacity constraints in the industry, some of this refinance activity will spill into the first half of next year," he added. Sales could also increase thanks to lower prices. After several years of home cost surpassing average wage gains, home prices are also expected to fall next year, as the number of available houses for consumers grows, MBA said. "Moderating price growth is healthy, as it allows household incomes to catch up with home values," Fratantoni said. "This improvement in affordability will lead to more home sales – especially given the rise in household formation and growing demand from first-time homebuyers."
Home purchases to remain solid in 2020, thanks to low interest rates
Oil markets are expected to face excess supplies in 2020 due to a production boost amid weak demand growth, the director for energy markets & security at the Intl Energy Agency said. “Overall, we will continue to see a well supplied market in 2020,” said Keisuke Sadamori at the Singapore Intl Energy Week. “Unless other things change, we will see a surplus probably, unless there is very strong demand growth recovery,” Sadamori added. In its latets monthly report, the Paris-based agency cut its oil demand growth figure by 100K barrels a day for 2019 & 2020. Oil demand is expected grow at a “still solid” 1.2M barrels a day in 2020, IEA said in the report. Global macroeconomic concerns such as the US-China trade dispute & the developments surrounding Brexit — the UK's exit from the EU trade bloc — are issues clouding the oil market outlook. OPEC & other producers including Russia, have implemented an output cut by 1.2M barrels per day since Jan in a bid to support the market. However, oil supplies this year have been boosted by non-OPEC members such as the US in shale oil production. Brazil & Norway will also produce more oil next year. Meanwhile, demand in 2019 has been weak, amid weak growth in H1 & India demand growth slower than expected. Growth in H2-2019 is being supported by a low base over the same period in 2018.
Oil markets could face oversupply in 2020, the IEA says
Oil finished lower, extending Mon's losses, pressured by expectations for a rise in US crude inventories & fading optimism over a US-China trade deal. US crude inventories are expected to have risen by around 700K barrels last week. Brent crude lost 3¢, trading at $61.54 a barrel, having fallen 45¢ yesterday. US West Texas Intermediate fell 27¢ (0.5%) to settle at $55.54. Last week, Brent rose by more than 4%, supported by a drop in US inventories & signs of an easing in the US-China trade dispute. This has been weighing on prices for months because of concern it will hit economic growth & demand.
Oil extends losses on expected inventory rise
Gold futures fell for a 2nd session in a row, settling at their lowest in a week, as strength in the US stock market lured investors away from the precious metal, a day ahead of the Federal Reserve's decision on interest rates. Gold for Dec fell $5.10 (0.3%) to settle at $1490 an ounce, the lowest finish for a most-active contract since Oct 22. Attention is on the Federal Reserve, which began its 2-day meeting today. The central bank is widely expected to announce a qtr percentage point interest-rate cut when the meeting concludes tomorrow, with investors focusing on clues to policy makers' appetite for further easing in the months & year ahead.
Gold prices mark one-week low a day ahead of the Fed’s interest-rate decision
Stocks did little ahead of the Fed announcement tomorrow. That's to be expected. Traders are nervous, waiting for the Fed to speak. The US-China trade deal looks to be near, which is keeping stock indices near record highs (despite the assortment of problems around the globe). After the Fed announcement, trade issues (i.e. US-China) will get the most attention by traders.
Dow Jones Industrials
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