Dow rose 34, decliners over advancers 3-2 & NAZ went up 6. The MLP index pulled back 1+ to the 222s & the REIT index slid to the 407s. Junk bond funds fluctuated & Treasuries saw a little buying. Oil dropped 1+ to the 53s while gold added 7 to 1496.
AMJ (Alerian MLP Index tracking fund)
Stocks traded flat after Beijing said the US & China still have some work to do before finalizing their "phase one" trade agreement. “While the negotiations do appear to have produced a fundamental understanding on the key issues and the broader benefits of friendly relations, the Champagne should probably be kept on ice, at least until the two presidents put pen to paper,” wrote the state-owned China Daily. China wants further talks, as soon as the end of Oct, in order to hammer out the final details before Chinese Pres Xi Jinping agrees to sign it. But Hu Xijin, the editor in chief of China's state-run Global Times, said things are moving in the right direction. "Based on what I know, China-US trade talks made breakthrough last week and the two sides have the strong will to reach a final deal. Initial statement of the Chinese side is moderate," he tweeted today. "This is China's habit. It doesn't mean China's real attitude is not positive." Trade negotiators from the US & China on Fri agreed to a deal in principle that is expected to take 3-5 weeks to complete. As part of the deal, China agreed to increase its purchases of US agricultural products & Boeing (BA & a Dow stock) aircraft, in addition to making reforms on intellectual property and financial services. The US has agreed to not raise tariffs from 25% to 30% tomorrow. A decision has not yet been made on the tariff increase scheduled for Dec 15. All 3 of the major averages opened lower. Overnight, China reported exports to the US fell 17.8% in Sep from a year earlier to $36.5B. Imports of American goods sank 20.6% to $10.6B. In Asian markets, China's Shanghai Composite gained 1.2% & Hong Kong's Hang Seng finished higher by 0.8%. Markets in Japan were closed for a holiday. In Europe, all of the major averages were lower, with France's CAC down 1% to pace the decline.
The US & China still have some work to do before finalizing their “phase one” trade deal.
Beijing wants to send Vice Premier Liu He, China's top trade negotiator, will come to DC as soon as the end of Oct to finalize a deal that can be signed next month at the Asia-Pacific Economic Cooperation conference next month in Chile. “While the negotiations do appear to have produced a fundamental understanding on the key issues and the broader benefits of friendly relations, the Champagne should probably be kept on ice, at least until the two presidents put pen to paper,” wrote the state-owned China Daily. The “phase one” agreement came days before customs data released today by Beijing showed Chinese exports to the US fell 17.8% to $36.5B in Sep, evidence the trade war is taking a toll on the world's 2nd-largest economy. The US is the biggest buyer of Chinese goods. Trade negotiators from the US & China on Fri agreed to a deal in principle that is expected to take 3-5 weeks to complete. Trump touted the agreement as a big win for US industrial companies & farmers.
Treasury Secretary Steve Mnuchin said that sanctions against Turkey are ready & that he is waiting for a decision from Pres Trump following the nation's encroachment into northern Syria after US troops withdrew. Trump will be briefed on sanctioning Turkey today, Mnuchin told reporters. "As I've said, the sanctions are ready to go," he said. "We'll be updating the president this morning, and then when he makes the decision, we'll activate." "This is an evolving situation," Mnuchin said. "We're monitoring the situation carefully." Trump said yesterday that he & members of Congress are working to punish Turkey economically. "Dealing with [Sen. Lindsey Graham] and many members of Congress, including Democrats, about imposing powerful Sanctions on Turkey," Trump tweeted. "Treasury is ready to go, additional legislation may be sought. There is great consensus on this. Turkey has asked that it not be done. Stay tuned!" The UN says at least 130K have been displaced by the fighting in northeastern Syria. The Kurdish-led administration in northern Syria said in a statement that 950 ISIS supporters escaped from a camp for displaced people amid the fighting. Trump gave his administration the power to place "significant" sanctions< on Turkey, Mnuchin said on Fri. Trump had said last week he would "obliterate" Turkey's economy, if necessary, after his decision to withdraw troops from Syria.
Fresh concerns that UK & European leaders may not reach a deal by Oct 31 weighed anew on the £, yanking it down from a 3-month high seen late last week. The £ slumped to $1.2573 against the $, a drop of 0.6% on the session so far. Sterling saw its best 2-day run in over a decade late last week. On Fri, it reached a high of $1.2706, its strongest since Theresa May was prime minister before Boris Johnson took over in Jul. The gloom returned for sterling amid reports that EU & British negotiators, who were working over the weekend to reach a deal before the Oct 31 deadline, hadn't made a breakthrough as last night. Given how divided the 2 sides are, even a deal outline looked tough, said diplomats. The £ rose Fri after European Council Pres Donald Tusk said he had received promising signals from Ireland's Leo Varadkar that a deal was possible. Attempts to reach a deal have run into difficulties over plans for keeping an open border between EU member Ireland & the UK'’s Northern Ireland. Even if UK negotiators reach an agreement with Europe, any deal could still see resistance in the UK Parliament.
Pound pulls back from three-month highs as hopes dim over Brexit agreement
These are tense times on the intl scene. The concept of "first phase" on the Chinia deal makes investors nervous. Then there is the growing drama with Turkey. The Brexit story has returned to unclear. Some may have forgotten, but earnings season is beginning with the big banks coming in the next few days. Later in the month the FOMC meets & investors are expecting a rate cut. The first estimate for Q3 GDP data will be reported & that is not expected to be spectacular. Nervous investors are buying gold & Treasuries.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 53.06 | -1.64 | -3.0% |
| GC=F | Gold | 1 ,494.70 | +6.00 | +0.4% |
Stocks traded flat after Beijing said the US & China still have some work to do before finalizing their "phase one" trade agreement. “While the negotiations do appear to have produced a fundamental understanding on the key issues and the broader benefits of friendly relations, the Champagne should probably be kept on ice, at least until the two presidents put pen to paper,” wrote the state-owned China Daily. China wants further talks, as soon as the end of Oct, in order to hammer out the final details before Chinese Pres Xi Jinping agrees to sign it. But Hu Xijin, the editor in chief of China's state-run Global Times, said things are moving in the right direction. "Based on what I know, China-US trade talks made breakthrough last week and the two sides have the strong will to reach a final deal. Initial statement of the Chinese side is moderate," he tweeted today. "This is China's habit. It doesn't mean China's real attitude is not positive." Trade negotiators from the US & China on Fri agreed to a deal in principle that is expected to take 3-5 weeks to complete. As part of the deal, China agreed to increase its purchases of US agricultural products & Boeing (BA & a Dow stock) aircraft, in addition to making reforms on intellectual property and financial services. The US has agreed to not raise tariffs from 25% to 30% tomorrow. A decision has not yet been made on the tariff increase scheduled for Dec 15. All 3 of the major averages opened lower. Overnight, China reported exports to the US fell 17.8% in Sep from a year earlier to $36.5B. Imports of American goods sank 20.6% to $10.6B. In Asian markets, China's Shanghai Composite gained 1.2% & Hong Kong's Hang Seng finished higher by 0.8%. Markets in Japan were closed for a holiday. In Europe, all of the major averages were lower, with France's CAC down 1% to pace the decline.
Stocks cautious as China casts doubt on Trump's 'phase one' deal
The US & China still have some work to do before finalizing their “phase one” trade deal.
Beijing wants to send Vice Premier Liu He, China's top trade negotiator, will come to DC as soon as the end of Oct to finalize a deal that can be signed next month at the Asia-Pacific Economic Cooperation conference next month in Chile. “While the negotiations do appear to have produced a fundamental understanding on the key issues and the broader benefits of friendly relations, the Champagne should probably be kept on ice, at least until the two presidents put pen to paper,” wrote the state-owned China Daily. The “phase one” agreement came days before customs data released today by Beijing showed Chinese exports to the US fell 17.8% to $36.5B in Sep, evidence the trade war is taking a toll on the world's 2nd-largest economy. The US is the biggest buyer of Chinese goods. Trade negotiators from the US & China on Fri agreed to a deal in principle that is expected to take 3-5 weeks to complete. Trump touted the agreement as a big win for US industrial companies & farmers.
China warns to keep 'champagne' on ice after 'phase one' trade deal
Treasury Secretary Steve Mnuchin said that sanctions against Turkey are ready & that he is waiting for a decision from Pres Trump following the nation's encroachment into northern Syria after US troops withdrew. Trump will be briefed on sanctioning Turkey today, Mnuchin told reporters. "As I've said, the sanctions are ready to go," he said. "We'll be updating the president this morning, and then when he makes the decision, we'll activate." "This is an evolving situation," Mnuchin said. "We're monitoring the situation carefully." Trump said yesterday that he & members of Congress are working to punish Turkey economically. "Dealing with [Sen. Lindsey Graham] and many members of Congress, including Democrats, about imposing powerful Sanctions on Turkey," Trump tweeted. "Treasury is ready to go, additional legislation may be sought. There is great consensus on this. Turkey has asked that it not be done. Stay tuned!" The UN says at least 130K have been displaced by the fighting in northeastern Syria. The Kurdish-led administration in northern Syria said in a statement that 950 ISIS supporters escaped from a camp for displaced people amid the fighting. Trump gave his administration the power to place "significant" sanctions< on Turkey, Mnuchin said on Fri. Trump had said last week he would "obliterate" Turkey's economy, if necessary, after his decision to withdraw troops from Syria.
Mnuchin says Trump could drop the hammer on Turkey at any moment
Fresh concerns that UK & European leaders may not reach a deal by Oct 31 weighed anew on the £, yanking it down from a 3-month high seen late last week. The £ slumped to $1.2573 against the $, a drop of 0.6% on the session so far. Sterling saw its best 2-day run in over a decade late last week. On Fri, it reached a high of $1.2706, its strongest since Theresa May was prime minister before Boris Johnson took over in Jul. The gloom returned for sterling amid reports that EU & British negotiators, who were working over the weekend to reach a deal before the Oct 31 deadline, hadn't made a breakthrough as last night. Given how divided the 2 sides are, even a deal outline looked tough, said diplomats. The £ rose Fri after European Council Pres Donald Tusk said he had received promising signals from Ireland's Leo Varadkar that a deal was possible. Attempts to reach a deal have run into difficulties over plans for keeping an open border between EU member Ireland & the UK'’s Northern Ireland. Even if UK negotiators reach an agreement with Europe, any deal could still see resistance in the UK Parliament.
Pound pulls back from three-month highs as hopes dim over Brexit agreement
These are tense times on the intl scene. The concept of "first phase" on the Chinia deal makes investors nervous. Then there is the growing drama with Turkey. The Brexit story has returned to unclear. Some may have forgotten, but earnings season is beginning with the big banks coming in the next few days. Later in the month the FOMC meets & investors are expecting a rate cut. The first estimate for Q3 GDP data will be reported & that is not expected to be spectacular. Nervous investors are buying gold & Treasuries.
Dow Jones Industrials
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