Dow shot up 222 to go over 28K, advancers over decliners better than 3-2 & NAZ went up 61. The MLP index gained 1+ to the 205s & the REIT index added 1+ to the 403s. Junk bond funds rose & Treasuries drifted lower in price. Oil soared 1 to the 57 (more below) & gold pulled back 5 to 1467.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Bolstered by the consumer, the economy is on track to see a solid year of growth in 2020, according to Dallas Federal Reserve Bank Pres Robert Kaplan. “[I] believe the most likely case is that we’ll grow in the neighborhood of 2 percent next year,” he said. Kaplan spoke to the improvement of household balance sheets& a tight labor market, but did note some signs of weakness. “Primarily due to trade uncertainties and weak global trade, global growth is weaker, manufacturing is weaker and business investment, as you’ve been talking about, is weaker,” he said. The “good news,” Kaplan addeid, is that manufacturing & business investment make up a smaller portion of GDP than consumption. He argued that there could be an issue if those weaknesses spread to consumers, but thinks, ultimately the US has a “good chance” to navigate its way thru these weaknesses to growth in 2020. In Q3-2019, domestic investment accounted for just over 17% of GDP, while consumption made up just over 68%. The weaknesses of domestic investment can largely be attributed to trade uncertainty, Kaplan suggested. “Because of trade uncertainty and, to some extent, because of the inability to find workers, in some cases [businesses] put cap-ex spending, by in large, on hold. They haven’t canceled projects, but they put them on hold for this year and a good part of next year,” he said. Kaplan thinks the better investment is possible but still expects it to remain “sluggish” next year. He argued stabilization in trade is important in order to increase investment & so the volume of global trade is an important indicator to watch, he added. “Forty-five percent of S&P 500 revenues come from outside the United States,” he noted. “While we're sensitive to trade in the United States, it’s over 40 percent of German GDP, for example. And so I think that’s still probably the number one issue for business,” Kaplan said. The World Bank's most recent data indicated that the total value of US trade was equal to 27% of GDP. Net exports, however, only account for a 3% drag on GDP, according to the most recent Federal Reserve numbers.
The US economy will barely grow at all in Q4, if 2 Federal Reserve gauges that track GDP are correct. With some recent data coming in below expectations, both the Atlanta & NY Fed's trackers have lowered their expectations for the last 3 months of 2019. According to the Atlanta Fed's GDPNow, growth is likely to come in at just 0.3% & the NY Fed's GDP Nowcast is showing a gain of 0.4%. Both projections have come on the heels of recent news that took down previously meager expectations to just above negative territory. Today releases indicating lackluster retail sales & production growth took the Atlanta tracker down from 1% a week ago & the NY measure from 0.7% earlier this week & as high as 2% back in Sep. Economic data has largely remained a bit better than expectations but has dipped lately compared with other estimates. The Citi Economic Surprise Index, which compares actual readings to consensus estimates, is still positive but at its lowest level since early Sep.
Economic growth is close to zero for the fourth quarter, according to Fed gauges
Oil futures climbed to tally a gain for the week, with optimism over phase one of a potential US-China trade deal lifting prospects for energy demand, even as traders weigh a conflicting outlook for crude supplies . A 4th straight weekly decline in the number of active US rigs drilling for oil was also supportive. Baker Hughes reported that the number of active US rigs drilling for oil fell by 10 to 674 this week. US benchmark West Texas Intermediate crude for Dec delivery rose 95¢ (1.7%) to settle at $57.72 a barrel, with front-month contract prices ending around 0.8% higher for the week. Jan Brent crude added $1.02 (1.6%) to $63.30 a barrel. The global benchmark scored a 1.3% weekly climb. Both crude benchmarks tallied a 2nd weekly gain in a row. Developments tied to US-China trade talks have been a key focus for the oil market. Yesterday, White House economic adviser Larry Kudlow offered a largely upbeat assessment of talks, albeit with little detail. Kudlow said negotiators are getting close to an agreement, but that Pres Trump wasn't yet ready to sign off. Trump “likes what he sees, he’s not ready to make a commitment, he hasn’t signed off on a commitment for phase one, we heave no agreement just yet for phase one,” he said. Meanwhile, prices for oil had weakened early today around the time the Paris-based Intl Energy Agency (IEA), in its monthly report, raised its forecast for oil output growth for countries outside OPEC. The IEA said it expects non-OPEC supply growth to rise to 2.M barrels a day next year, up from its previous estimate of 2.2M barrels a day, with it set to continue leading the way. That IEA report came a day after the Energy Information Administration reported a 2.2M-barrel rise in US crude supplies last week & a weekly increase of 200K barrels a day to a record 12.8M barrels a day in domestic crude production. OPEC in its monthly report on yesterday, lowered slightly its own non-OPEC output growth forecast.
Stocks began the day higher on US-China trade optimism & that sentiment continued throughout the day. Buying into the close, took the Dow over 28K, making the bulls very happy. They will be looking to take stocks even higher on Mon.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Bolstered by the consumer, the economy is on track to see a solid year of growth in 2020, according to Dallas Federal Reserve Bank Pres Robert Kaplan. “[I] believe the most likely case is that we’ll grow in the neighborhood of 2 percent next year,” he said. Kaplan spoke to the improvement of household balance sheets& a tight labor market, but did note some signs of weakness. “Primarily due to trade uncertainties and weak global trade, global growth is weaker, manufacturing is weaker and business investment, as you’ve been talking about, is weaker,” he said. The “good news,” Kaplan addeid, is that manufacturing & business investment make up a smaller portion of GDP than consumption. He argued that there could be an issue if those weaknesses spread to consumers, but thinks, ultimately the US has a “good chance” to navigate its way thru these weaknesses to growth in 2020. In Q3-2019, domestic investment accounted for just over 17% of GDP, while consumption made up just over 68%. The weaknesses of domestic investment can largely be attributed to trade uncertainty, Kaplan suggested. “Because of trade uncertainty and, to some extent, because of the inability to find workers, in some cases [businesses] put cap-ex spending, by in large, on hold. They haven’t canceled projects, but they put them on hold for this year and a good part of next year,” he said. Kaplan thinks the better investment is possible but still expects it to remain “sluggish” next year. He argued stabilization in trade is important in order to increase investment & so the volume of global trade is an important indicator to watch, he added. “Forty-five percent of S&P 500 revenues come from outside the United States,” he noted. “While we're sensitive to trade in the United States, it’s over 40 percent of German GDP, for example. And so I think that’s still probably the number one issue for business,” Kaplan said. The World Bank's most recent data indicated that the total value of US trade was equal to 27% of GDP. Net exports, however, only account for a 3% drag on GDP, according to the most recent Federal Reserve numbers.
Fed's Kaplan: Strong consumer can assist 'solid year of growth' in 2020
The US economy will barely grow at all in Q4, if 2 Federal Reserve gauges that track GDP are correct. With some recent data coming in below expectations, both the Atlanta & NY Fed's trackers have lowered their expectations for the last 3 months of 2019. According to the Atlanta Fed's GDPNow, growth is likely to come in at just 0.3% & the NY Fed's GDP Nowcast is showing a gain of 0.4%. Both projections have come on the heels of recent news that took down previously meager expectations to just above negative territory. Today releases indicating lackluster retail sales & production growth took the Atlanta tracker down from 1% a week ago & the NY measure from 0.7% earlier this week & as high as 2% back in Sep. Economic data has largely remained a bit better than expectations but has dipped lately compared with other estimates. The Citi Economic Surprise Index, which compares actual readings to consensus estimates, is still positive but at its lowest level since early Sep.
Economic growth is close to zero for the fourth quarter, according to Fed gauges
Oil futures climbed to tally a gain for the week, with optimism over phase one of a potential US-China trade deal lifting prospects for energy demand, even as traders weigh a conflicting outlook for crude supplies . A 4th straight weekly decline in the number of active US rigs drilling for oil was also supportive. Baker Hughes reported that the number of active US rigs drilling for oil fell by 10 to 674 this week. US benchmark West Texas Intermediate crude for Dec delivery rose 95¢ (1.7%) to settle at $57.72 a barrel, with front-month contract prices ending around 0.8% higher for the week. Jan Brent crude added $1.02 (1.6%) to $63.30 a barrel. The global benchmark scored a 1.3% weekly climb. Both crude benchmarks tallied a 2nd weekly gain in a row. Developments tied to US-China trade talks have been a key focus for the oil market. Yesterday, White House economic adviser Larry Kudlow offered a largely upbeat assessment of talks, albeit with little detail. Kudlow said negotiators are getting close to an agreement, but that Pres Trump wasn't yet ready to sign off. Trump “likes what he sees, he’s not ready to make a commitment, he hasn’t signed off on a commitment for phase one, we heave no agreement just yet for phase one,” he said. Meanwhile, prices for oil had weakened early today around the time the Paris-based Intl Energy Agency (IEA), in its monthly report, raised its forecast for oil output growth for countries outside OPEC. The IEA said it expects non-OPEC supply growth to rise to 2.M barrels a day next year, up from its previous estimate of 2.2M barrels a day, with it set to continue leading the way. That IEA report came a day after the Energy Information Administration reported a 2.2M-barrel rise in US crude supplies last week & a weekly increase of 200K barrels a day to a record 12.8M barrels a day in domestic crude production. OPEC in its monthly report on yesterday, lowered slightly its own non-OPEC output growth forecast.
Oil moves up on trade deal optimism to settle higher for the week
Stocks began the day higher on US-China trade optimism & that sentiment continued throughout the day. Buying into the close, took the Dow over 28K, making the bulls very happy. They will be looking to take stocks even higher on Mon.
Dow Jones Industrials
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