Dow rose 115, advancers over decliners 3-2 & MLP gained 43. The MLP index fluctuated in the 203s & the REIT index added 1 to 403. Junk bond funds inched higher & Treasuries drifted lower as stocks were bid higher. Oil went up in the 57s & gold lost 4 to 1469 (more below).
AMJ (Alerian MLP Index tracking fund)
Stocks opened higher at record highs after White House officials said the US & China are getting closer to a phase one trade deal. "The important thing is to make sure that the deal is what we think it is," Commerce Secretary Wilbur Ross said. He says there is a "very high probability" of a deal, but cautioned "the devil is always in the details." Trump’s economic adviser, Larry Kudlow, likewise reportedly said yesterday the 2 sides were close to a deal. Commodities were mixed with gold down 0.5% at $1466 an ounce & West Texas Intermediate crude oil up 0.2% at $57 a barrel. Meanwhile, Treasuries were lower with selling pushing the yield on the 10-year note up 2 basis points to 1.835%. In Asian markets, Japan's Nikkei rose 0.7%, Hong Kong's Hang Seng was little changed, while the Shanghai Composite lost 0.6%. Hong Kong confirmed last Fri it plunged into recession for the first time in a decade following months of anti-gov protests & the US-China trade war. Q3 figures showed the economy shrank by 3.2% from the preceding period, the 2nd straight qtr of contraction, meeting the technical definition of a recession. In Europe, London's FTSE was down 0.2%, Germany's DAX was up 0.3% & France's CAC gained 0.4%.
Wilbur Ross says it's time for House Speaker Nancy Pelosi to bring the US-Mexico-Canada Agreement to a vote. “I think there’s no question that if she puts it on the floor it will be overwhelmingly voted – when or if she is willing to put it on the floor,” Commerce Secretary Wilbur Ross said. He added that passing USMCA would be the “singular accomplishment of this Congress.” Ross said USMCA is “much better” on key issues than any trade deal in the history of the country, & that the delay has “cost the economy billions of dollars.” The USMCA, which overhauls the Clinton-era North American Free Trade Agreement, commonly known as NAFTA, requires 75% of automobile components be manufactured in the US, Canada & Mexico in order to avoid tariffs, & that 40-45% of automobile parts be made by workers who earn at least $16 an hour by 2023. The commerce secretary’s comments come after Pelosi told reporters yesterday that she'd “like to see” the trade deal get done this year so long as the issue of minimum wage enforcement is solved. Time is running out for Congress to pass the trade deal before the end of the year. Only 14 days are left in the Congressional session, & election-year politics might complicate its passage in 2020. “It’s time to get serious,” Ross concluded. “It’s time to pay attention to something that really helps everyday Americans instead of having these silly hearings,” he added, referring to a Congressional impeachment inquiry.
US retail sales rebounded in Oct, but consumers cut back on purchases of big-ticket household items & clothing, which could temper expectations for a strong holiday shopping season. The Commerce Dept said retail sales increased 0.3% last month, lifted by motor vehicle purchases & higher gasoline prices, reversing Sep's unrevised 0.3% drop, which was the first decline in 7 months The forecast retail sales gaining 0.2% in Oct. Compared to Oct last year, retail sales advanced 3.1%. Excluding automobiles, gasoline, building materials & food services, retail sales increased 0.3% last month. Data for Sep was revised lower to show the core retail sales slipping 0.1% of being unchanged as previously reported. Core retail sales correspond most closely with the consumer spending component of GDP. The rebound in core retail sales added to reports this week showing firming inflation in supporting the Federal Reserve's signal that it will probably not cut interest rates again in the near term. Other reports this month have shown solid job growth in Oct & an acceleration in services sector activity. The data & easing trade tensions between DC & Beijing have diminished financial market fears of a recession. Fed Chair Jerome Powell told lawmakers yesterday that “the U.S. economy is the star economy these days,” compared to other advanced economies and “there’s no reason that can’t continue.” Consumer spending, which accounts for more than 2/3 of the economy, increased at a 2.9% annualized rate in Q3. The economy’s engine is being powered by the lowest unemployment rate in nearly 50 years & has helped to blunt the hit on the economy from the White House's 16-month trade war with China, which had led to a decline in capital expenditure & a recession in manufacturing. Auto sales increased 0.5% in Oct after declining 1.3% in Sep. Receipts at service stations surged 1.1%, reflecting higher gasoline prices, after dipping 0.1% in the prior month. Online & mail-order retail sales increased 0.9% after gaining 0.2% in Sep.
US retail sales rebound, but big-ticket purchases drop
Gold futures traded lower, paring their gain for the week, after upbeat comments on the outlook for a “phase one” trade deal between the US & China robbed the metal of its haven appeal. Gold for Dec delivery was off $5.80 (0.4%) at $1467 an ounce, with prices for the most-active contract trading 0.3% higher for the week. Analysts tied the weakness to remarks by White House economic adviser Larry Kudlow late yesterday, which stoked optimism for a deal without providing much in the way of 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 at a Council on Foreign Relations event. Optimism over a phase one agreement between the US & China has waxed & waned over the past week. Expectations for a quick signing of the partial agreement have cooled following news reports that have pointed to snags between US & Chinese negotiators. These reportedly include a reluctance by China to commit to a numerical threshold for purchases of US farm products & a debate over whether existing US tariffs on Chinese imports should be rolled back as part of the agreement. Meanwhile, strength in the US stock market, with 3 benchmark stock indices at records following a rise in Oct domestic retail sales, dulling demand for gold.
The White House is optimistic about a phase 1 of a trade deal coming soon. Stocks are meandering with the bias coming from the bull's message. The Dow is less than 100 from the 28K level & market sentiment could take over that ceiling later today.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 57.00 | +0.23 | +0.4% |
| GC=F | Gold | 1,467.30 | -6.10 | -0.4% |
Stocks opened higher at record highs after White House officials said the US & China are getting closer to a phase one trade deal. "The important thing is to make sure that the deal is what we think it is," Commerce Secretary Wilbur Ross said. He says there is a "very high probability" of a deal, but cautioned "the devil is always in the details." Trump’s economic adviser, Larry Kudlow, likewise reportedly said yesterday the 2 sides were close to a deal. Commodities were mixed with gold down 0.5% at $1466 an ounce & West Texas Intermediate crude oil up 0.2% at $57 a barrel. Meanwhile, Treasuries were lower with selling pushing the yield on the 10-year note up 2 basis points to 1.835%. In Asian markets, Japan's Nikkei rose 0.7%, Hong Kong's Hang Seng was little changed, while the Shanghai Composite lost 0.6%. Hong Kong confirmed last Fri it plunged into recession for the first time in a decade following months of anti-gov protests & the US-China trade war. Q3 figures showed the economy shrank by 3.2% from the preceding period, the 2nd straight qtr of contraction, meeting the technical definition of a recession. In Europe, London's FTSE was down 0.2%, Germany's DAX was up 0.3% & France's CAC gained 0.4%.
Stocks surge to all-time highs as White House teases China breakthrough
Wilbur Ross says it's time for House Speaker Nancy Pelosi to bring the US-Mexico-Canada Agreement to a vote. “I think there’s no question that if she puts it on the floor it will be overwhelmingly voted – when or if she is willing to put it on the floor,” Commerce Secretary Wilbur Ross said. He added that passing USMCA would be the “singular accomplishment of this Congress.” Ross said USMCA is “much better” on key issues than any trade deal in the history of the country, & that the delay has “cost the economy billions of dollars.” The USMCA, which overhauls the Clinton-era North American Free Trade Agreement, commonly known as NAFTA, requires 75% of automobile components be manufactured in the US, Canada & Mexico in order to avoid tariffs, & that 40-45% of automobile parts be made by workers who earn at least $16 an hour by 2023. The commerce secretary’s comments come after Pelosi told reporters yesterday that she'd “like to see” the trade deal get done this year so long as the issue of minimum wage enforcement is solved. Time is running out for Congress to pass the trade deal before the end of the year. Only 14 days are left in the Congressional session, & election-year politics might complicate its passage in 2020. “It’s time to get serious,” Ross concluded. “It’s time to pay attention to something that really helps everyday Americans instead of having these silly hearings,” he added, referring to a Congressional impeachment inquiry.
Democrats delaying USMCA 'cost the economy billions': Wilbur Ross
US retail sales rebounded in Oct, but consumers cut back on purchases of big-ticket household items & clothing, which could temper expectations for a strong holiday shopping season. The Commerce Dept said retail sales increased 0.3% last month, lifted by motor vehicle purchases & higher gasoline prices, reversing Sep's unrevised 0.3% drop, which was the first decline in 7 months The forecast retail sales gaining 0.2% in Oct. Compared to Oct last year, retail sales advanced 3.1%. Excluding automobiles, gasoline, building materials & food services, retail sales increased 0.3% last month. Data for Sep was revised lower to show the core retail sales slipping 0.1% of being unchanged as previously reported. Core retail sales correspond most closely with the consumer spending component of GDP. The rebound in core retail sales added to reports this week showing firming inflation in supporting the Federal Reserve's signal that it will probably not cut interest rates again in the near term. Other reports this month have shown solid job growth in Oct & an acceleration in services sector activity. The data & easing trade tensions between DC & Beijing have diminished financial market fears of a recession. Fed Chair Jerome Powell told lawmakers yesterday that “the U.S. economy is the star economy these days,” compared to other advanced economies and “there’s no reason that can’t continue.” Consumer spending, which accounts for more than 2/3 of the economy, increased at a 2.9% annualized rate in Q3. The economy’s engine is being powered by the lowest unemployment rate in nearly 50 years & has helped to blunt the hit on the economy from the White House's 16-month trade war with China, which had led to a decline in capital expenditure & a recession in manufacturing. Auto sales increased 0.5% in Oct after declining 1.3% in Sep. Receipts at service stations surged 1.1%, reflecting higher gasoline prices, after dipping 0.1% in the prior month. Online & mail-order retail sales increased 0.9% after gaining 0.2% in Sep.
US retail sales rebound, but big-ticket purchases drop
Gold futures traded lower, paring their gain for the week, after upbeat comments on the outlook for a “phase one” trade deal between the US & China robbed the metal of its haven appeal. Gold for Dec delivery was off $5.80 (0.4%) at $1467 an ounce, with prices for the most-active contract trading 0.3% higher for the week. Analysts tied the weakness to remarks by White House economic adviser Larry Kudlow late yesterday, which stoked optimism for a deal without providing much in the way of 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 at a Council on Foreign Relations event. Optimism over a phase one agreement between the US & China has waxed & waned over the past week. Expectations for a quick signing of the partial agreement have cooled following news reports that have pointed to snags between US & Chinese negotiators. These reportedly include a reluctance by China to commit to a numerical threshold for purchases of US farm products & a debate over whether existing US tariffs on Chinese imports should be rolled back as part of the agreement. Meanwhile, strength in the US stock market, with 3 benchmark stock indices at records following a rise in Oct domestic retail sales, dulling demand for gold.
Gold edges lower as trade deal hopes dent haven appeal
The White House is optimistic about a phase 1 of a trade deal coming soon. Stocks are meandering with the bias coming from the bull's message. The Dow is less than 100 from the 28K level & market sentiment could take over that ceiling later today.
Dow Jones Industrials
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