Dow shot up 237, advancers over decliners a relatively modest 4-3 & NAZ advanced 62. The MLP index sank another 3+ to the 209s, another 10 year low & the REIT index dropped 3+ to the 399s. Junk bond funds crawled higher & Treasuries were sold bringing higher yields (with the 1 year Treasury up 8 basis points to 1.9%). Oil rose to 57 on hopes from production cuts by Saudi Arabia & gold dropped 10 to 1482.
AMJ (Alerian MLP Index tracking fund)
Stocks climbed to record highs after China said the US has agreed to roll back tariffs in the event a phase one trade deal is reached. "In the past two weeks, lead negotiators have had serious and constructive discussions on resolving issues of core concern," the Chinese Ministry said. "Both sides agreed to remove the additional tariffs imposed in phases as progress is made on the agreement. If China and the US reach a phase one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously." The amount of tariff relief will depend on the content of the "phase one" agreement. The Dow gained almost 200 (0.7%) during the first 30 mins of trading while NAZ was 0.5% & the major averages were trading in record territory. US economic data was light, with initial jobless claims coming in at 211K, below the 215K estimate. Traders dumped Treasuries, running the yield on the 10-year note up nearly 8 basis points to 1.891%. Commodities were mixed, with gold down 0.5% at $1486 an ounce & West Texas Intermediate crude oil up 1.83% at $57.38 a barrel. In European, Germany's DAX gained 0.7% to lead the gains. In Asian market trading, the Shanghai Composite was unchanged, Tokyo's Nikkei edged up pennies & Hong Kong's Hang Seng rose 0.6%.
VP Mike Pence on the eve of flying to New Hampshire to file the paperwork for him & Pres Trump to be put on the ballot for the state's Feb 11th primary & reminded voters about the strength of the US. "A million new jobs created, wages rising at the fastest pace in 10 years, lowest unemployment in 50 years, lowest unemployment ever for African Americans and Hispanic Americans. This economy is booming," the VP said. The US economy grew nearly 2% last qtr, powered largely by the continued strength of consumer spending, which grew solidly by 2.9%. From the country's growth to the stock market record highs on Tues by the Dow & NAZ, Pence said: "it is all the result of the vision, the determination, the resilience of a president who gets up every day and fights to keep the promises he made to the American people."
Ahead of the next meeting of OPEC in Dec, the group’s largest producer, Saudi Arabia, may be cracking down on other members to fall in line with production cuts. Saudi Arabia, as OPEC's biggest exporter, has been called the organization's "first among equals" by the Council of Foreign Relations, is hoping to keep oil prices high ahead of the highly-anticipated state-owned Aramco IPO, people familiar with the matter said. To do so, it is pressuring countries that have not complied with production cuts to fall in line. In Jul, the group agreed to extend crude oil production cuts for nine months. Restricting supply is aimed at lifting prices. Nigeria is reportedly on board to convince members in Africa to comply. Iran's Minister of Petroleum also seems to be in agreement with the plan. “There are discussions regarding more reductions to the group’s oil output which will be considered in the upcoming meeting,” Bijan Zanganeh said. As Saudi Arabia seeks to diversify its economy by reducing its reliance on oil revenue, it will transfer 5% of state-owned Saudi Aramco to its Public Investment Fund (PIF) thru its IPO which is expected to be the largest in history. The IPO is slated for Dec possibly following the OPEC meeting in Vienna on Dec 5. The country has been pressed by falling oil prices throughout recent years, which plummeted in 2014. Higher oil prices would boost the valuation of the Aramco IPO. It was reported that Aramco's growth assumptions and dividend promises are pegged to oil prices around $65 per barrel. Prices have faltered throughout recent months amid rising production competition from the US
China's Commerce Ministry said that Beijing had agreed with the US to lift existing trade tariffs between the 2 nations in phases. Gao Feng, a spokesperson for China's Commerce Ministry, said that both sides had agreed to simultaneously cancel some existing tariffs on one another's goods, according to the country's state broadcaster. The ministry spokesperson said that both sides were closer to a phase one trade agreement after constructive negotiations over the past 2 weeks. One important condition for a limited trade agreement, Feng insisted, was that the US & China must remove the same number of charges at the same time. Fresh hopes for a phase one trade accord prompted US stock index futures to rally. Market participants had expected the 2 economic giants to sign a deal later this month, after both DC & Beijing spoke of progress in talks late last week. However, it was reported that a meeting between Pres & Chinese Pres Xi Jinping could be postponed until Dec — delaying a chance for the 2 leaders to sign an interim trade deal. The world's 2 largest economies have imposed tariffs on Bs of $s worth of each other's goods since the start of 2018, battering financial markets & souring business & consumer sentiment. The Trump administration has been putting increasing pressure on Beijing to curb massive subsidies to state-owned companies & stop the forced transfer of American technology to Chinese firms. But, analysts are skeptical that a phase one trade deal will effectively tackle these issues, suggesting the 2 economic powers will need a more comprehensive agreement before market sentiment can be boosted sustainably.
China says it has agreed with the US to cancel existing trade tariffs in phases
Stocks are rocketing ahead on the latest helpful news about US-China trade. However market breadth is modest. The Dow has a spectacular rise since the end of May, up 3K (12%) & it's approaching 28K. By another measure, it's up almost 10K since the 2016 election. The bulls remain optimistic about its future!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 57.44 | +1.09 | +1.9% |
| GC=F | Gold | 1,485.30 | -7.80 | -0.5% |
Stocks climbed to record highs after China said the US has agreed to roll back tariffs in the event a phase one trade deal is reached. "In the past two weeks, lead negotiators have had serious and constructive discussions on resolving issues of core concern," the Chinese Ministry said. "Both sides agreed to remove the additional tariffs imposed in phases as progress is made on the agreement. If China and the US reach a phase one deal, both sides should roll back existing additional tariffs in the same proportion simultaneously." The amount of tariff relief will depend on the content of the "phase one" agreement. The Dow gained almost 200 (0.7%) during the first 30 mins of trading while NAZ was 0.5% & the major averages were trading in record territory. US economic data was light, with initial jobless claims coming in at 211K, below the 215K estimate. Traders dumped Treasuries, running the yield on the 10-year note up nearly 8 basis points to 1.891%. Commodities were mixed, with gold down 0.5% at $1486 an ounce & West Texas Intermediate crude oil up 1.83% at $57.38 a barrel. In European, Germany's DAX gained 0.7% to lead the gains. In Asian market trading, the Shanghai Composite was unchanged, Tokyo's Nikkei edged up pennies & Hong Kong's Hang Seng rose 0.6%.
Dow, S&P 500, Nasdaq hit all-time highs
VP Mike Pence on the eve of flying to New Hampshire to file the paperwork for him & Pres Trump to be put on the ballot for the state's Feb 11th primary & reminded voters about the strength of the US. "A million new jobs created, wages rising at the fastest pace in 10 years, lowest unemployment in 50 years, lowest unemployment ever for African Americans and Hispanic Americans. This economy is booming," the VP said. The US economy grew nearly 2% last qtr, powered largely by the continued strength of consumer spending, which grew solidly by 2.9%. From the country's growth to the stock market record highs on Tues by the Dow & NAZ, Pence said: "it is all the result of the vision, the determination, the resilience of a president who gets up every day and fights to keep the promises he made to the American people."
Pence says Trump 'fights' to 'keep promises' for strong economy
Ahead of the next meeting of OPEC in Dec, the group’s largest producer, Saudi Arabia, may be cracking down on other members to fall in line with production cuts. Saudi Arabia, as OPEC's biggest exporter, has been called the organization's "first among equals" by the Council of Foreign Relations, is hoping to keep oil prices high ahead of the highly-anticipated state-owned Aramco IPO, people familiar with the matter said. To do so, it is pressuring countries that have not complied with production cuts to fall in line. In Jul, the group agreed to extend crude oil production cuts for nine months. Restricting supply is aimed at lifting prices. Nigeria is reportedly on board to convince members in Africa to comply. Iran's Minister of Petroleum also seems to be in agreement with the plan. “There are discussions regarding more reductions to the group’s oil output which will be considered in the upcoming meeting,” Bijan Zanganeh said. As Saudi Arabia seeks to diversify its economy by reducing its reliance on oil revenue, it will transfer 5% of state-owned Saudi Aramco to its Public Investment Fund (PIF) thru its IPO which is expected to be the largest in history. The IPO is slated for Dec possibly following the OPEC meeting in Vienna on Dec 5. The country has been pressed by falling oil prices throughout recent years, which plummeted in 2014. Higher oil prices would boost the valuation of the Aramco IPO. It was reported that Aramco's growth assumptions and dividend promises are pegged to oil prices around $65 per barrel. Prices have faltered throughout recent months amid rising production competition from the US
Saudi Arabia to press for higher oil prices ahead of Aramco IPO
China's Commerce Ministry said that Beijing had agreed with the US to lift existing trade tariffs between the 2 nations in phases. Gao Feng, a spokesperson for China's Commerce Ministry, said that both sides had agreed to simultaneously cancel some existing tariffs on one another's goods, according to the country's state broadcaster. The ministry spokesperson said that both sides were closer to a phase one trade agreement after constructive negotiations over the past 2 weeks. One important condition for a limited trade agreement, Feng insisted, was that the US & China must remove the same number of charges at the same time. Fresh hopes for a phase one trade accord prompted US stock index futures to rally. Market participants had expected the 2 economic giants to sign a deal later this month, after both DC & Beijing spoke of progress in talks late last week. However, it was reported that a meeting between Pres & Chinese Pres Xi Jinping could be postponed until Dec — delaying a chance for the 2 leaders to sign an interim trade deal. The world's 2 largest economies have imposed tariffs on Bs of $s worth of each other's goods since the start of 2018, battering financial markets & souring business & consumer sentiment. The Trump administration has been putting increasing pressure on Beijing to curb massive subsidies to state-owned companies & stop the forced transfer of American technology to Chinese firms. But, analysts are skeptical that a phase one trade deal will effectively tackle these issues, suggesting the 2 economic powers will need a more comprehensive agreement before market sentiment can be boosted sustainably.
China says it has agreed with the US to cancel existing trade tariffs in phases
Stocks are rocketing ahead on the latest helpful news about US-China trade. However market breadth is modest. The Dow has a spectacular rise since the end of May, up 3K (12%) & it's approaching 28K. By another measure, it's up almost 10K since the 2016 election. The bulls remain optimistic about its future!
Dow Jones Industrials
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