Dow fell 20, advancers over decliners better than 3-2 & NAZ gave back 13. The MLP index slid fractionally lower to he 203s (yet another multi year low) & the REIT index went up 2+ to the 402s. Junk bond funds were little changed & Treasuries continued to be in demand. Oil climbed in the 57s & gold rose to 1466.
AMJ (Alerian MLP Index tracking fund)
Stocks opened lower as doubts remain about the status of a US-China trade deal. China's Commerce Ministry said canceling tariffs is an important condition for reaching a phase one trade agreement. Investors were wary after a report that Chinese negotiators were reluctant to commit to the size of purchases of US farm goods in an interim agreement aimed at ending a tariff war. White House trade adviser Peter Navarro said that the report is "rumor stuff" & added "someone is "making a lot of money moving the markets." The Dow & S&P 500 closed at record highs yesterday, the 100th record close for the S&P 500 under Pres Trump. Meanwhile, Federal Reserve Chair Jerome Powell heads to Capitol Hill for a 2nd day of testimony. Yesterday, he told the Senate Banking Committee that he expects the US economy to keep growing at a solid pace, but there are risks from slower global growth & trade tensions. Dow component Walmart (WMT), a Dividend Aristocrat, is providing a boost after the retail giant reported online sales surged 41% amid strength in groceries. The world's largest retailer raised its full-year adjusted EPS guidance ahead of the crucial holiday qtr. Commodities were higher with West Texas Intermediate up 0.7% at $57.62 a barrel & gold up 0.4% at $1470 an ounce. Treasuries were higher for a 3rd straight session. The yield on the 10-year note was down 3.8 basis points to 1.831% after finishing at 1.933% on Fri. China's gov reported yesterday that factory activity & spending weakened more than expected in Oct. Growth in industrial production slowed to 4.7% from Sep's 5.8% & retail sales growth weakened to a 6-month low of 7.2%. In Asia, the Shanghai Composite gained 0.2%, Tokyo's Nikkei 225 lost 0.8% & Hong Kong's Hang Seng fell 0.9%. In European trading, London's FTSE is down 0.4%, Germany's DAX is slipping by 0.5% & France's CAC is lower by 0.2%.
Hong Kong residents endured a 4th day of traffic snarls & mass transit disruptions as protesters closed some main roads & rail networks while police skirmished with militant students at major universities. Police said protesters shot several arrows at them near Hong Kong Polytechnic University. None of the officers were injured & arrows were seized at the scene, police said. Life in this city of 7.5M has been strained as thousands of commuters have been unable to get to work or endured lengthy commutes. The gov appealed for employers to show flexibility. “For staff who cannot report for duty on time on account of conditions in road traffic or public transport services, employers should give due consideration to the circumstances,” a statement said. A business & high-end retail district in the center of the city was once again taken over by protesters at lunchtime, as it has been every day since Mon. Office workers watched from the sidewalks & overpasses as protesters littered the streets with bricks & other items to block traffic & police. At one point, a group of police swooped in & kicked the bricks to the curb along one major thoroughfare, but the standoff continued. Anti-gov protests have disrupted Hong Kong, & divided its people for more than 5 months.
China is still calling for the US to roll back tariffs as part of any “phase one” agreement, as trade negotiations between the 2 largest economies drag on. “The trade war was begun with adding tariffs, & should be ended by canceling these additional tariffs. This is an important condition for both sides to reach an agreement,” China's Ministry of Commerce spokesperson Gao Feng said at a weekly press conference. “If both sides reach a phase one agreement, the level of tariff rollback will fully reflect the importance of the phase one agreement,” Gao said, noting the 2 countries' trade delegations are in deep consultations on this topic. Trade tensions between the US & China have persisted for well over a year, with each country levying tariffs on Bs of $s worth of goods from the other. Now, both countries are in the process of sealing what’s been called a “phase one” deal to address some points of disagreement. Chinese Pres Xi Jinping & Pres Trump were expected to meet in mid-Nov at the Asia-Pacific Economic Cooperation summit in Santiago, but Chile canceled the event due to domestic unrest. In the meantime, data & anecdotal evidence indicate businesses from both countries have tried different ways to cope with the tariffs. For some companies in America, diverting production or the sourcing of imports is an option.
China says the trade war should be ended by removing tariffs
US weekly jobless claims rise to five-month high
Not much excitement in today's trading. Trade negotiations keep lumbering along & the US economic data remains fairly good. But Hong Kong remains a dark cloud overhanging US-Trade negotiations The Dow is about 250 away from reaching 28K, its next important ceiling to cross.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 57.55 | +0.43 | +0.8% |
| GC=F | Gold | 1,468.90 | +5.60 | +0.4% |
Stocks opened lower as doubts remain about the status of a US-China trade deal. China's Commerce Ministry said canceling tariffs is an important condition for reaching a phase one trade agreement. Investors were wary after a report that Chinese negotiators were reluctant to commit to the size of purchases of US farm goods in an interim agreement aimed at ending a tariff war. White House trade adviser Peter Navarro said that the report is "rumor stuff" & added "someone is "making a lot of money moving the markets." The Dow & S&P 500 closed at record highs yesterday, the 100th record close for the S&P 500 under Pres Trump. Meanwhile, Federal Reserve Chair Jerome Powell heads to Capitol Hill for a 2nd day of testimony. Yesterday, he told the Senate Banking Committee that he expects the US economy to keep growing at a solid pace, but there are risks from slower global growth & trade tensions. Dow component Walmart (WMT), a Dividend Aristocrat, is providing a boost after the retail giant reported online sales surged 41% amid strength in groceries. The world's largest retailer raised its full-year adjusted EPS guidance ahead of the crucial holiday qtr. Commodities were higher with West Texas Intermediate up 0.7% at $57.62 a barrel & gold up 0.4% at $1470 an ounce. Treasuries were higher for a 3rd straight session. The yield on the 10-year note was down 3.8 basis points to 1.831% after finishing at 1.933% on Fri. China's gov reported yesterday that factory activity & spending weakened more than expected in Oct. Growth in industrial production slowed to 4.7% from Sep's 5.8% & retail sales growth weakened to a 6-month low of 7.2%. In Asia, the Shanghai Composite gained 0.2%, Tokyo's Nikkei 225 lost 0.8% & Hong Kong's Hang Seng fell 0.9%. In European trading, London's FTSE is down 0.4%, Germany's DAX is slipping by 0.5% & France's CAC is lower by 0.2%.
Walmart supports Dow as trade concerns weigh
Hong Kong residents endured a 4th day of traffic snarls & mass transit disruptions as protesters closed some main roads & rail networks while police skirmished with militant students at major universities. Police said protesters shot several arrows at them near Hong Kong Polytechnic University. None of the officers were injured & arrows were seized at the scene, police said. Life in this city of 7.5M has been strained as thousands of commuters have been unable to get to work or endured lengthy commutes. The gov appealed for employers to show flexibility. “For staff who cannot report for duty on time on account of conditions in road traffic or public transport services, employers should give due consideration to the circumstances,” a statement said. A business & high-end retail district in the center of the city was once again taken over by protesters at lunchtime, as it has been every day since Mon. Office workers watched from the sidewalks & overpasses as protesters littered the streets with bricks & other items to block traffic & police. At one point, a group of police swooped in & kicked the bricks to the curb along one major thoroughfare, but the standoff continued. Anti-gov protests have disrupted Hong Kong, & divided its people for more than 5 months.
Hong Kong endures more transit disruptions, campus violence
China is still calling for the US to roll back tariffs as part of any “phase one” agreement, as trade negotiations between the 2 largest economies drag on. “The trade war was begun with adding tariffs, & should be ended by canceling these additional tariffs. This is an important condition for both sides to reach an agreement,” China's Ministry of Commerce spokesperson Gao Feng said at a weekly press conference. “If both sides reach a phase one agreement, the level of tariff rollback will fully reflect the importance of the phase one agreement,” Gao said, noting the 2 countries' trade delegations are in deep consultations on this topic. Trade tensions between the US & China have persisted for well over a year, with each country levying tariffs on Bs of $s worth of goods from the other. Now, both countries are in the process of sealing what’s been called a “phase one” deal to address some points of disagreement. Chinese Pres Xi Jinping & Pres Trump were expected to meet in mid-Nov at the Asia-Pacific Economic Cooperation summit in Santiago, but Chile canceled the event due to domestic unrest. In the meantime, data & anecdotal evidence indicate businesses from both countries have tried different ways to cope with the tariffs. For some companies in America, diverting production or the sourcing of imports is an option.
China says the trade war should be ended by removing tariffs
The number of Americans filing applications for
unemployment benefits rose to a 5-month high last week, but this
likely does not signal a shift in labor market conditions as claims for
several states were estimated because of the Mon holiday. Initial
claims for state unemployment benefits increased 14K to a seasonally
adjusted 225K last week, the highest reading since
Jun 22, the Labor Dept said. The forecast was for claims would rise to 215K. The 4-week moving average of initial claims, considered a better measure
of labor market trends as it irons out week-to-week volatility, rose
only 2K to 217K last week. Still, layoffs remain low even as the
pace of hiring has slowed from last year's brisk pace, keeping the labor
market on solid ground & reducing financial market fears of a
recession. Labor market strength, marked by the lowest
unemployment rate in nearly 50 years, is supporting consumer spending & helping to offset some of the hit on the economy from a 16-month
trade war between the US & China. Federal Reserve
Chair Jerome Powell told lawmakers yesterday that the labor market
had “benefited a wide range of individuals and communities.” The central bank last month cut rates for the 3rd time this year &
signaled a pause in the easing cycle that started in Jul when it
reduced borrowing costs for the first time since 2008. The
claims report also showed the number of people receiving benefits after
an initial week of aid fell 10K to 1.68M for the latest week. The continuing claims were in recent weeks
likely boosted by a 40-day strike by workers at General Motors (GM), which
caused temporary layoffs at auto parts suppliers. The 4-week moving average of continuing claims was unchanged at 1.69M.
US weekly jobless claims rise to five-month high
Not much excitement in today's trading. Trade negotiations keep lumbering along & the US economic data remains fairly good. But Hong Kong remains a dark cloud overhanging US-Trade negotiations The Dow is about 250 away from reaching 28K, its next important ceiling to cross.
Dow Jones Industrials
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