Dow dropped 68, decliners barely ahead of advancers & NAZ rose 13. The MLP index continued falling, down 1+ to the 199s, & the REIT index crawled higher in the 406s. Junk bond funds drifted lower & Treasuries inched higher. Oil was off 1+ to the 55s & gold slid 1 to 1470.
AMJ (Alerian MLP Index tracking fund)
Stocks opened in record territory as they looked to extend their winning streak to a 6th straight day. All 3 of the major averages were higher, with NAZ leading the way, up 0.3%., while the Dow & S&P 500 both gained 0.2%. Pres Trump celebrated the market's strength in a tweet. Commodities were weaker, with gold down 0.3% near $1467 an ounce & West Texas Intermediate crude oil off 1.7% at $56.15 a barrel. The yield on the 10-year Treasury note was little changed near 1.81% after mixed housing data. Housing starts rose 3.8% last month to a seasonally adjusted annual rate of 1.314M units, missing the 1.32M that was expected. Building permits climbed 5% to an annual rate of 1.461M units in Oct, the highest since 2007. In Asia, Japan's benchmark Nikkei 225 edged 0.5% lower, Hong Kong's Hang Seng gained 1.6%, while the Shanghai Composite was up 0.9%. The Chinese Central Bank cut the 7 -day reverse repurchase rate to 2.50% from 2.55%, fueling expectations that Beijing will continue to ease monetary policies. Chinese indices were rising moderately despite the continuing unrest in Hong Kong. Police have tightened their blockade over Hong Kong Polytechnic University, where some protesters are trapped & hundreds who left have been arrested.
Fed’s Williams says rates are ‘in the right place’ but policy is not set in stone
The clock has run out on Pres Trump's authority to impose “Section 232” tariffs on imports of foreign-made cars & auto parts, & he may have to find other means if he wants to pursue tariffs on European or Japanese cars, legal experts say. Their view was supported by a new US trade court ruling, published yesterday, that Trump's authority had lapsed in a previous Section 232 investigation on imports of foreign steel. Trump took no action last Thurs as a deadline to impose the national security tariffs of up to 25% on automotive imports from the EU, Japan or South Korea expired. Automakers had expected another delay in Trump's tariff decision as his administration pursues broader trade negotiations with the EU & Japan. In May, Trump invoked a 6-month negotiating period under Section 232 of the Trade Expansion Act of 1962, a law aimed at protecting the US Cold War-era defense industrial base. He has hailed the threat of tariffs as a strong negotiating tool to gain leverage over his opponents. But an initial trade deal with Japan reached in Sep did not address autos trade, while talks with the EU have not formally started as the 2 sides remain at odds over the scope of the negotiations. In a decision published yesterday, the Court of Intl Trade ruled that Trump ran out of time on a Section 232 investigation of steel imports, when he tried to double the tariffs on Turkish steel to 50% in Aug 2018. The move aimed at freeing an American pastor detained in Turkey was challenged by an Transpacific Steel, an importer of Turkish steel, which claimed that, among other things, the move came too late to follow proper procedures laid out in the law.
Home Depot (HD), a Dow stock, shares fell after the company once again cut its 2019 forecast & reported same-store sales well below estimates. The company said revenue, which also missed targets, was hurt by investments it is making in its business. EPS came in a penny better than expected. The company said the investments it's making in its business have yet to benefit its sales. HD has been spending money updating its stores & digital platform while also improving its supply chain. “We are largely on track with these investments and have seen positive results, but some of the benefits anticipated for fiscal 2019 will take longer to realize than our initial assumptions,” CEO Craig Menear said. EPS went up to $2.53 from $2.51 a year earlier. Analysts had expected $2.52. Sales increased 3.5% to $27.22B, just shy of the estimates for $27.53B. Sales at US stores open at least 12 months rose 3.8%. Analysts were expecting a 4.7% gain. HD also cut its sales forecast for the year. It now expects sales to grow 1.8%, down from a prior estimate of 2.3%. The company also cut its same-store sales forecast for the fiscal year. It expects growth of 3.5%, compared with an earlier forecast of 4%. The outlook for EPS unchanged. The stock sank 12 to the 226s.
If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
Stocks are drifting again, looking for direction. The chart below shows the Dow has had a good run since in Oct. Now it needs time to rest without exciting news to stimulate buying. Staying near to 28K, the bulls are still feeling pretty good.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 55.83 | -1.22 | -2.1% |
| GC=F | Gold | 1,470.80 | -1.10 | -0.1% |
Stocks opened in record territory as they looked to extend their winning streak to a 6th straight day. All 3 of the major averages were higher, with NAZ leading the way, up 0.3%., while the Dow & S&P 500 both gained 0.2%. Pres Trump celebrated the market's strength in a tweet. Commodities were weaker, with gold down 0.3% near $1467 an ounce & West Texas Intermediate crude oil off 1.7% at $56.15 a barrel. The yield on the 10-year Treasury note was little changed near 1.81% after mixed housing data. Housing starts rose 3.8% last month to a seasonally adjusted annual rate of 1.314M units, missing the 1.32M that was expected. Building permits climbed 5% to an annual rate of 1.461M units in Oct, the highest since 2007. In Asia, Japan's benchmark Nikkei 225 edged 0.5% lower, Hong Kong's Hang Seng gained 1.6%, while the Shanghai Composite was up 0.9%. The Chinese Central Bank cut the 7 -day reverse repurchase rate to 2.50% from 2.55%, fueling expectations that Beijing will continue to ease monetary policies. Chinese indices were rising moderately despite the continuing unrest in Hong Kong. Police have tightened their blockade over Hong Kong Polytechnic University, where some protesters are trapped & hundreds who left have been arrested.
Stocks continue record run
NY Fed Pres John Williams said he is
content with the current position of monetary policy & interest rates
but said the central bank should be prepared to act aggressively to
anticipate negative shocks to the economy. Williams also said he considers the US economy to be “in a very good
place” & inflation to be drifting up to the Fed's 2% longer-term goal. “I
think we’ve gotten the adjustments that we need at least right now.
Monetary policy is well-positioned given the recent actions,” he added. “My outlook is one for continued growth. I think we have
monetary policy in the right place. Our key thing is we’re not linked in
to any specific decisions” at future meetings. Federal Reserve
officials in Oct approved the 3rd qtr-point rate cut this
year. But in doing so, they also indicated that they likely will be on
hold for a period as they evaluate incoming data. The Fed's benchmark
funds rate is now targeted at 1.5%-1.75%. While
endorsing that position, Williams also veered back into a discussion
that generated some controversy back in Jul, when he said research has
shown that it's better to be aggressive in cutting rates before a
downturn hits rather than waiting for one to arrive. He does not
endorse the concept of “keeping your powder dry” because of the lags
between rate cuts & their impact on economic conditions. When he
made the remarks initially, they prompted a market reaction that
eventually led to Williams clarifying his remarks to say that he was
speaking theoretically rather than commenting on where he thought
current policy should go. “Given these lags in monetary policy,
you really need to be preemptive,” he said. “You need to be managing
risk in anticipation of where a shock may hit and be prepared to adjust
course if need be.”
Fed’s Williams says rates are ‘in the right place’ but policy is not set in stone
The clock has run out on Pres Trump's authority to impose “Section 232” tariffs on imports of foreign-made cars & auto parts, & he may have to find other means if he wants to pursue tariffs on European or Japanese cars, legal experts say. Their view was supported by a new US trade court ruling, published yesterday, that Trump's authority had lapsed in a previous Section 232 investigation on imports of foreign steel. Trump took no action last Thurs as a deadline to impose the national security tariffs of up to 25% on automotive imports from the EU, Japan or South Korea expired. Automakers had expected another delay in Trump's tariff decision as his administration pursues broader trade negotiations with the EU & Japan. In May, Trump invoked a 6-month negotiating period under Section 232 of the Trade Expansion Act of 1962, a law aimed at protecting the US Cold War-era defense industrial base. He has hailed the threat of tariffs as a strong negotiating tool to gain leverage over his opponents. But an initial trade deal with Japan reached in Sep did not address autos trade, while talks with the EU have not formally started as the 2 sides remain at odds over the scope of the negotiations. In a decision published yesterday, the Court of Intl Trade ruled that Trump ran out of time on a Section 232 investigation of steel imports, when he tried to double the tariffs on Turkish steel to 50% in Aug 2018. The move aimed at freeing an American pastor detained in Turkey was challenged by an Transpacific Steel, an importer of Turkish steel, which claimed that, among other things, the move came too late to follow proper procedures laid out in the law.
Trump's tariffs on European cars run out of time
Home Depot (HD), a Dow stock, shares fell after the company once again cut its 2019 forecast & reported same-store sales well below estimates. The company said revenue, which also missed targets, was hurt by investments it is making in its business. EPS came in a penny better than expected. The company said the investments it's making in its business have yet to benefit its sales. HD has been spending money updating its stores & digital platform while also improving its supply chain. “We are largely on track with these investments and have seen positive results, but some of the benefits anticipated for fiscal 2019 will take longer to realize than our initial assumptions,” CEO Craig Menear said. EPS went up to $2.53 from $2.51 a year earlier. Analysts had expected $2.52. Sales increased 3.5% to $27.22B, just shy of the estimates for $27.53B. Sales at US stores open at least 12 months rose 3.8%. Analysts were expecting a 4.7% gain. HD also cut its sales forecast for the year. It now expects sales to grow 1.8%, down from a prior estimate of 2.3%. The company also cut its same-store sales forecast for the fiscal year. It expects growth of 3.5%, compared with an earlier forecast of 4%. The outlook for EPS unchanged. The stock sank 12 to the 226s.
If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD?a_aid=CD3289&a_bid=6ae5b6f7
Home Depot cuts 2019 forecast after sales miss, shares drop
Stocks are drifting again, looking for direction. The chart below shows the Dow has had a good run since in Oct. Now it needs time to rest without exciting news to stimulate buying. Staying near to 28K, the bulls are still feeling pretty good.
Dow Jones Industrials
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