Dow slid back 10, decliners over advancers 4-3 & NAZ was off 31. The MLP index dropped another 2+ to the 202s (another more than a decade low) & the REIT index added 2+ to the 406s. Junk bond funds did little & Treasuries were bid higher. Oil pulled back in the 57s & gold crawled up 2 to 1470.
AMJ (Alerian MLP Index tracking fund)
The US & China continue to make progress toward a phase one trade deal. “The two sides have engaged in constructive discussions around the respective core concerns of the first phase of the agreement and will continue to maintain close communication,” the Chinese Commerce Ministry said in a press release following Vice Premier & chief trade negotiator Liu He's call with US Trade Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin on Sat. The 2 sides were hoping to have a partial trade deal in writing last week, but the Asia-Pacific Economic Cooperation summit in Santiago, Chile, was canceled due to unrest in the country, eliminating the soft deadline surrounding an agreement. A phase one trade deal is expected to be “relatively limited in scope,” with the major focus being on “current trade” & China's willingness to commit to the purchase of $40-50B of US agriculture, Commerce Secretary Wilbur Ross said. China has called on the US to roll back tariffs as part of a phase one deal, but Pres Trump has ruled that out. "China would like to make a deal much more than I would," the pres told reporters on Nov 9. "They'd like to have a rollback. I haven't agreed to anything." No decision has been made about the tariffs scheduled to hit $156B of Chinese goods on Dec 15. Still, Ross says there is a “very high probability” that a deal gets done, but warned, “the devil is always in the details.”
Hong Kong police using tear gas & batons fought off today as they tried to break thru a police cordon that is trapping hundreds of them on a university campus. Protesters advanced on the police from outside the cordon, while others emerged from the campus, their trademark umbrellas at the fore. Police used tear gas & in some places swooped in to subdue protesters & make arrests. It wasn't clear if any of those inside Hong Kong Polytechnic University escaped. Hong Kong's work week started with multiple protests that disrupted traffic, schools closed because of safety concerns & a temporary lull in the pitched battles for control of the Polytechnic campus, as the emphasis shifted from battering the protesters with tear gas & water cannons to waiting for them to come out. For days, protesters fortified the campus to keep police from getting in. Cornered by authorities, they were trying to get out. Officers repelled one attempt to with tear gas, driving a few hundred protesters back onto the campus. The give-&-take has played out repeatedly during the city's months of anti-gov unrest. The protesters want to avoid arrest & the police want to pick up as many as they can. Protesters won on a legal front when the high court struck down a mask ban imposed by the gov last month. The court said it did not consider anti-mask laws unconstitutional in general, but in this case, the law infringed on fundamental rights further than was reasonably necessary. Many protesters wear masks to shield their identities from surveillance cameras that could be used to arrest & prosecute them. The ban has been widely ignored & police have charged protesters with wearing masks. The protests started peacefully in early Jun, sparked by proposed legislation that would have allowed criminal suspects to be extradited to the mainland. But by the time the bill was withdrawn, the protests had hardened and broadened into a resistance movement against the territory's gov & Beijing. Activists see the extradition bill as an example of Hong Kong's eroding autonomy under Beijing rule since the 1997 handover from colonial power Britain. The head of a nationalistic Chinese newspaper said Hong Kong police should use snipers to fire live ammunition at violent protesters. “If the rioters are killed, the police should not have to bear legal responsibility,” Global Times editor Hu Xijin wrote on his Weibo social media account. Anti-gov protesters barricaded themselves inside Polytechnic last week. Police surrounded the area yesterday began moving in after issuing an ultimatum for people to leave the area. The crowd wore raincoats & carried umbrellas to shield themselves from police water cannons. At daybreak, protesters remained in control of most of the campus. In one outdoor area, some demonstrators made gasoline bombs while others dozed while wearing gas masks. 2 walked about with bows & quivers of arrows, while many stared at their smartphones.
The nation's single-family homebuilders are feeling very positive about their business, but a monthly sentiment indicator fell in Nov from a recent high. The national association of Home Builders/Wells Fargo Housing Market Index (HMI) fell one point to 70, after rising steadily since Jun to the highest level of the year last month. Anything above 50 is considered positive. The index measured 60 in Nov 2018. “Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth,” said NAHB Chairman Greg Ugalde. “In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions.” Of the index's 3 components, current sales conditions fell 2 points to 76, traffic of prospective buyers dropped one point to 53 & sales expectations in the next 6 months rose one point to 77. Sentiment, as well as housing starts, are stronger this year thanks in part to much lower mortgage interest rates. The average rate on the 30-year fixed mortgage was around 5% in Nov of 2018 & is now hovering just below 4%. Homebuilders are also finally, slowly starting to pivot more toward less pricey, starter homes. There are, however, still several roadblocks at that price point. “We have seen substantial year-over-year improvement following the housing affordability crunch of late 2018, when the HMI stood at 60,” said NAHB Chief Economist Robert Dietz. “However, lot shortages remain a serious problem, particularly among custom builders. Builders also continue to grapple with other affordability headwinds, including a lack of labor and regulatory constraints.” Stocks of the big public builders have been on a tear all year, rising as mortgage rates fall. Most builders have also been reporting solid beats in quarterly earnings, as buyer demand surges thanks to job growth & a severe shortage of affordable, existing homes for sale
Homebuilder confidence slips slightly in November
Not much excitement in the stock market today. Progress on the trade deal keeps lumbering along, The protests in Hong Kong are an important part of the story & they shows no sign of ending soon. The population there is small compared to the population of mainland China, but it's a significant part of China's total economy. Making matters worse, Hong Kong's economy has slipped into a recession. Meanwhile, the US stock markets hovers around record levels.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 57.14 | -0.58 | -1.0% |
| GC=F | Gold | 1,470.00 | +1.50 | +0.1% |
The US & China continue to make progress toward a phase one trade deal. “The two sides have engaged in constructive discussions around the respective core concerns of the first phase of the agreement and will continue to maintain close communication,” the Chinese Commerce Ministry said in a press release following Vice Premier & chief trade negotiator Liu He's call with US Trade Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin on Sat. The 2 sides were hoping to have a partial trade deal in writing last week, but the Asia-Pacific Economic Cooperation summit in Santiago, Chile, was canceled due to unrest in the country, eliminating the soft deadline surrounding an agreement. A phase one trade deal is expected to be “relatively limited in scope,” with the major focus being on “current trade” & China's willingness to commit to the purchase of $40-50B of US agriculture, Commerce Secretary Wilbur Ross said. China has called on the US to roll back tariffs as part of a phase one deal, but Pres Trump has ruled that out. "China would like to make a deal much more than I would," the pres told reporters on Nov 9. "They'd like to have a rollback. I haven't agreed to anything." No decision has been made about the tariffs scheduled to hit $156B of Chinese goods on Dec 15. Still, Ross says there is a “very high probability” that a deal gets done, but warned, “the devil is always in the details.”
Beijing hints at good news in US-China trade talks
Hong Kong police using tear gas & batons fought off today as they tried to break thru a police cordon that is trapping hundreds of them on a university campus. Protesters advanced on the police from outside the cordon, while others emerged from the campus, their trademark umbrellas at the fore. Police used tear gas & in some places swooped in to subdue protesters & make arrests. It wasn't clear if any of those inside Hong Kong Polytechnic University escaped. Hong Kong's work week started with multiple protests that disrupted traffic, schools closed because of safety concerns & a temporary lull in the pitched battles for control of the Polytechnic campus, as the emphasis shifted from battering the protesters with tear gas & water cannons to waiting for them to come out. For days, protesters fortified the campus to keep police from getting in. Cornered by authorities, they were trying to get out. Officers repelled one attempt to with tear gas, driving a few hundred protesters back onto the campus. The give-&-take has played out repeatedly during the city's months of anti-gov unrest. The protesters want to avoid arrest & the police want to pick up as many as they can. Protesters won on a legal front when the high court struck down a mask ban imposed by the gov last month. The court said it did not consider anti-mask laws unconstitutional in general, but in this case, the law infringed on fundamental rights further than was reasonably necessary. Many protesters wear masks to shield their identities from surveillance cameras that could be used to arrest & prosecute them. The ban has been widely ignored & police have charged protesters with wearing masks. The protests started peacefully in early Jun, sparked by proposed legislation that would have allowed criminal suspects to be extradited to the mainland. But by the time the bill was withdrawn, the protests had hardened and broadened into a resistance movement against the territory's gov & Beijing. Activists see the extradition bill as an example of Hong Kong's eroding autonomy under Beijing rule since the 1997 handover from colonial power Britain. The head of a nationalistic Chinese newspaper said Hong Kong police should use snipers to fire live ammunition at violent protesters. “If the rioters are killed, the police should not have to bear legal responsibility,” Global Times editor Hu Xijin wrote on his Weibo social media account. Anti-gov protesters barricaded themselves inside Polytechnic last week. Police surrounded the area yesterday began moving in after issuing an ultimatum for people to leave the area. The crowd wore raincoats & carried umbrellas to shield themselves from police water cannons. At daybreak, protesters remained in control of most of the campus. In one outdoor area, some demonstrators made gasoline bombs while others dozed while wearing gas masks. 2 walked about with bows & quivers of arrows, while many stared at their smartphones.
Hong Kong students fight off police charges in epic battle
The nation's single-family homebuilders are feeling very positive about their business, but a monthly sentiment indicator fell in Nov from a recent high. The national association of Home Builders/Wells Fargo Housing Market Index (HMI) fell one point to 70, after rising steadily since Jun to the highest level of the year last month. Anything above 50 is considered positive. The index measured 60 in Nov 2018. “Single-family builders are currently reporting ongoing positive conditions, spurred in part by low mortgage rates and continued job growth,” said NAHB Chairman Greg Ugalde. “In a further sign of solid demand, this is the fourth consecutive month where at least half of all builders surveyed have reported positive buyer traffic conditions.” Of the index's 3 components, current sales conditions fell 2 points to 76, traffic of prospective buyers dropped one point to 53 & sales expectations in the next 6 months rose one point to 77. Sentiment, as well as housing starts, are stronger this year thanks in part to much lower mortgage interest rates. The average rate on the 30-year fixed mortgage was around 5% in Nov of 2018 & is now hovering just below 4%. Homebuilders are also finally, slowly starting to pivot more toward less pricey, starter homes. There are, however, still several roadblocks at that price point. “We have seen substantial year-over-year improvement following the housing affordability crunch of late 2018, when the HMI stood at 60,” said NAHB Chief Economist Robert Dietz. “However, lot shortages remain a serious problem, particularly among custom builders. Builders also continue to grapple with other affordability headwinds, including a lack of labor and regulatory constraints.” Stocks of the big public builders have been on a tear all year, rising as mortgage rates fall. Most builders have also been reporting solid beats in quarterly earnings, as buyer demand surges thanks to job growth & a severe shortage of affordable, existing homes for sale
Homebuilder confidence slips slightly in November
Not much excitement in the stock market today. Progress on the trade deal keeps lumbering along, The protests in Hong Kong are an important part of the story & they shows no sign of ending soon. The population there is small compared to the population of mainland China, but it's a significant part of China's total economy. Making matters worse, Hong Kong's economy has slipped into a recession. Meanwhile, the US stock markets hovers around record levels.
Dow Jones Industrials
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