Dow crawled up 6 to another record, advancers were modestly ahead of decliners & NAZ rose 40. The MLP index was fractionally lower to the 209s & the REIT index lost 1 to the 397s. Junk bond funds were mixed & Treasuries slid lower (more below). Oil went up in the 57s & gold continued its losing way, falling 4 to 1462 (more below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Pres Trump says China wants relief from US tariffs but realizes he won't lift all of them & equity markets slid in reaction to the news. “China would like to make a deal much more than I would," the pres said. "They'd like to have a rollback. I haven't agreed to anything." Trump's comments offer new insight into differing assessments from his administration on trade talks with China. White House Press Secretary Stephanie Grisham said that it's possible “some tariffs could be lifted” if a partial deal is reached. Earlier trade adviser Peter Navarro said the US may be willing to postpone the tariffs scheduled to hit $156B of Chinese goods on Dec 15. Yesterday, Navarro said there was “no agreement” to remove existing tariffs as a condition of a phase one deal. The back & forth comes after Chinese Ministry of Finance spokesperson Gao Feng said yesterday that the US & China agreed to "remove the additional tariffs imposed in phases as progress is made on the agreement." But it has been learned that US negotiators were pursuing that goal. The US & China are said to be nearing a partial trade deal & had hoped to sign an agreement later this month at the Asia Pacific Economic Cooperation summit in Santiago, Chile, but the event was canceled due to unrest in the country. The 2 sides still hope to ink an agreement, which Trump says would take place in the US. Trump has said a comprehensive trade deal, which would end the trade war that has seen the world's 2 economic superpowers impose tariffs on each other's goods, would require 2 or 3 phases.
Along with all of the other things it must consider, the Federal Reserve needs to take into account climate change when formulating monetary policy, Fed Governor Lael Brainard said. The issue could have impact on determining the proper level of interest rates & cause systemic financial damage in a way similar to what happened during the financial crisis, the central bank official said “Increasingly, it will be important for the Federal Reserve to take into account the effects of climate change and associated policies in setting monetary policy to achieve our objectives of maximum employment and price stability,” Brainard added in prepared remarks. Among the considerations for the Fed would be whether the impact of climate change-related events such as hurricanes, wildfires & floods are temporary or long lasting. Such assessments could help determine where the Fed views the long-run “neutral” interest rate that is neither stimulative nor restrictive to growth. “Just on its own, the large amount of uncertainty regarding climate-related events and policies could hold back investment and economic activity,” Brainard said. Should fallout from climate change intensify, it could cause asset valuations to be mispriced in a way she compared to real estate leading up to the financial crisis. “For example, if prices of properties do not accurately reflect climate-related risks, a sudden correction could result in losses to financial institutions, which could in turn reduce lending in the economy. The associated declines in wealth could amplify the effects on economic activity, which could have further knock-on effects on financial markets,” Brainard ontinued. She added that banks need to be prepared against such shifts & be able to identify the risks. Brainard’s speech did not otherwise address where she feels monetary policy should be. The FOMClast week approved its 3rd interest rate cut this year, but officials indicated that it likely will be the last for a while.
Fed Governor Lael Brainard: says the central bank needs to guard against climate change
Long-term U.S. gov debt yields had a strong weekly advance as warmer trade relations between DC & Beijing buoyed equities & pressure bonds for much of the trading sessions. The yield on the benchmark 10-year Treasury note was little changed at 1.921%, while the yield on the 30=-year Treasury bond was also stagnant at 2.406% today. But Fri's calmer markets followed one of the biggest moves in the 10-year Treasury yield in recent years. At its highs yesterday, the 10-year yield jumped 15 basis points to 1.96%, its biggest jump since the 20-basis-point move the day after Pres Trump was elected in 2016. The move brought the yield to its highest level since Aug. The yield curve, which inverted over the summer & stoked recession fears, also steepened to the widest since Jan yesterday. The spread between the 10-year yield & the 2-year yield was last seen at 26 basis points; the 10-year/3-month spread was at 38 basis points. The week's upward move in long-term rates tracked improved market sentiment over US-China trade relations, better-than-expected corp profits& a marginally better economic outlook. Market players are following US-China trade discussions after a spokesperson for the Chinese commerce ministry said yesterday that both sides had agreed to cancel existing tariffs in phases. Both countries have had tense trade discussions since 2018.
Treasury yields head for marked weekly climb as US-China relations ease
Gold futures settled with a loss today, at their lowest in more than 3 months & posted their biggest weekly percentage decline since May 2017. Losses for the week came on the back of a rotation by investors out of assets perceived as safe & into those they could offer richer returns on the back of some optimism about progress on a US-China trade deal. The stock market & Treasury yields climbed for the week,& strength in the $ also helped dull demand for $-denominated gold. Dec gold fell $3.50 (0.2%) to settle at $1462 an ounce, after declining 1.8% yesterday, the lowest settlement for a most-active contract since Aug 2. For the week, gold gave up 3.2%, the biggest since May 5, 2017, when the most-active contract fell 3.3%.
Gold suffers its biggest weekly percentage decline in 2½ years
The US consumer sentiment survey rose slightly to 95.7 this month from 95.5 in Oct, the Univ of Mich said in a preliminary estimate. The forecast called for a reading of 95. According to the Univ of Mich, a gauge of consumers' views on current conditions declined to 110.9 in Nov from 113.2 in Oct, while a barometer of their expectations rose to 85.9 from 84.2. Economists follow readings on confidence to look for clues about consumer spending, the backbone of the economy. Consumer spending is even more important now that business investment has slumped. Sentiment has moved higher after a sharp drop in Aug. Economists say low interest rates have bolstered the outlook for households. A reading of inflation expectations, the 5-10 year measure rose a tenth to 2.4%, at the lower end of recent range but stable. The index is closely watched by the Federal Reserve, which views declining consumer assumptions of falling inflation as a signal of a weak economic outlook. “Although consumers have become somewhat more cautious spenders, they see no reason to engage in the type of retrenchment that causes recessions,” said Richard Curtin, the surveys of consumers chief economist.
Buying in the last hour helped the NAZ & brought the Dow up to a new record. Confusion about removing tariffs on Dec 15 was a nagging thought for traders all day. That should be cleared up next week, Meanwhile the Dow is up 600+ in Nov as it recorded more record highs. Even 30K for the Dow doesn't look that far away with favorable trade thoughts in the air.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Pres Trump says China wants relief from US tariffs but realizes he won't lift all of them & equity markets slid in reaction to the news. “China would like to make a deal much more than I would," the pres said. "They'd like to have a rollback. I haven't agreed to anything." Trump's comments offer new insight into differing assessments from his administration on trade talks with China. White House Press Secretary Stephanie Grisham said that it's possible “some tariffs could be lifted” if a partial deal is reached. Earlier trade adviser Peter Navarro said the US may be willing to postpone the tariffs scheduled to hit $156B of Chinese goods on Dec 15. Yesterday, Navarro said there was “no agreement” to remove existing tariffs as a condition of a phase one deal. The back & forth comes after Chinese Ministry of Finance spokesperson Gao Feng said yesterday that the US & China agreed to "remove the additional tariffs imposed in phases as progress is made on the agreement." But it has been learned that US negotiators were pursuing that goal. The US & China are said to be nearing a partial trade deal & had hoped to sign an agreement later this month at the Asia Pacific Economic Cooperation summit in Santiago, Chile, but the event was canceled due to unrest in the country. The 2 sides still hope to ink an agreement, which Trump says would take place in the US. Trump has said a comprehensive trade deal, which would end the trade war that has seen the world's 2 economic superpowers impose tariffs on each other's goods, would require 2 or 3 phases.
Trump rules out lifting all China tariffs
Along with all of the other things it must consider, the Federal Reserve needs to take into account climate change when formulating monetary policy, Fed Governor Lael Brainard said. The issue could have impact on determining the proper level of interest rates & cause systemic financial damage in a way similar to what happened during the financial crisis, the central bank official said “Increasingly, it will be important for the Federal Reserve to take into account the effects of climate change and associated policies in setting monetary policy to achieve our objectives of maximum employment and price stability,” Brainard added in prepared remarks. Among the considerations for the Fed would be whether the impact of climate change-related events such as hurricanes, wildfires & floods are temporary or long lasting. Such assessments could help determine where the Fed views the long-run “neutral” interest rate that is neither stimulative nor restrictive to growth. “Just on its own, the large amount of uncertainty regarding climate-related events and policies could hold back investment and economic activity,” Brainard said. Should fallout from climate change intensify, it could cause asset valuations to be mispriced in a way she compared to real estate leading up to the financial crisis. “For example, if prices of properties do not accurately reflect climate-related risks, a sudden correction could result in losses to financial institutions, which could in turn reduce lending in the economy. The associated declines in wealth could amplify the effects on economic activity, which could have further knock-on effects on financial markets,” Brainard ontinued. She added that banks need to be prepared against such shifts & be able to identify the risks. Brainard’s speech did not otherwise address where she feels monetary policy should be. The FOMClast week approved its 3rd interest rate cut this year, but officials indicated that it likely will be the last for a while.
Fed Governor Lael Brainard: says the central bank needs to guard against climate change
Long-term U.S. gov debt yields had a strong weekly advance as warmer trade relations between DC & Beijing buoyed equities & pressure bonds for much of the trading sessions. The yield on the benchmark 10-year Treasury note was little changed at 1.921%, while the yield on the 30=-year Treasury bond was also stagnant at 2.406% today. But Fri's calmer markets followed one of the biggest moves in the 10-year Treasury yield in recent years. At its highs yesterday, the 10-year yield jumped 15 basis points to 1.96%, its biggest jump since the 20-basis-point move the day after Pres Trump was elected in 2016. The move brought the yield to its highest level since Aug. The yield curve, which inverted over the summer & stoked recession fears, also steepened to the widest since Jan yesterday. The spread between the 10-year yield & the 2-year yield was last seen at 26 basis points; the 10-year/3-month spread was at 38 basis points. The week's upward move in long-term rates tracked improved market sentiment over US-China trade relations, better-than-expected corp profits& a marginally better economic outlook. Market players are following US-China trade discussions after a spokesperson for the Chinese commerce ministry said yesterday that both sides had agreed to cancel existing tariffs in phases. Both countries have had tense trade discussions since 2018.
Treasury yields head for marked weekly climb as US-China relations ease
Gold futures settled with a loss today, at their lowest in more than 3 months & posted their biggest weekly percentage decline since May 2017. Losses for the week came on the back of a rotation by investors out of assets perceived as safe & into those they could offer richer returns on the back of some optimism about progress on a US-China trade deal. The stock market & Treasury yields climbed for the week,& strength in the $ also helped dull demand for $-denominated gold. Dec gold fell $3.50 (0.2%) to settle at $1462 an ounce, after declining 1.8% yesterday, the lowest settlement for a most-active contract since Aug 2. For the week, gold gave up 3.2%, the biggest since May 5, 2017, when the most-active contract fell 3.3%.
Gold suffers its biggest weekly percentage decline in 2½ years
The US consumer sentiment survey rose slightly to 95.7 this month from 95.5 in Oct, the Univ of Mich said in a preliminary estimate. The forecast called for a reading of 95. According to the Univ of Mich, a gauge of consumers' views on current conditions declined to 110.9 in Nov from 113.2 in Oct, while a barometer of their expectations rose to 85.9 from 84.2. Economists follow readings on confidence to look for clues about consumer spending, the backbone of the economy. Consumer spending is even more important now that business investment has slumped. Sentiment has moved higher after a sharp drop in Aug. Economists say low interest rates have bolstered the outlook for households. A reading of inflation expectations, the 5-10 year measure rose a tenth to 2.4%, at the lower end of recent range but stable. The index is closely watched by the Federal Reserve, which views declining consumer assumptions of falling inflation as a signal of a weak economic outlook. “Although consumers have become somewhat more cautious spenders, they see no reason to engage in the type of retrenchment that causes recessions,” said Richard Curtin, the surveys of consumers chief economist.
U.S. consumer sentiment improves a bit in November
Buying in the last hour helped the NAZ & brought the Dow up to a new record. Confusion about removing tariffs on Dec 15 was a nagging thought for traders all day. That should be cleared up next week, Meanwhile the Dow is up 600+ in Nov as it recorded more record highs. Even 30K for the Dow doesn't look that far away with favorable trade thoughts in the air.
Dow Jones Industrials
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