Dow fell 102, advancers slightly ahead of decliners & NAZ rose 20. The MLP index dropped another 3+ to the 197s (a low going back to 2004) & the REIT index added 1 to the 407s. Junk bond funds dipped lower & Treasuries continued being purchased. Oil dropped 1+ to the 55s (more below) & gold was steady at 1472.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The US will raise tariffs on Chinese goods "even higher" if the two sides cannot finalize a trade deal, Pres Trump said. The 2 sides struck a "phase one" agreement in Oct & had hoped to have the deal in writing last week, but are still negotiating. "China's going to have to make a deal that I like. If they don't, that's it. I'm very happy with China right now," Trump said. "They're paying us billions and billions. If we don't make a deal with China, I'll just raise the tariffs even higher." He said he has a "good relationship" with China. Beijing said yesterday that the VP & chief trade negotiator Liu He had "constructive discussions" during a Sat call with US Trade Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin. "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.
Pres Trump & his trade team are getting antsy. They are not sitting idle when it comes to pushing the passage of the United States-Mexico-Canada Agreement. Officials, including Secretary Mnuchin & Agriculture Secretary Sonny Perdue, as well as White House economic advisers Peter Navarro & Larry Kudlow are hosting one-on-one meetings with about 70 local news outlets in hopes to pressure the Dems to pass the bill that was officially signed about a year ago. The pres spoke with 2 television outlets & 2 radio shows. Speaking to reporters yesterday, he slammed House Speaker Nancy Pelosi as "incompetent" & has repeatedly railed against Dems for focusing on impeachment hearings over passing USMCA. At stake, potentially thousands of jobs that may be created. The White House also notes passing USMCA will boost US GDP by as much as $100B per year, according to Kudlow. Mexico & Canada are eager to get the ball rolling as those countries will also see an economic benefit from the USMCA. At least one Dem is now saying USMCA could be ratified by Christmas. When asked on Capitol Hill if he thinks this timeline is feasible, House Ways & Means Chairman Richard Neal (D-Mass.) said, "I do." Just last week, Pelosi insisted passing USMCA remains a priority. “I’d like to see us get it done this year, I mean, that would be my goal,” Pelosi told reporters, adding that she wants the USMCA to “be a template for future trade agreements.” Last month she said something similar. Despite her comments, top trade officials say Pelosi is all talk & no action. “She fiddles while the USMCA is in the deep freeze," White House trade adviser Peter Navarro said. "The false narrative here is this whole issue about labor enforcement. That problem’s effectively been solved.”
South Korea agreed to give the US market access for approximately $110M worth of rice a year, Trade Representative Robert Lighthizer & Agriculture Secretary Sonny Perdue announced. "Thanks to President Trump's leadership, this agreement gives our farmers the largest volume of guaranteed market access for rice in Korea that the United States has ever enjoyed," Lighthizer added. "It will prove enormously beneficial for American producers and their customers in Korea, who will enjoy access to high quality and cost competitive U.S. rice." The agreement providing access for 143K tons of rice annually will go into effect on Jan 1, 2020. "This announcement continues the Trump administration's aggressive promotion of U.S. exports," Rep Bruce Westerman said. "Since Arkansas leads the country in rice production, I hope to see even more international markets open up to allow our industry to thrive. I thank Trade Representative Lighthizer and Agriculture Secretary Perdue for their commitment to American agriculture." This agreement comes as the US global trade landscape is in an uncertain place. The Trump administration is trying to make progress in negotiations with China & convince Congress to pass the US-Mexico-Canada Agreement. The uncertainty combined with tariffs hasn't been good for farmers' bottom lines. Pres Trump said Fri a new round of payments would go out to farmers caught up in the China trade war. "Our great Farmers will recieve [sic] another major round of 'cash,' compliments of China Tariffs, prior to Thanksgiving," Trump tweeted. "The smaller farms and farmers will be big beneficiaries." "In the meantime, and as you may have noticed, China is starting to buy big again," he continued. "Japan deal DONE. Enjoy!"
A small band of anti-gov protesters, their numbers diminished by surrenders & failed escape attempts, remained holed up at a Hong Kong university early Wed as they braced for the endgame in a police siege of the campus. Police were waiting them out after 10 days of some of the most intense protests the city has seen in more than 5 months of often-violent unrest gripping the semi-autonomous Chinese city. Since the siege began Sun, more than 1K people were arrested & hundreds of injured treated at hospitals, authorities said. The gov has stood firm, rejecting most of the protesters' demands. The demonstrators shut down major roads & trains during rush hour every day last week as they turned several university campuses into fortresses & blocked a major road tunnel, which remained closed yesterday. Even as the latest violence wound down, a fundamental divide suggests the protests in the former British colony are far from over. In Beijing, the National People's Congress criticized Hong Kong's high court for striking down a ban on wearing face masks at the protests, in a decree that has potentially ominous implications for the city's vaunted rule of law & independent judiciary. China’s Communist leaders have taken a tough line on the protests & said that restoring order is the highest priority. Meanwhile, pro-democracy activist Joshua Wong was barred from going on a European speaking tour, after a court refused to change his bail conditions to let him travel outside Hong Kong. Protesters have left all the universities except Hong Kong Polytechnic, where hundreds had barricaded themselves & fought back police barrages of tear gas & water cannons with gasoline bombs, some launched from rooftops by catapult, & bows & arrows. Those who remained at Polytechnic were the last holdouts. Surrounded by police, they faced arrest. Several groups have tried to escape, including one that slid down hoses from a footbridge to waiting motorcycles, but police said they intercepted 37, including the drivers, who were arrested for “assisting offenders." They milled about in small groups & had boxes of homemade gasoline bombs, but the mood was grim in the trash-strewn plazas, in contrast to the excitement as they prepared to take on police just a few days earlier.
The House passed a temporary government funding bill to hold off a shutdown for a few more weeks. The bill would fund the gov at current levels thru Dec 20. The chamber passed it by a 231-192 margin. It now heads to the Senate. Senate Majority Leader Mitch McConnell said yesterday that the White House indicated Pres Trump would support a plan to keep the gov running thru Dec 20. His backing suggests the GOP-held Senate will pass the measure. Funding will lapse Fri if Congress cannot pass a funding plan. The continuing resolution gives lawmakers a few more weeks to strike a deal on long-term appropriations. Congress passed a 2-year agreement to set budget levels & suspend the debt limit earlier this year. However, the House & Senate have struggled to agree on where exactly to put the money amid disputes over border security funding.
House votes to avoid a government shutdown for a month, sending funding bill to Senate
Oil futures declined for a 2nd consecutive session, marking the lowest settlement so far this month & sending US prices below their 50-day moving average. Expectations for a 4th consecutive weekly rise in US crude supplies & a report that said major oil exporter Russia wasn't likely to advocate for deeper cuts during a key meeting of major oil producers in Dec pressured prices for oil. West Texas Intermediate crude for Dec delivery lost $1.84 (3.2%) to settle at $55.21 a barrel. The contract, which expires tomorrow, ended today below its 50-day moving average of $55.59. Jan Brent crude lost $1.53 (2.5%) to $60.91 a barrel, following its 1.4% skid, a day ago. Both crude benchmarks marked the lowest front-month contract settlements since Oct 31. OPEC is slated to hold a 2-day gathering beginning Dec 5 in Vienna, with its core members & major outside producers like Russia, part of an oil group known as OPEC+. Reports have suggested that Saudi Arabia, the de facto head of OPEC by virtue of its oil production might, is pushing for deeper cuts to production among OPEC & non-OPEC members in an effort to stabilize weak prices ahead of a massive IPO of Saudi Aramco oil behemoth. Saudi officials are aiming for a valuation of $1.6-$1.7T. In place presently is an agreement between OPEC & non-OPEC members for a combined cut to oil output of 1.2M barrels a day, which ends in Mar. Additionally, doubts about appetite for the Aramco IPO are also being interpreted as a sign of weakness about the oil market which has been wrestling with fears of slowing global growth and fears of oversupply.
This was pretty much a break even day for stocks, although the Dow was hit with selling. Retail earnings are a drag. More importantly, the trade picture got darker. The South Korea story looks good while USMCA is going nowhere fast even though it is not contested by the US. Additionally, optimism on the US-China trade faded fast today. Market indices are near records, but they may need a rest after the recent rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The US will raise tariffs on Chinese goods "even higher" if the two sides cannot finalize a trade deal, Pres Trump said. The 2 sides struck a "phase one" agreement in Oct & had hoped to have the deal in writing last week, but are still negotiating. "China's going to have to make a deal that I like. If they don't, that's it. I'm very happy with China right now," Trump said. "They're paying us billions and billions. If we don't make a deal with China, I'll just raise the tariffs even higher." He said he has a "good relationship" with China. Beijing said yesterday that the VP & chief trade negotiator Liu He had "constructive discussions" during a Sat call with US Trade Representative Robert Lighthizer & Treasury Secretary Steve Mnuchin. "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.
Trump throws down the gauntlet, won't budge on China's big demand
Pres Trump & his trade team are getting antsy. They are not sitting idle when it comes to pushing the passage of the United States-Mexico-Canada Agreement. Officials, including Secretary Mnuchin & Agriculture Secretary Sonny Perdue, as well as White House economic advisers Peter Navarro & Larry Kudlow are hosting one-on-one meetings with about 70 local news outlets in hopes to pressure the Dems to pass the bill that was officially signed about a year ago. The pres spoke with 2 television outlets & 2 radio shows. Speaking to reporters yesterday, he slammed House Speaker Nancy Pelosi as "incompetent" & has repeatedly railed against Dems for focusing on impeachment hearings over passing USMCA. At stake, potentially thousands of jobs that may be created. The White House also notes passing USMCA will boost US GDP by as much as $100B per year, according to Kudlow. Mexico & Canada are eager to get the ball rolling as those countries will also see an economic benefit from the USMCA. At least one Dem is now saying USMCA could be ratified by Christmas. When asked on Capitol Hill if he thinks this timeline is feasible, House Ways & Means Chairman Richard Neal (D-Mass.) said, "I do." Just last week, Pelosi insisted passing USMCA remains a priority. “I’d like to see us get it done this year, I mean, that would be my goal,” Pelosi told reporters, adding that she wants the USMCA to “be a template for future trade agreements.” Last month she said something similar. Despite her comments, top trade officials say Pelosi is all talk & no action. “She fiddles while the USMCA is in the deep freeze," White House trade adviser Peter Navarro said. "The false narrative here is this whole issue about labor enforcement. That problem’s effectively been solved.”
White House goes scorched earth on Democrats in new USMCA push
South Korea agreed to give the US market access for approximately $110M worth of rice a year, Trade Representative Robert Lighthizer & Agriculture Secretary Sonny Perdue announced. "Thanks to President Trump's leadership, this agreement gives our farmers the largest volume of guaranteed market access for rice in Korea that the United States has ever enjoyed," Lighthizer added. "It will prove enormously beneficial for American producers and their customers in Korea, who will enjoy access to high quality and cost competitive U.S. rice." The agreement providing access for 143K tons of rice annually will go into effect on Jan 1, 2020. "This announcement continues the Trump administration's aggressive promotion of U.S. exports," Rep Bruce Westerman said. "Since Arkansas leads the country in rice production, I hope to see even more international markets open up to allow our industry to thrive. I thank Trade Representative Lighthizer and Agriculture Secretary Perdue for their commitment to American agriculture." This agreement comes as the US global trade landscape is in an uncertain place. The Trump administration is trying to make progress in negotiations with China & convince Congress to pass the US-Mexico-Canada Agreement. The uncertainty combined with tariffs hasn't been good for farmers' bottom lines. Pres Trump said Fri a new round of payments would go out to farmers caught up in the China trade war. "Our great Farmers will recieve [sic] another major round of 'cash,' compliments of China Tariffs, prior to Thanksgiving," Trump tweeted. "The smaller farms and farmers will be big beneficiaries." "In the meantime, and as you may have noticed, China is starting to buy big again," he continued. "Japan deal DONE. Enjoy!"
South Korea hands US historic $110M win in trade talks
A small band of anti-gov protesters, their numbers diminished by surrenders & failed escape attempts, remained holed up at a Hong Kong university early Wed as they braced for the endgame in a police siege of the campus. Police were waiting them out after 10 days of some of the most intense protests the city has seen in more than 5 months of often-violent unrest gripping the semi-autonomous Chinese city. Since the siege began Sun, more than 1K people were arrested & hundreds of injured treated at hospitals, authorities said. The gov has stood firm, rejecting most of the protesters' demands. The demonstrators shut down major roads & trains during rush hour every day last week as they turned several university campuses into fortresses & blocked a major road tunnel, which remained closed yesterday. Even as the latest violence wound down, a fundamental divide suggests the protests in the former British colony are far from over. In Beijing, the National People's Congress criticized Hong Kong's high court for striking down a ban on wearing face masks at the protests, in a decree that has potentially ominous implications for the city's vaunted rule of law & independent judiciary. China’s Communist leaders have taken a tough line on the protests & said that restoring order is the highest priority. Meanwhile, pro-democracy activist Joshua Wong was barred from going on a European speaking tour, after a court refused to change his bail conditions to let him travel outside Hong Kong. Protesters have left all the universities except Hong Kong Polytechnic, where hundreds had barricaded themselves & fought back police barrages of tear gas & water cannons with gasoline bombs, some launched from rooftops by catapult, & bows & arrows. Those who remained at Polytechnic were the last holdouts. Surrounded by police, they faced arrest. Several groups have tried to escape, including one that slid down hoses from a footbridge to waiting motorcycles, but police said they intercepted 37, including the drivers, who were arrested for “assisting offenders." They milled about in small groups & had boxes of homemade gasoline bombs, but the mood was grim in the trash-strewn plazas, in contrast to the excitement as they prepared to take on police just a few days earlier.
Police surround last holdouts at Hong Kong campus protest
The House passed a temporary government funding bill to hold off a shutdown for a few more weeks. The bill would fund the gov at current levels thru Dec 20. The chamber passed it by a 231-192 margin. It now heads to the Senate. Senate Majority Leader Mitch McConnell said yesterday that the White House indicated Pres Trump would support a plan to keep the gov running thru Dec 20. His backing suggests the GOP-held Senate will pass the measure. Funding will lapse Fri if Congress cannot pass a funding plan. The continuing resolution gives lawmakers a few more weeks to strike a deal on long-term appropriations. Congress passed a 2-year agreement to set budget levels & suspend the debt limit earlier this year. However, the House & Senate have struggled to agree on where exactly to put the money amid disputes over border security funding.
House votes to avoid a government shutdown for a month, sending funding bill to Senate
Oil futures declined for a 2nd consecutive session, marking the lowest settlement so far this month & sending US prices below their 50-day moving average. Expectations for a 4th consecutive weekly rise in US crude supplies & a report that said major oil exporter Russia wasn't likely to advocate for deeper cuts during a key meeting of major oil producers in Dec pressured prices for oil. West Texas Intermediate crude for Dec delivery lost $1.84 (3.2%) to settle at $55.21 a barrel. The contract, which expires tomorrow, ended today below its 50-day moving average of $55.59. Jan Brent crude lost $1.53 (2.5%) to $60.91 a barrel, following its 1.4% skid, a day ago. Both crude benchmarks marked the lowest front-month contract settlements since Oct 31. OPEC is slated to hold a 2-day gathering beginning Dec 5 in Vienna, with its core members & major outside producers like Russia, part of an oil group known as OPEC+. Reports have suggested that Saudi Arabia, the de facto head of OPEC by virtue of its oil production might, is pushing for deeper cuts to production among OPEC & non-OPEC members in an effort to stabilize weak prices ahead of a massive IPO of Saudi Aramco oil behemoth. Saudi officials are aiming for a valuation of $1.6-$1.7T. In place presently is an agreement between OPEC & non-OPEC members for a combined cut to oil output of 1.2M barrels a day, which ends in Mar. Additionally, doubts about appetite for the Aramco IPO are also being interpreted as a sign of weakness about the oil market which has been wrestling with fears of slowing global growth and fears of oversupply.
Oil futures mark lowest settlement of the month so far
This was pretty much a break even day for stocks, although the Dow was hit with selling. Retail earnings are a drag. More importantly, the trade picture got darker. The South Korea story looks good while USMCA is going nowhere fast even though it is not contested by the US. Additionally, optimism on the US-China trade faded fast today. Market indices are near records, but they may need a rest after the recent rally.
Dow Jones Industrials
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