Dow lost 1 (trading lower at midday) advancers over decliners 5-4 & NAZ fell 3. The MLP index lost another 1 to the 203s & the REIT index gained 2 to 401. Junk bond funds declined & Treasuries rose in price. Oil slid back to the 56s & gold added 8 o 1471.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
With the US-Mexico-Canada Agreement collecting dust, House Speaker Pelosi, yet again, insists it remains a priority. “I’d like to see us get it done this year, I mean, that would be my goal,” House Speaker Nancy Pelosi told reporters, adding that she wants the USMCA to “be a template for future trade agreements.” Last month she said something similar. "We’re moving ahead on USMCA hoping to be on a path, a continuing path to ‘yes,’” Pelosi told reporters. Talk versus action has the Trump administration crying foul, slamming Pelosi for not bringing USMCA to the House floor for a vote. “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.” The USMCA, which overhauls the Clinton-era North American Free Trade Agreement, commonly known as NAFTA, requires 75% of automobile components be manufactured in the US, Canada & Mexico in order to avoid tariffs, & that 40-45% of automobile parts be made by workers who earn at least $16 an hour by 2023. Pelosi & House Dems have voiced concerns about enforcement of the minimum wage. Pres Trump blames the delay on House Dems being “too busy working on impeachment" which led to the start of the hearings this week. There are some concerns that House Dems' failure to pass USMCA this year could prevent the deal from every getting approved by Congress as 2020 is an election year. The USMCA was ratified by Mexico on Jun 19, & Canadian Prime Minister Justin Trudeau has said his gov would take it up for a vote once it passed thru the US House of Representatives.
Federal Reserve Chair Jerome Powell does not expect sluggish factory activity, which stoked fears of an impending recession earlier this year, to spill over into the broader economy. "That's a risk that we monitor very carefully," Powell told the Joint Economic Committee. "We don't see that yet." Powell told lawmakers that because consumers are powering almost ¾ of the country's GDP at the moment, a slowdown in manufacturing is unlikely to pose a significant threat to the economy. "That is what is driving our economy now," he added. "And it seems to be continuing to do so. But we monitor that very, very carefully." In Aug, the manufacturing sector contracted for the first time in 3 years, raising concerns about the health of the economy. That grim trend continued in Oct, when the industry posted the biggest contraction in more than a decade. Although the metric improved slightly in Oct, it remains in contraction territory at 49.1. Although manufacturing only accounts for about 11% of the economy, weak growth in the sector tends to precede recessions. But Powell dismissed the possibility of a recession in the US, saying there's no reason the 11-year economic expansion can't continue. "U.S. economy is the star economy these days," he said. "More than other advanced economies and [there's] no reason to think that can't continue."
Interest rates are at an appropriate level given the pace of economic growth, NY Fed Pres John Williams said. In a speech 2 weeks after the central bank lowered its benchmark interest rate for the 3rd time this year, Williams indicated that no further moves are likely if current conditions hold up. “The adjustments to monetary policy we made this year were designed to balance maintaining a strong U.S. economy with slowing global growth, and provide insurance against ongoing and potential future risks,” he said. “And that’s what they’ve done. The economy is in a good place, and monetary policy is as well.” The “good place” phrase repeats language Fed Chair Jerome Powell used after the Oct 30 rate cut, which takes the Fed's benchmark rate to 1.5-1.75%. Fed officials indicated then that they are likely to pause for a while as they observe current conditions. Williams said that while he’s comfortable with the current stance, central bank officials will continue to monitor data & adjust policy as needed. “Of course, things can change. Data dependency remains our motto, and if there were a material change to this outlook, we would adjust monetary policy in support of our goals of maximum employment and price stability,” he said .
Interest rates are in a ‘good place,’ New York Fed leader Williams says
The “key risk” facing the U.S. economy is a sharper-than-expected slowdown, despite the Federal Reserve’s recent interest-rate easing, said St Louis Fed Pres James Bullard. “It remains possible that a sharper-than-expected slowdown could materialize in the quarters ahead,” Bullard said in a speech. He added the US economy has already been slowing down this year after relatively rapid growth over 2017 & 2018. Downside risk may cause the slowdown to intensify, he said.
The “key risk” facing the economy is a sharper-than-expected slowdown, despite the Federal Reserve's recent interest-rate easing, said St Louis Fed Pres James Bullard. “It remains possible that a sharper-than-expected slowdown could materialize in the quarters ahead,” Bullard added. He said the economy has already been slowing down this year after relatively rapid growth over 2017 & 2018. Downside risk may cause the slowdown to intensify, he continued. Bullard has been one of the most dovish regional Fed presidents, urging the Fed to start easing aggressively. The Fed has tried to help insure against this downside risk by dramatically altering the path of interest rates this year, he said. The 3 rate cuts from Jul-Oct may help to foster somewhat faster growth next year. In comments to reporters, Bullard said the Fed should pause now. “The Fed has made a major move during 2019 and now it makes sense to wait and see how the economy responds, during the fourth quarter here and into 2020,” Bullard said. Even if some data soon surprised to the downside, the Fed has been pre-emptive, he added. He repeated that he thinks trade uncertainty could last “for years.” This creates a disincentive for global investment and, accordingly, the global growth environment looks weaker in recent qts. This slower growth may feed back into slower growth in the US, he said. The St Louis Fed pres said that key measures of the Treasury yield curve have now returned to a positive slope. “This return to a more normal state of affairs may be a bullish factor for 2020,” he added. Bullard said his baseline forecast is 2% real GDP growth “or better” next year. Right now, corps are trying to reorganize global supply chains in light of trade uncertainty. When that is finished, global growth should pick up, he added. “If we get through that whole process without having a major disruption to U.S. growth, I will call that a success,” he said.
OPEC lowered its oil production growth forecast for non-cartel countries for 2020, citing a downward adjustment to its forecast for the US. In its closely-scrutinized monthly oil market report, OPEC cut its 2020 non-OPEC production growth estimate by 34K barrels a day to 2.17M barrels a day.
Oil futures finished lower after a gov report revealed that domestic crude inventories rose a 3rd straight week, gasoline supplies logged their first climb in 7 weeks & production reached a new record level. West Texas Intermediate crude futures for Dec delivery fell by 35¢ (0.6%) to settle at $56.77 a barrel. Global benchmark Jan Brent crude lost 9¢ to end at $62.28 a barrel. The EIA reported that US crude supplies rose 2.2M barrels for the latest week. The data came out a day later than usual because of Veterans Day holiday. Crude supplies were forecast to increase by 1M. The American Petroleum Institute yesterday reported a decline of 541K barrels.
Stocks had one of those uneventful days. However even on these days, the popular averages are crawling up to new records. One important measure of the bull market is the Dow which is a little below 28K. Topping that psychologically important level, the Dow would be up 10K since Trump's election. It took the Dow its entire history thru roughly 2000 to reach 10K!!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
With the US-Mexico-Canada Agreement collecting dust, House Speaker Pelosi, yet again, insists it remains a priority. “I’d like to see us get it done this year, I mean, that would be my goal,” House Speaker Nancy Pelosi told reporters, adding that she wants the USMCA to “be a template for future trade agreements.” Last month she said something similar. "We’re moving ahead on USMCA hoping to be on a path, a continuing path to ‘yes,’” Pelosi told reporters. Talk versus action has the Trump administration crying foul, slamming Pelosi for not bringing USMCA to the House floor for a vote. “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.” The USMCA, which overhauls the Clinton-era North American Free Trade Agreement, commonly known as NAFTA, requires 75% of automobile components be manufactured in the US, Canada & Mexico in order to avoid tariffs, & that 40-45% of automobile parts be made by workers who earn at least $16 an hour by 2023. Pelosi & House Dems have voiced concerns about enforcement of the minimum wage. Pres Trump blames the delay on House Dems being “too busy working on impeachment" which led to the start of the hearings this week. There are some concerns that House Dems' failure to pass USMCA this year could prevent the deal from every getting approved by Congress as 2020 is an election year. The USMCA was ratified by Mexico on Jun 19, & Canadian Prime Minister Justin Trudeau has said his gov would take it up for a vote once it passed thru the US House of Representatives.
Nancy Pelosi sets goal for getting US-Mexico-Canada trade deal done
Federal Reserve Chair Jerome Powell does not expect sluggish factory activity, which stoked fears of an impending recession earlier this year, to spill over into the broader economy. "That's a risk that we monitor very carefully," Powell told the Joint Economic Committee. "We don't see that yet." Powell told lawmakers that because consumers are powering almost ¾ of the country's GDP at the moment, a slowdown in manufacturing is unlikely to pose a significant threat to the economy. "That is what is driving our economy now," he added. "And it seems to be continuing to do so. But we monitor that very, very carefully." In Aug, the manufacturing sector contracted for the first time in 3 years, raising concerns about the health of the economy. That grim trend continued in Oct, when the industry posted the biggest contraction in more than a decade. Although the metric improved slightly in Oct, it remains in contraction territory at 49.1. Although manufacturing only accounts for about 11% of the economy, weak growth in the sector tends to precede recessions. But Powell dismissed the possibility of a recession in the US, saying there's no reason the 11-year economic expansion can't continue. "U.S. economy is the star economy these days," he said. "More than other advanced economies and [there's] no reason to think that can't continue."
Fed's Powell 'carefully monitoring' this potentially damaging activity
Interest rates are at an appropriate level given the pace of economic growth, NY Fed Pres John Williams said. In a speech 2 weeks after the central bank lowered its benchmark interest rate for the 3rd time this year, Williams indicated that no further moves are likely if current conditions hold up. “The adjustments to monetary policy we made this year were designed to balance maintaining a strong U.S. economy with slowing global growth, and provide insurance against ongoing and potential future risks,” he said. “And that’s what they’ve done. The economy is in a good place, and monetary policy is as well.” The “good place” phrase repeats language Fed Chair Jerome Powell used after the Oct 30 rate cut, which takes the Fed's benchmark rate to 1.5-1.75%. Fed officials indicated then that they are likely to pause for a while as they observe current conditions. Williams said that while he’s comfortable with the current stance, central bank officials will continue to monitor data & adjust policy as needed. “Of course, things can change. Data dependency remains our motto, and if there were a material change to this outlook, we would adjust monetary policy in support of our goals of maximum employment and price stability,” he said .
Interest rates are in a ‘good place,’ New York Fed leader Williams says
The “key risk” facing the U.S. economy is a sharper-than-expected slowdown, despite the Federal Reserve’s recent interest-rate easing, said St Louis Fed Pres James Bullard. “It remains possible that a sharper-than-expected slowdown could materialize in the quarters ahead,” Bullard said in a speech. He added the US economy has already been slowing down this year after relatively rapid growth over 2017 & 2018. Downside risk may cause the slowdown to intensify, he said.
Fed’s Bullard says sharper-than-expected economic slowdown is ‘key risk’
The “key risk” facing the economy is a sharper-than-expected slowdown, despite the Federal Reserve's recent interest-rate easing, said St Louis Fed Pres James Bullard. “It remains possible that a sharper-than-expected slowdown could materialize in the quarters ahead,” Bullard added. He said the economy has already been slowing down this year after relatively rapid growth over 2017 & 2018. Downside risk may cause the slowdown to intensify, he continued. Bullard has been one of the most dovish regional Fed presidents, urging the Fed to start easing aggressively. The Fed has tried to help insure against this downside risk by dramatically altering the path of interest rates this year, he said. The 3 rate cuts from Jul-Oct may help to foster somewhat faster growth next year. In comments to reporters, Bullard said the Fed should pause now. “The Fed has made a major move during 2019 and now it makes sense to wait and see how the economy responds, during the fourth quarter here and into 2020,” Bullard said. Even if some data soon surprised to the downside, the Fed has been pre-emptive, he added. He repeated that he thinks trade uncertainty could last “for years.” This creates a disincentive for global investment and, accordingly, the global growth environment looks weaker in recent qts. This slower growth may feed back into slower growth in the US, he said. The St Louis Fed pres said that key measures of the Treasury yield curve have now returned to a positive slope. “This return to a more normal state of affairs may be a bullish factor for 2020,” he added. Bullard said his baseline forecast is 2% real GDP growth “or better” next year. Right now, corps are trying to reorganize global supply chains in light of trade uncertainty. When that is finished, global growth should pick up, he added. “If we get through that whole process without having a major disruption to U.S. growth, I will call that a success,” he said.
Fed’s Bullard says sharper-than-expected economic slowdown is ‘key risk’
OPEC lowered its oil production growth forecast for non-cartel countries for 2020, citing a downward adjustment to its forecast for the US. In its closely-scrutinized monthly oil market report, OPEC cut its 2020 non-OPEC production growth estimate by 34K barrels a day to 2.17M barrels a day.
OPEC Cuts U.S. Oil Output Growth Forecast
Oil futures finished lower after a gov report revealed that domestic crude inventories rose a 3rd straight week, gasoline supplies logged their first climb in 7 weeks & production reached a new record level. West Texas Intermediate crude futures for Dec delivery fell by 35¢ (0.6%) to settle at $56.77 a barrel. Global benchmark Jan Brent crude lost 9¢ to end at $62.28 a barrel. The EIA reported that US crude supplies rose 2.2M barrels for the latest week. The data came out a day later than usual because of Veterans Day holiday. Crude supplies were forecast to increase by 1M. The American Petroleum Institute yesterday reported a decline of 541K barrels.
Oil prices finish lower as domestic crude and gasoline supplies post weekly rise
Stocks had one of those uneventful days. However even on these days, the popular averages are crawling up to new records. One important measure of the bull market is the Dow which is a little below 28K. Topping that psychologically important level, the Dow would be up 10K since Trump's election. It took the Dow its entire history thru roughly 2000 to reach 10K!!
Dow Jones Industrials
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