Dow went up 29, advancers over decliners better than 3-2 & NAZ gained 37. The MLP index finished even in the 209s & the REIT index fell 4+ to the 398s. Junk bond funds inched higher & Treasuries rose in price. Oil was off to the 58s (more below) & gold rose 11 to 1479.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The Federal Reserve unanimously voted to hold interest rates steady during its last policy meeting of the year, indicating that it's hitting pause on future action thru 2020. In a move that was widely expected, the FOMC, during its 2-day meeting this week, held the benchmark federal funds rate steady at 1.5-1.75%. So far this year, the Fed has made 3 minor interest rate cuts, part of what Chair Jerome Powell described as a “mid-cycle adjustment." Powell acknowledged in Oct that it would take a "really significant" rise in inflation above the Fed's preferred 2% benchmark before policymakers reversed course & returned to interest rate hikes. In their statement accompanying the decision, policymakers at the central bank projected that interest rates will remain unchanged thru 2020, though said they will continue to monitor conditions as they develop. “The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions & inflation near the Committee's symmetric 2% objective,” the statement said. "The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate," it added. The language reinforces previous Fed assessments that the economy is in a "good place" & will remain there if current conditions persist. The dot plot of individual members' future projections showed little chance of a rate cut or increase in 2020, with just 4 members anticipating the need for a qtr-point increase next year. A majority of officials saw the need for at least one rate hike in 2021. Policymakers again projected the economy to grow by a 2.2% annualized rate in 2019, followed by continuous, but modest, slower growth in the coming years: 2% in 2020 & 1.9% in 2021.
Yesterday Chinese soy importers bought at least 5 bulk cargo shipments of US soybeans (about 300K tonnes) for shipment in Jan & Feb after Beijing offered the buyers at least 1M tonnes in new tariff waivers, US exporters said. The fresh allotment of tariff waivers, which exempts importers from 30% tariffs on US shipments, comes after buyers used up nearly all of the 10M tonnes in waivers awarded by Beijing in Oct, the traders said. China has imposed steep tariffs on US soybeans & other agricultural products in retaliation for US duties on Chinese goods during a 17-month trade war that has disrupted global grain flows, rattled markets & weighed on global economic growth. The purchases (the largest in at least 2 weeks) according to Dept of Agriculture (USDA) data, came ahead of a Dec 15 deadline, when Pres Trump has said he would impose a new round of tariffs on Chinese goods. China said yesterday that it hoped to make a trade deal with the US as soon as possible before the new tariffs kick in. US soybean futures staged their strongest rally in 2 months yesterday, with the benchmark Jan contract climbing above the $9-per-bushel mark for the first time in 2 weeks. The fresh soybean sales bring China's total US purchases for the current Sep-Aug marketing year to around 10M tonnes, according to USDA data. That is well above the roughly 455K tonnes in commitments at the same point last year but considerably less than the 21.5M tonnes in sales on the books in early Dec 2017, before the trade war began. US soybean shipments to the world's top importer of the oilseed eroded as China turned to South American suppliers for more soybeans. But available soybean supplies from Brazil are running low ahead of the country's harvest, which typically ramps up in Jan or Feb. Beijing said on Fri it will waive import tariffs for some soybeans & pork shipments from the US but did not specify quantities.
The CEOs of America's biggest companies lowered their economic outlook for the 7th consecutive qtr as fears about the US-China trade war continued to rattle the country's top execs. The Business Roundtable's index of the CEO's economic outlook fell by 2.5 points in Q4 to 76.7, well below the historical average of 82.7, an indication of moderation in the pace of economic growth over the next 6 months. The organization, a nonprofit that represents 140 CEOs, projected the US economy will expand at a 2.1% annualized rate next year in its first forecast for 2020, in line with the Federal Reserve's estimates of 2% GDP growth. In dimming its forecast, the association cited tension between the US & its trading partners, as well as the manufacturing recession in the US. “There has been progress in several policy areas that has strengthened the U.S. economy from top to bottom, but more progress needs to be made on free and fair trade agreements,” said Jamie Dimon, JPMorgan Chase CEO & chairman of the Business Roundtable. The association's indices for sales & capital investment remained below historical averages. Sales ticked up slightly by 7 points to 98.6, while investment decreased by 8.9 points to 64.5. Hiring, meanwhile, decreased 5.5 points to 67.1, higher than its historical average. Yesterday, Dems signed off on a new trade deal with Canada & Mexico, handing Pres Trump a major victory on trade. But it’s still unclear whether the US intends to move forward with proposed tariffs against Chinese imports, set to take place Sun. Corp execs have been vocal opponents of the hundreds of Bs of $s in tariffs that have resulted from the trade war between the 2 large economies. “Because growth in trade-dependent jobs far outpaces job growth as a whole, we urge lawmakers to engage in more trade agreement negotiations and enact trade policies that preserve and strengthen an important pillar of the American economy,” Lance Fritz, CEO of Union Pacific, said. 48% of CEOs identified labor as the biggest cost pressure facing their companies, which they said reflected real wage growth for American workers & a healthy labor market fostered in part by the 2017 Tax Cuts & Jobs Act.
Home Depot's (HD), a Dow stock, disappointing preliminary outlook for fiscal-year 2020 indicates that its investment program to improve the customer shopping experience will put pressure on results in the coming year. Released ahead of the company's investor day, the guidance sent the stock lower. HD expects sales & same-store sales growth of about 3.5-4%. The consensus is for sales & same-store sales growth of 4.3%. The program, called “One Home Depot,” aims to create modern multiplatform shopping capabilities across both e-commerce & stores. The company will spend on store renovations, delivery & investment in the company's professional offerings. It launched the 3-year investment program in fiscal 2018. The home improvement retailer reiterated its fiscal 2019 guidance for sales growth of about 1.8%, same-store sales growth of 3.5% & EPS of $10.03. The stock dropped 3.88.
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’s investment plan weighs on fiscal 2020 outlook
Oil futures finished lower after gov data showed an unexpected climb in domestic supplies of crude oil, as well as sizable gains in gasoline & distillate stockpiles. Prices showed little reaction to the Federal Reserve's decision to hold its benchmark interest rate unchanged at 1.5-1.75%. Still, the central bank did offer a more upbeat view on the economy, which can boost prospects for oil demand. The central bank said “the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the FOMC’s symmetric 2% objective.” West Texas Intermediate crude for Jan delivery declined 48¢ (0.8%) to settle at $58.76 a barrel. Yesterday, it settled at $59.24, its highest front-month contract settlement since Sep 17. Feb Brent crude lost 62¢ (1%) to end at $63.72 a barrel. The EIA reported that US crude supplies edged up by 800K barrels last week. Analysts forecast a decrease of 2.8M barrels, though the API reported yesterday that US crude supplies rose 1.4M barrels last week.
The Fed announcement brought buyers into the market & the Dow shot up 100. But that enthusiasm did not last. There was no great surprise & the projection for no rate hike increases going forward was chilling. Meanwhile the USMCA & China trade deals are still fluid & they will dominate investor thinking tomorrow. Even with the Dow going flattish in the last month (see below), the chart still looks pretty good.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Federal Reserve unanimously voted to hold interest rates steady during its last policy meeting of the year, indicating that it's hitting pause on future action thru 2020. In a move that was widely expected, the FOMC, during its 2-day meeting this week, held the benchmark federal funds rate steady at 1.5-1.75%. So far this year, the Fed has made 3 minor interest rate cuts, part of what Chair Jerome Powell described as a “mid-cycle adjustment." Powell acknowledged in Oct that it would take a "really significant" rise in inflation above the Fed's preferred 2% benchmark before policymakers reversed course & returned to interest rate hikes. In their statement accompanying the decision, policymakers at the central bank projected that interest rates will remain unchanged thru 2020, though said they will continue to monitor conditions as they develop. “The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions & inflation near the Committee's symmetric 2% objective,” the statement said. "The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate," it added. The language reinforces previous Fed assessments that the economy is in a "good place" & will remain there if current conditions persist. The dot plot of individual members' future projections showed little chance of a rate cut or increase in 2020, with just 4 members anticipating the need for a qtr-point increase next year. A majority of officials saw the need for at least one rate hike in 2021. Policymakers again projected the economy to grow by a 2.2% annualized rate in 2019, followed by continuous, but modest, slower growth in the coming years: 2% in 2020 & 1.9% in 2021.
Fed to keep interest rates unchanged, signals no hikes through 2020
Yesterday Chinese soy importers bought at least 5 bulk cargo shipments of US soybeans (about 300K tonnes) for shipment in Jan & Feb after Beijing offered the buyers at least 1M tonnes in new tariff waivers, US exporters said. The fresh allotment of tariff waivers, which exempts importers from 30% tariffs on US shipments, comes after buyers used up nearly all of the 10M tonnes in waivers awarded by Beijing in Oct, the traders said. China has imposed steep tariffs on US soybeans & other agricultural products in retaliation for US duties on Chinese goods during a 17-month trade war that has disrupted global grain flows, rattled markets & weighed on global economic growth. The purchases (the largest in at least 2 weeks) according to Dept of Agriculture (USDA) data, came ahead of a Dec 15 deadline, when Pres Trump has said he would impose a new round of tariffs on Chinese goods. China said yesterday that it hoped to make a trade deal with the US as soon as possible before the new tariffs kick in. US soybean futures staged their strongest rally in 2 months yesterday, with the benchmark Jan contract climbing above the $9-per-bushel mark for the first time in 2 weeks. The fresh soybean sales bring China's total US purchases for the current Sep-Aug marketing year to around 10M tonnes, according to USDA data. That is well above the roughly 455K tonnes in commitments at the same point last year but considerably less than the 21.5M tonnes in sales on the books in early Dec 2017, before the trade war began. US soybean shipments to the world's top importer of the oilseed eroded as China turned to South American suppliers for more soybeans. But available soybean supplies from Brazil are running low ahead of the country's harvest, which typically ramps up in Jan or Feb. Beijing said on Fri it will waive import tariffs for some soybeans & pork shipments from the US but did not specify quantities.
China buys US soybeans after Beijing issues new tariff waivers: traders
The CEOs of America's biggest companies lowered their economic outlook for the 7th consecutive qtr as fears about the US-China trade war continued to rattle the country's top execs. The Business Roundtable's index of the CEO's economic outlook fell by 2.5 points in Q4 to 76.7, well below the historical average of 82.7, an indication of moderation in the pace of economic growth over the next 6 months. The organization, a nonprofit that represents 140 CEOs, projected the US economy will expand at a 2.1% annualized rate next year in its first forecast for 2020, in line with the Federal Reserve's estimates of 2% GDP growth. In dimming its forecast, the association cited tension between the US & its trading partners, as well as the manufacturing recession in the US. “There has been progress in several policy areas that has strengthened the U.S. economy from top to bottom, but more progress needs to be made on free and fair trade agreements,” said Jamie Dimon, JPMorgan Chase CEO & chairman of the Business Roundtable. The association's indices for sales & capital investment remained below historical averages. Sales ticked up slightly by 7 points to 98.6, while investment decreased by 8.9 points to 64.5. Hiring, meanwhile, decreased 5.5 points to 67.1, higher than its historical average. Yesterday, Dems signed off on a new trade deal with Canada & Mexico, handing Pres Trump a major victory on trade. But it’s still unclear whether the US intends to move forward with proposed tariffs against Chinese imports, set to take place Sun. Corp execs have been vocal opponents of the hundreds of Bs of $s in tariffs that have resulted from the trade war between the 2 large economies. “Because growth in trade-dependent jobs far outpaces job growth as a whole, we urge lawmakers to engage in more trade agreement negotiations and enact trade policies that preserve and strengthen an important pillar of the American economy,” Lance Fritz, CEO of Union Pacific, said. 48% of CEOs identified labor as the biggest cost pressure facing their companies, which they said reflected real wage growth for American workers & a healthy labor market fostered in part by the 2017 Tax Cuts & Jobs Act.
America's top CEOs lowering economic outlook
Home Depot's (HD), a Dow stock, disappointing preliminary outlook for fiscal-year 2020 indicates that its investment program to improve the customer shopping experience will put pressure on results in the coming year. Released ahead of the company's investor day, the guidance sent the stock lower. HD expects sales & same-store sales growth of about 3.5-4%. The consensus is for sales & same-store sales growth of 4.3%. The program, called “One Home Depot,” aims to create modern multiplatform shopping capabilities across both e-commerce & stores. The company will spend on store renovations, delivery & investment in the company's professional offerings. It launched the 3-year investment program in fiscal 2018. The home improvement retailer reiterated its fiscal 2019 guidance for sales growth of about 1.8%, same-store sales growth of 3.5% & EPS of $10.03. The stock dropped 3.88.
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’s investment plan weighs on fiscal 2020 outlook
Oil futures finished lower after gov data showed an unexpected climb in domestic supplies of crude oil, as well as sizable gains in gasoline & distillate stockpiles. Prices showed little reaction to the Federal Reserve's decision to hold its benchmark interest rate unchanged at 1.5-1.75%. Still, the central bank did offer a more upbeat view on the economy, which can boost prospects for oil demand. The central bank said “the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the FOMC’s symmetric 2% objective.” West Texas Intermediate crude for Jan delivery declined 48¢ (0.8%) to settle at $58.76 a barrel. Yesterday, it settled at $59.24, its highest front-month contract settlement since Sep 17. Feb Brent crude lost 62¢ (1%) to end at $63.72 a barrel. The EIA reported that US crude supplies edged up by 800K barrels last week. Analysts forecast a decrease of 2.8M barrels, though the API reported yesterday that US crude supplies rose 1.4M barrels last week.
Oil prices end lower after unexpected climb in weekly U.S. crude inventory data
The Fed announcement brought buyers into the market & the Dow shot up 100. But that enthusiasm did not last. There was no great surprise & the projection for no rate hike increases going forward was chilling. Meanwhile the USMCA & China trade deals are still fluid & they will dominate investor thinking tomorrow. Even with the Dow going flattish in the last month (see below), the chart still looks pretty good.
Dow Jones Industrials
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