Dow was up 76 (at the days' high), advancers over decliners almost 2-1 & NAZ rose 26, The MLP index was little changed in the 216s. & the REIT index rose 2 to 405. Junk bond funds inched higher & Treasuries remained weak (more below). Oil slid lower in the 61s & gold added 2 to 1521 (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)
Negotiators from the US & China are set to resume trade discussions next week in DC, & they could be forced to broach a touchy subject when the talks resume – the pro-democracy protests in Hong Kong. The protests, which have stretched into their 17th week, reached a new level of chaos today, when an officer shot a demonstrator in the chest at close range, leaving him in critical condition. It was the first shooting to occur during the protests. “It probably will have some impact on the Chinese side, even despite whatever it has on ours, because this is a sign of domestic dissent within their community and Hong Kong is quite important for the international trading activities of China,” said Commerce Secretary Wilbur Ross. Trade discussions are set to resume shortly after China’s Golden Week holiday, when Chinese Vice Premier Liu He is scheduled to travel to DC. There has been a recent de-escalation of the trade war, but a deal has remained elusive. Last month, the US said it was postponing raising the tariffs on Chinese goods to Oct 15 out of respect for China's holiday. Beijing responded by exempting US pork & soybeans from additional tariffs. Still, the trade war looks likely to intensify in the near term. On Sun, NAZ could crack down on Chinese companies listing on its exchange by tightening restrictions & slowing down on their approvals. It is unclear if such action would be a trade-war weapon or more to protect investors from the low liquidity of those shares. “The president has indicated he wants a complete deal,” Ross said. “If all we wanted was to sell just a few more products to them, we could’ve had that deal two and a half years ago. The president wants that, but he most importantly wants to resolve the structural issues. The issues of forced intellectual property transfers, the issue of subsidy of SOEs, the disrespect for intellectual property, the whole panoply of equal market access complaints that we’ve had over the years. Without those, it isn’t really a very satisfactory arrangement.”
The 10-year Treasury yield posted its biggest decline in 8 years despite a year-end rebound that's softened the retreat. The yield on the benchmark Treasury note has risen about 14 basis points in Dec to1.92%, but it's still down 76 basis points on the year, its biggest annual drop since 2011. Bond yields move inversely to prices. Today the yield on the 10-year Treasury note climbed about 2 basis points, while the yield on the 30-year Treasury note rose 4 basis points to about 2.38%. US rates started 2019 in a downward spiral as investors fled risk assets & flocked to safety amid an escalated US-China trade war & deteriorating economic data. Adding to rates' downward pressure was the anticipation that the Federal Reserve will lower borrowing costs to combat a slowing economy. The central bank embarked on what it characterized as a “mid-cycle adjustment,” cutting borrowing costs 3 straight times, which further pushed rates down. Over the summer, the yield on 10-year Treasuries dipped below those on 2-year securities for the first time since before the financial crisis in 2007, an unusual phenomenon called yield-curve inversion that preceded previous recessions. US gov debt yields started to rise across the board in Sep after the US & China agreed on a truce in their tariff war & started to negotiate a deal. Investors began taking on more risk on the back of the optimism over U.S.-China trade relations. At the same time, economic data in the US & overseas showed signs of improvement, which sparked a rally in yields. In Dec, the 10-year Treasury yield posted its biggest monthly climb since Sep after the world's 2 largest economies agreed earlier this month to a “phase one” trade deal. Pres Trump saidtoday he will sign the deal with high-level Chinese representatives at the White House on Jan 15. For 2020, many expect rates continue to rebound amid an improving economic outlook.
Treasury yields end the year off the lows, but still down big for 2019
White House trade advisor Peter Navarro today predicted the Dow will hit “at least” 32K in 2020. That would be 12.4% higher than yesterday'’s close. “I’m looking forward to a great 2020,” Navarro said. “Forecast-wise, I’m seeing closer to 3% real GDP growth than 2%. I’m seeing at least 32,000 on the Dow.” In Q3, US economic growth increased at a 2,1% annual rate. The Dow, which yesterday at 28,462, was up more than 55% since Pres Trump won the 2016 election. “It’s going to be the roaring 2020s next year,” Navarro said. ”[Dow] 32,000 is a conservative estimate of where we’ll be at the end of the year.” Trump is running his 2020 reelection campaign on his stock market & economic track record. Navarro pointed to a handful of signs of a stronger economy ahead, despite concerns of a slowdown, including low unemployment, rising consumer optimism & rising wages. Additionally, he cited ongoing trade progress. The “phase one” trade deal between the US & China is a certainty at this point, Navarro said, adding the accord is “in the bank.” He also alluded to potential trade priorities for the Trump administration in 2020, including a new deal with a post-Brexit UK & other countries. “Next year, 2020, we’re going to try to get something going with Great Britain, Vietnam, Europe and anybody else who wants to fairly trade with the United States of America,” Navarro added. He has long believed that the Dow would be on a tear with Trump in the White House .On day after Trump was elected, Navarro said it was “a very bullish thing for the markets” & predicted Dow 25K during the Trump presidency, a 38% increase from then-current levels around 18K. The Dow is up 22% for this year alone. The S&P 500 broader market measure is tracking for its best year since 2013, with a 28.5% advance for 2019.
Peter Navarro sees ‘at least’ Dow 32,000 in 2020 and US economic growth closer to 3%
Gold futures ended 2019 at the highest level since late Sep, after a strong rally for the precious metal produced the largest return in nearly a decade, despite a rally in equity indices also. Gold for Feb delivery rose $4.50 (0.3%) at $1523 an ounce. The day’s move helped gold log an 18.9% return for 2019 since the end of last year. Based on trade in most-active futures contracts, that would be the strongest performance for the yellow metal since 2010, when gold rose 29.7%. For the month, gold has gained about 3.4% in Dec & during the qtr. Investors also were keeping an eye on developments in Iraq, where dozens of Iraqi Shiite militiamen & their supporters broke into the US Embassy compound in Baghdad, part of a backlash over weekend US airstrikes that targeted the Iran-backed militia. But back on the home front, confidence in the US economy was higher at the end of 2019 than at the beginning, according to a new reading of the Conference Board's index, even though future expectations are for economic growth to be flat in H1-2020. Optimism about the ability of American consumers to help extend a record economic expansion has played a role in propelling US stocks to fresh highs in Dec. Optimism about a partial US-China trade pact also has helped. Pres Trump today said the first phase of a trade deal will be signed on Jan. 15 & & that he will travel to China “at a later date” to begin the 2nd round of talks.
Buyers returned in the PM & the late day rally brought the Dow into the black, a fitting way to end an outstanding year,
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Negotiators from the US & China are set to resume trade discussions next week in DC, & they could be forced to broach a touchy subject when the talks resume – the pro-democracy protests in Hong Kong. The protests, which have stretched into their 17th week, reached a new level of chaos today, when an officer shot a demonstrator in the chest at close range, leaving him in critical condition. It was the first shooting to occur during the protests. “It probably will have some impact on the Chinese side, even despite whatever it has on ours, because this is a sign of domestic dissent within their community and Hong Kong is quite important for the international trading activities of China,” said Commerce Secretary Wilbur Ross. Trade discussions are set to resume shortly after China’s Golden Week holiday, when Chinese Vice Premier Liu He is scheduled to travel to DC. There has been a recent de-escalation of the trade war, but a deal has remained elusive. Last month, the US said it was postponing raising the tariffs on Chinese goods to Oct 15 out of respect for China's holiday. Beijing responded by exempting US pork & soybeans from additional tariffs. Still, the trade war looks likely to intensify in the near term. On Sun, NAZ could crack down on Chinese companies listing on its exchange by tightening restrictions & slowing down on their approvals. It is unclear if such action would be a trade-war weapon or more to protect investors from the low liquidity of those shares. “The president has indicated he wants a complete deal,” Ross said. “If all we wanted was to sell just a few more products to them, we could’ve had that deal two and a half years ago. The president wants that, but he most importantly wants to resolve the structural issues. The issues of forced intellectual property transfers, the issue of subsidy of SOEs, the disrespect for intellectual property, the whole panoply of equal market access complaints that we’ve had over the years. Without those, it isn’t really a very satisfactory arrangement.”
Hong Kong protests could impact trade talks
The 10-year Treasury yield posted its biggest decline in 8 years despite a year-end rebound that's softened the retreat. The yield on the benchmark Treasury note has risen about 14 basis points in Dec to1.92%, but it's still down 76 basis points on the year, its biggest annual drop since 2011. Bond yields move inversely to prices. Today the yield on the 10-year Treasury note climbed about 2 basis points, while the yield on the 30-year Treasury note rose 4 basis points to about 2.38%. US rates started 2019 in a downward spiral as investors fled risk assets & flocked to safety amid an escalated US-China trade war & deteriorating economic data. Adding to rates' downward pressure was the anticipation that the Federal Reserve will lower borrowing costs to combat a slowing economy. The central bank embarked on what it characterized as a “mid-cycle adjustment,” cutting borrowing costs 3 straight times, which further pushed rates down. Over the summer, the yield on 10-year Treasuries dipped below those on 2-year securities for the first time since before the financial crisis in 2007, an unusual phenomenon called yield-curve inversion that preceded previous recessions. US gov debt yields started to rise across the board in Sep after the US & China agreed on a truce in their tariff war & started to negotiate a deal. Investors began taking on more risk on the back of the optimism over U.S.-China trade relations. At the same time, economic data in the US & overseas showed signs of improvement, which sparked a rally in yields. In Dec, the 10-year Treasury yield posted its biggest monthly climb since Sep after the world's 2 largest economies agreed earlier this month to a “phase one” trade deal. Pres Trump saidtoday he will sign the deal with high-level Chinese representatives at the White House on Jan 15. For 2020, many expect rates continue to rebound amid an improving economic outlook.
Treasury yields end the year off the lows, but still down big for 2019
White House trade advisor Peter Navarro today predicted the Dow will hit “at least” 32K in 2020. That would be 12.4% higher than yesterday'’s close. “I’m looking forward to a great 2020,” Navarro said. “Forecast-wise, I’m seeing closer to 3% real GDP growth than 2%. I’m seeing at least 32,000 on the Dow.” In Q3, US economic growth increased at a 2,1% annual rate. The Dow, which yesterday at 28,462, was up more than 55% since Pres Trump won the 2016 election. “It’s going to be the roaring 2020s next year,” Navarro said. ”[Dow] 32,000 is a conservative estimate of where we’ll be at the end of the year.” Trump is running his 2020 reelection campaign on his stock market & economic track record. Navarro pointed to a handful of signs of a stronger economy ahead, despite concerns of a slowdown, including low unemployment, rising consumer optimism & rising wages. Additionally, he cited ongoing trade progress. The “phase one” trade deal between the US & China is a certainty at this point, Navarro said, adding the accord is “in the bank.” He also alluded to potential trade priorities for the Trump administration in 2020, including a new deal with a post-Brexit UK & other countries. “Next year, 2020, we’re going to try to get something going with Great Britain, Vietnam, Europe and anybody else who wants to fairly trade with the United States of America,” Navarro added. He has long believed that the Dow would be on a tear with Trump in the White House .On day after Trump was elected, Navarro said it was “a very bullish thing for the markets” & predicted Dow 25K during the Trump presidency, a 38% increase from then-current levels around 18K. The Dow is up 22% for this year alone. The S&P 500 broader market measure is tracking for its best year since 2013, with a 28.5% advance for 2019.
Peter Navarro sees ‘at least’ Dow 32,000 in 2020 and US economic growth closer to 3%
Gold futures ended 2019 at the highest level since late Sep, after a strong rally for the precious metal produced the largest return in nearly a decade, despite a rally in equity indices also. Gold for Feb delivery rose $4.50 (0.3%) at $1523 an ounce. The day’s move helped gold log an 18.9% return for 2019 since the end of last year. Based on trade in most-active futures contracts, that would be the strongest performance for the yellow metal since 2010, when gold rose 29.7%. For the month, gold has gained about 3.4% in Dec & during the qtr. Investors also were keeping an eye on developments in Iraq, where dozens of Iraqi Shiite militiamen & their supporters broke into the US Embassy compound in Baghdad, part of a backlash over weekend US airstrikes that targeted the Iran-backed militia. But back on the home front, confidence in the US economy was higher at the end of 2019 than at the beginning, according to a new reading of the Conference Board's index, even though future expectations are for economic growth to be flat in H1-2020. Optimism about the ability of American consumers to help extend a record economic expansion has played a role in propelling US stocks to fresh highs in Dec. Optimism about a partial US-China trade pact also has helped. Pres Trump today said the first phase of a trade deal will be signed on Jan. 15 & & that he will travel to China “at a later date” to begin the 2nd round of talks.
Gold prices end 2019 at 14-week high and notch strongest year since 2010
Buyers returned in the PM & the late day rally brought the Dow into the black, a fitting way to end an outstanding year,
Best Wishes to all for an outstanding year!!
Dow Jones Industrials
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