Dow rose 58, decliners slightly ahead of advancers & NAZ inched up 2 after setting a record close over 9K yesterday. The MLP index fell 1+ to the 221 & the REIT index was fractionally higher in the 402s. Junk bond funds fluctuated & Treasuries were in demand. Oil slid lower in the 61s & gold added 2 to 1516 (more on both below).
AMJ (Alerian MLP Index tracking fund)
The US economy could be wrapped & tied with a big bow this year. This holiday season, for many, it means a job & potentially a bigger paycheck as wages start to inch higher. With more companies hiring workers to meet demand, investors are optimistic about the health of American corps & the future earning power of these businesses. That in turn, combined with pro-US trade deals that have come together in the latter ½ of the year, are helping drive the US stock market to record levels. Recently, White House economic adviser Larry Kudlow described the economy as “terrific.” “We are in a middle-class boom," he added. "Wage-earners, people on the production line are making faster wage increases than their managers. Average income nationwide is up $5K after-tax, in the prior 2 administrations it was flat” Since Pres Trump was elected, 7M jobs have been created, helping drive the unemployment rate down to 3.5%, a 50-year low. There are more job openings than unemployed people, meaning each individual could theoretically be working. Wages, which have been stagnant, are starting to perk up, albeit modestly, rising 3.1% year-over-year as of Nov, per the Bureau of Labor Statistics. Average hourly earnings are $28.29 with a week of take-home pay averaging $973 compared to $943 in Nov 2018. Stocks celebrate a year of records. The Dow is +22%, the S&P 500 +29% & the NAZ +35% for the year thru Dec 24, continuing to smash records in the shortened Christmas & forthcoming New Year's week. US equities have been described by some as the best neighborhood across the globe to park your money, especially with the US economy expected to see a tailwind in 2020. By comparison the FTSE 100, a benchmark of UK blue chips, has gained a lesser 13% & China's Heng Seng Index has risen just 8%.
Gold futures extended a climb toward its highest level in 8 weeks & its best weekly gain in 4 months, as weakness in the $ & demand for bullion heading into 2020 underpin prices. Gold for Feb delivery inched up 60¢ at $1515 an ounce, extending its climb toward the highest level since Oct 31. For the week, gold is on pace to rise 2.4%, which would represent its sharpest weekly climb since early Aug, on pace for its best week since August. The yellow metal has been gaining partly on the back of upbeat signs from the Sino-American trade war, with the US & China moving toward an apparent partial resolution — a potential positive sign for gold because China represents one of the biggest buyers of precious metals.
Oil prices rose, hitting 3-month highs, as upbeat economic data from China & the US indicated an end to the trade war between DC & Beijing has restored confidence in the global growth. Brent crude was up 29¢ (0.4%) at $68.21 a barrel & West Texas Intermediate was up 24¢ (0.4%) at $61.92 a barrel. Volume of oil trade remained thin in the Christmas holidays & New Year breaks. Data today showed profits at China's industrial firms rose at the fastest pace in 8 months in Nov. Among sectors, the chemical, petroleum processing & steel industries reported recovering profits last month due to rebounding market demand & rising prices amid easing trade hostilities with DC. China & the US cooled their 17-month long trade war earlier this month, announcing a Phase 1 agreement that would reduce some US tariffs in exchange for more Chinese purchases of American farm products. The lingering ripple effect of the trade row, however, showed up in data from Japan, the world's 3rd-biggest economy, today as industrial output in Nov shrank for a 2nd month. In the US, a survey yesterday showed that online holiday purchases by US consumers reached a record, beating expectations & sending US stocks to fresh highs. US crude oil stockpiles likely declined last week, while inventories of gasoline were set to extend their build for the 7th straight week. The latest poll was conducted ahead of the weekly status report from the Energy Information Administration (EIA), an agency of the Dept of Energy. The price Brent has jumped more than a qtr in 2019, while WTI is up around 35%, boosted by moves by OPEC & other producers, including Russia, to curb production. OPEC+ this month decided to prolong its oil output restriction deal until the end of Mar & to deepen the cuts in order to balance out the oil market. Russian Energy Minister Alexander Novak said today OPEC+, may consider wrapping up their oil output reduction in 2020.
Not much going on with thin trading. The stock market has had an outstanding year which will be difficult to replicate in 2020. However, election years are generally good to investors
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 61.33 | -0.35 | -0.6% |
| GC=F | Gold | 1,516.60 | +2.20 | +0.2% |
The US economy could be wrapped & tied with a big bow this year. This holiday season, for many, it means a job & potentially a bigger paycheck as wages start to inch higher. With more companies hiring workers to meet demand, investors are optimistic about the health of American corps & the future earning power of these businesses. That in turn, combined with pro-US trade deals that have come together in the latter ½ of the year, are helping drive the US stock market to record levels. Recently, White House economic adviser Larry Kudlow described the economy as “terrific.” “We are in a middle-class boom," he added. "Wage-earners, people on the production line are making faster wage increases than their managers. Average income nationwide is up $5K after-tax, in the prior 2 administrations it was flat” Since Pres Trump was elected, 7M jobs have been created, helping drive the unemployment rate down to 3.5%, a 50-year low. There are more job openings than unemployed people, meaning each individual could theoretically be working. Wages, which have been stagnant, are starting to perk up, albeit modestly, rising 3.1% year-over-year as of Nov, per the Bureau of Labor Statistics. Average hourly earnings are $28.29 with a week of take-home pay averaging $973 compared to $943 in Nov 2018. Stocks celebrate a year of records. The Dow is +22%, the S&P 500 +29% & the NAZ +35% for the year thru Dec 24, continuing to smash records in the shortened Christmas & forthcoming New Year's week. US equities have been described by some as the best neighborhood across the globe to park your money, especially with the US economy expected to see a tailwind in 2020. By comparison the FTSE 100, a benchmark of UK blue chips, has gained a lesser 13% & China's Heng Seng Index has risen just 8%.
US economy is Christmas gift on track to keep on giving in 2020
Gold futures extended a climb toward its highest level in 8 weeks & its best weekly gain in 4 months, as weakness in the $ & demand for bullion heading into 2020 underpin prices. Gold for Feb delivery inched up 60¢ at $1515 an ounce, extending its climb toward the highest level since Oct 31. For the week, gold is on pace to rise 2.4%, which would represent its sharpest weekly climb since early Aug, on pace for its best week since August. The yellow metal has been gaining partly on the back of upbeat signs from the Sino-American trade war, with the US & China moving toward an apparent partial resolution — a potential positive sign for gold because China represents one of the biggest buyers of precious metals.
Gold’s 4th straight positive session puts it on track for best week since August
Oil prices rose, hitting 3-month highs, as upbeat economic data from China & the US indicated an end to the trade war between DC & Beijing has restored confidence in the global growth. Brent crude was up 29¢ (0.4%) at $68.21 a barrel & West Texas Intermediate was up 24¢ (0.4%) at $61.92 a barrel. Volume of oil trade remained thin in the Christmas holidays & New Year breaks. Data today showed profits at China's industrial firms rose at the fastest pace in 8 months in Nov. Among sectors, the chemical, petroleum processing & steel industries reported recovering profits last month due to rebounding market demand & rising prices amid easing trade hostilities with DC. China & the US cooled their 17-month long trade war earlier this month, announcing a Phase 1 agreement that would reduce some US tariffs in exchange for more Chinese purchases of American farm products. The lingering ripple effect of the trade row, however, showed up in data from Japan, the world's 3rd-biggest economy, today as industrial output in Nov shrank for a 2nd month. In the US, a survey yesterday showed that online holiday purchases by US consumers reached a record, beating expectations & sending US stocks to fresh highs. US crude oil stockpiles likely declined last week, while inventories of gasoline were set to extend their build for the 7th straight week. The latest poll was conducted ahead of the weekly status report from the Energy Information Administration (EIA), an agency of the Dept of Energy. The price Brent has jumped more than a qtr in 2019, while WTI is up around 35%, boosted by moves by OPEC & other producers, including Russia, to curb production. OPEC+ this month decided to prolong its oil output restriction deal until the end of Mar & to deepen the cuts in order to balance out the oil market. Russian Energy Minister Alexander Novak said today OPEC+, may consider wrapping up their oil output reduction in 2020.
Oil hits three-month highs on upbeat economic data
Not much going on with thin trading. The stock market has had an outstanding year which will be difficult to replicate in 2020. However, election years are generally good to investors
Dow Jones Industrials
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