Dow shot up 337 (close to session highs), advancers over decliners better than 3-1 & NAZ rose 85. The MLP index added 1+ to the 199s & the REIT index gained 1+ to the 405s. Junk bond funds did little & Treasuries were weak all day. Oil went up to 58 as OPEC agreed to extend production cuts next year (more below) & gold dropped 18 to 1464.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
OPEC members & ally Russia have tentatively agreed to cut oil production by 500K barrels per day. OPEC would remove 340K barrels while non-OPEC producers, including Russia, would cut production by 160K barrels. A sticking point in the talks had been how to split the cuts between producers. Expanding on previous reductions, the agreement would remove a total of 1.7M barrels a day (about 1.7% of global supply). The decision came after long discussions at the OPEC headquarters in Vienna. The group's goal is to support the price of energy, but they don't want to lose global market share to the US, which keeps pumping more oil. “We have decided to reduce production by 500,000 barrels a day through the first quarter of next year,” said Russian energy minister Alexander Novak. Saudi Arabia has been bearing the burden of the largest share of production cuts recently, but some countries have been producing more than expected. Analysts note that if countries are already not complying with the current agreement, voting for more cuts might be pointless. Brent crude oil, the intl benchmark, gained 2% to $64.65 per barrel after the cuts were reported, while West Texas Intermediate crude oil rose 2% to $59.58. Oil prices were trading at their highest levels in more than 2 months ahead of the decision. The decision comes after the oil cartel agreed in Jul to a 9-month extension of production cuts that began in Jan 2017, when oil prices were about 10% below current levels. OPEC & allies have been caught flat-footed by the US shale revolution. The US passed Saudi Arabia as the world's top oil producer in 2018, as companies increased fracking of shale deposits, extracting crude that was previously inaccessible. The Energy Information Administration last month raised its 2020 production forecast by 119K barrels to 13.29M barrels each day. Last month, OPEC released its World Oil Outlook, which projects total primary energy demand will grow by 25% between 2018 & 2040, with oil demand reaching 110.6M barrels each day. Demand will grow by 21.4M barrels in emerging markets while decreasing by 9.6M barrels in developed nations, the report said. The next OPEC meeting is scheduled for Mar 5 & members will meet with their non-member allies the next day.
House Minority Leader Kevin McCarthy predicted that Congress will pass the North American Free Trade Agreement replacement by the end of the year, despite Dems' focus on impeaching Pres Trump. “I actually believe we get USMCA done,” the California Rep said referring to the US-Mexico-Canada Agreement, which would supplant NAFTA, now 25 years old. “I do expect it to come.” In addition to Reps on Capitol Hill, top administration officials have also been pushing House Speaker Nancy Pelosi to allow a ratification vote by the end of the year. The USMCA, agreed to by all 3 nations in Oct 2018, is regarded as one of the administration's key economic accomplishments to date. Positive indications were made in mid-Nov when Pelosi said that final agreement on the deal was "imminent." Days later, though, she said there may not be time to finish negotiations before 2020. House Dems have a lot on their plates before the planned Dec 20 holiday recess. The Judiciary Committee scheduled a hearing Mon on the evidence gathered in the Trump impeachment inquiry after Pelosi yesterday told the House committees investigating the pres to proceed with impeachment articles. As time dwindles, an increasing number of Reps have accused Dems of disregarding economic policy as they move forward with impeachment. Today McCarthy accused Pelosi of prioritizing the impeachment inquiry & jeopardizing the US' growth by not calling a vote on USMCA. “She’s more concerned with maybe tearing down this president instead of building this country up,” he added. “She has given everything to impeachment.” Senate Majority Leader Mitch McConnell made similar comments in Nov. “If the House cannot pass the USMCA this year, there is no way they’ll be able to claim the people’s business has not taken a backseat to impeachment,” he said. Pelosi has repeatedly said she believes the House can legislate & carry out the impeachment inquiry at the same time.
House GOP leader says ‘we get USMCA done’ this year despite Dem focus
Consumer borrowing accelerated in Oct by the 2nd highest rate this year, according to Federal Reserve data. Total consumer credit increased $18.9B, up from $9.6B in the prior month. That's an annual growth rate of 5.5%, which was surpassed only by Jul's 6.9% gain, which was boosted by Amazon's Prime Day promotion. The forecast called for a $15B gain in Oct. Revolving credit, like credit cards, rose at a 8.8% rate in Oct. And credit-card use in Sep was also revised higher. Nonrevolving credit, typically auto & student loans, rose 4.3% in Oct. Nonrevolving credit is much less volatile than credit-card use. The Fed's data does not include mortgage loans. Consumers remain the key to the economic outlook given the sluggish business spending. Economists will be watching closely to see if the improvement in the labor markets in Nov coincided with increased spending.
Stocks came roaring out of the gate today & maintained elevated levels all day, The bulls were happy to see the Dow shoot up to the important 28K level at the start of trade & hold there. The jobs report was that good. But next week progress on the China trade (& USMCA) along with the Fed meeting at mid week will affect markets' behavior. USMCA has not received a lot of attention, but those 2 countries are important trading partners for the US.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
OPEC members & ally Russia have tentatively agreed to cut oil production by 500K barrels per day. OPEC would remove 340K barrels while non-OPEC producers, including Russia, would cut production by 160K barrels. A sticking point in the talks had been how to split the cuts between producers. Expanding on previous reductions, the agreement would remove a total of 1.7M barrels a day (about 1.7% of global supply). The decision came after long discussions at the OPEC headquarters in Vienna. The group's goal is to support the price of energy, but they don't want to lose global market share to the US, which keeps pumping more oil. “We have decided to reduce production by 500,000 barrels a day through the first quarter of next year,” said Russian energy minister Alexander Novak. Saudi Arabia has been bearing the burden of the largest share of production cuts recently, but some countries have been producing more than expected. Analysts note that if countries are already not complying with the current agreement, voting for more cuts might be pointless. Brent crude oil, the intl benchmark, gained 2% to $64.65 per barrel after the cuts were reported, while West Texas Intermediate crude oil rose 2% to $59.58. Oil prices were trading at their highest levels in more than 2 months ahead of the decision. The decision comes after the oil cartel agreed in Jul to a 9-month extension of production cuts that began in Jan 2017, when oil prices were about 10% below current levels. OPEC & allies have been caught flat-footed by the US shale revolution. The US passed Saudi Arabia as the world's top oil producer in 2018, as companies increased fracking of shale deposits, extracting crude that was previously inaccessible. The Energy Information Administration last month raised its 2020 production forecast by 119K barrels to 13.29M barrels each day. Last month, OPEC released its World Oil Outlook, which projects total primary energy demand will grow by 25% between 2018 & 2040, with oil demand reaching 110.6M barrels each day. Demand will grow by 21.4M barrels in emerging markets while decreasing by 9.6M barrels in developed nations, the report said. The next OPEC meeting is scheduled for Mar 5 & members will meet with their non-member allies the next day.
OPEC, allies agree to boost oil prices with production cut
House Minority Leader Kevin McCarthy predicted that Congress will pass the North American Free Trade Agreement replacement by the end of the year, despite Dems' focus on impeaching Pres Trump. “I actually believe we get USMCA done,” the California Rep said referring to the US-Mexico-Canada Agreement, which would supplant NAFTA, now 25 years old. “I do expect it to come.” In addition to Reps on Capitol Hill, top administration officials have also been pushing House Speaker Nancy Pelosi to allow a ratification vote by the end of the year. The USMCA, agreed to by all 3 nations in Oct 2018, is regarded as one of the administration's key economic accomplishments to date. Positive indications were made in mid-Nov when Pelosi said that final agreement on the deal was "imminent." Days later, though, she said there may not be time to finish negotiations before 2020. House Dems have a lot on their plates before the planned Dec 20 holiday recess. The Judiciary Committee scheduled a hearing Mon on the evidence gathered in the Trump impeachment inquiry after Pelosi yesterday told the House committees investigating the pres to proceed with impeachment articles. As time dwindles, an increasing number of Reps have accused Dems of disregarding economic policy as they move forward with impeachment. Today McCarthy accused Pelosi of prioritizing the impeachment inquiry & jeopardizing the US' growth by not calling a vote on USMCA. “She’s more concerned with maybe tearing down this president instead of building this country up,” he added. “She has given everything to impeachment.” Senate Majority Leader Mitch McConnell made similar comments in Nov. “If the House cannot pass the USMCA this year, there is no way they’ll be able to claim the people’s business has not taken a backseat to impeachment,” he said. Pelosi has repeatedly said she believes the House can legislate & carry out the impeachment inquiry at the same time.
House GOP leader says ‘we get USMCA done’ this year despite Dem focus
Consumer borrowing accelerated in Oct by the 2nd highest rate this year, according to Federal Reserve data. Total consumer credit increased $18.9B, up from $9.6B in the prior month. That's an annual growth rate of 5.5%, which was surpassed only by Jul's 6.9% gain, which was boosted by Amazon's Prime Day promotion. The forecast called for a $15B gain in Oct. Revolving credit, like credit cards, rose at a 8.8% rate in Oct. And credit-card use in Sep was also revised higher. Nonrevolving credit, typically auto & student loans, rose 4.3% in Oct. Nonrevolving credit is much less volatile than credit-card use. The Fed's data does not include mortgage loans. Consumers remain the key to the economic outlook given the sluggish business spending. Economists will be watching closely to see if the improvement in the labor markets in Nov coincided with increased spending.
October consumer credit expands at second strongest monthly rate this year
Stocks came roaring out of the gate today & maintained elevated levels all day, The bulls were happy to see the Dow shoot up to the important 28K level at the start of trade & hold there. The jobs report was that good. But next week progress on the China trade (& USMCA) along with the Fed meeting at mid week will affect markets' behavior. USMCA has not received a lot of attention, but those 2 countries are important trading partners for the US.
Dow Jones Industrials
No comments:
Post a Comment