Dow went up 20, advancers over decliners about 5-4 & NAZ gained 223. The MLP index rose 3+ to the 208s (still depressed) & the REIT index fell 2+ to the 402s. Junk bond funds hardly budged & Treasuries dipped lower in price. Oil inched higher in the 59s & gold added 3 to 1468.
AMJ (Alerian MLP Index tracking fund)
US & Chinese trade negotiations are laying the groundwork for a delay of a fresh round of tariffs set to kick in on Sun, according to officials on both sides, as they continue to haggle over how to get Beijing to commit to massive purchases of US farm products Pres Trump is insisting on for a near-term deal. In recent days, officials in both Beijing & DC have signaled that Sun is not the final date for reaching a phase-one deal -- even though that is the date Pres Trump has set for tariffs to increase on $165B of Chinese goods. That date could be extended, as has happened several times when the 2 sides thought they were on the verge of a deal. Those prior deals, though, never held & tariffs continued to mount. Chinese & US. officials involved in the talks say they don't have a hard deadline. On Fri, White House economic adviser Larry Kudlow said on 2 television appearances that there were “no arbitrary deadlines.” Such remarks from Kudlow, especially when they are restated several times, often reflect Trump's views & have been echoed privately by other US officials. With both sides hinting that negotiations could be extended beyond Dec 15, Trump himself has gone back & forth in his public remarks between threatening a prolonged trade battle & trying to calm jittery investors. White House adviser Jared Kushner has recently become involved in trying to help the 2 sides reach a trade agreement. At a Mon meeting, Kushner said the talks are “heading in a good direction.” Asked if Trump would follow thru with more tariffs on Dec 15, Kushner said: “I don’t know what his decision will be.” Pres Trump, however, hasn't yet made his decision, & he has overridden his advisers on trade several times to add tariffs. The talks are dragging on. Working-level negotiators talk on most days, but as of Fri, lead negotiators on both sides hadn't spoken for 10 days. Trade Representative Robert Lighthizer has been tied up trying to get Mexico to agree to terms on the US-Mexico-Canada Agreement. The biggest holdup in the US-China negotiations is DC's demand that China guarantee its pledge to buy more American soybeans, poultry & other agricultural products.
The US, Mexico & Canada have reached a historic trade deal. "There is no question, of course, that this trade agreement is much better than NAFTA," House Speaker Nancy Pelosi said at a press conference announcing her caucus's support of the agreement. Major US stock indices turned positive after the announcement. Trade Representative Robert Lighthizer & Senior White House Adviser Jared Kushner & Canadian Deputy Prime Minister Chrystia Freeland are expected to be in Mexico City on Tues for a signing ceremony. The deal must now be ratified by all 3 countries. A House vote will occur next week. USMCA "will be the best and most important trade deal ever made by the USA," Pres Trump tweeted. 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. The deal was endorsed by the AFL-CIO labor union. USMCA is expected to create “north of 176,000 new jobs” & inject $34B into the US auto industry, Commerce Secretary Wilbur Ross said. He added that as many as 589K new jobs could be created within 5 years. “Every day that it isn't approved is a day delayed and the benefits to America," Ross added.
The US gov deficit spiked 12% to $342B during the first 2 months of fiscal year 2020, according to data from the Congressional Budget Office. The CBO says the US budget deficit will average $1.2T a year from 2020-2029, amounting to 4.4-4.8% of GDP. During Oct & Nov, revenue rose 3% from a year ago to $471B. Receipts from individual & payroll taxes climbed 4% ($17B) while receipts from corp income taxes were up 14% ($1B). Receipts from other sources, such as excise taxes & customs duties, fell 11% ($5B). Meanwhile, expenditures rose 6% to $813B during the first 2 months of the fiscal year, which runs from Oct-Sep. Spending on mandatory programs, such as Social Security, Medicare & Medicaid, was up $22B (7%). Outlays for military programs of the Department of Defense climbed 7% ($8B), while Dept of Education spending climbed $3B (25%). The federal deficit was $587B when Pres Trump took office in Jan 2017 & had ballooned to $984B in 2019. The national debt is now more than $23.1T, according to usdebtclock,org.
The USMCA deal finally appears to moving forward. But after all the fits & starts, traders are not impressed. After all, it has not been fully signed off. If it is finally approved, it will be a very big boost for the US economy. Meanwhile the China trade deals is lumbering forward. Maybe, soon!! There should be more news on both deals later today.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 59.10 | +0.08 | +0.1% |
| GC=F | Gold | 1,469.30 | +4.40 | +0.3% |
US & Chinese trade negotiations are laying the groundwork for a delay of a fresh round of tariffs set to kick in on Sun, according to officials on both sides, as they continue to haggle over how to get Beijing to commit to massive purchases of US farm products Pres Trump is insisting on for a near-term deal. In recent days, officials in both Beijing & DC have signaled that Sun is not the final date for reaching a phase-one deal -- even though that is the date Pres Trump has set for tariffs to increase on $165B of Chinese goods. That date could be extended, as has happened several times when the 2 sides thought they were on the verge of a deal. Those prior deals, though, never held & tariffs continued to mount. Chinese & US. officials involved in the talks say they don't have a hard deadline. On Fri, White House economic adviser Larry Kudlow said on 2 television appearances that there were “no arbitrary deadlines.” Such remarks from Kudlow, especially when they are restated several times, often reflect Trump's views & have been echoed privately by other US officials. With both sides hinting that negotiations could be extended beyond Dec 15, Trump himself has gone back & forth in his public remarks between threatening a prolonged trade battle & trying to calm jittery investors. White House adviser Jared Kushner has recently become involved in trying to help the 2 sides reach a trade agreement. At a Mon meeting, Kushner said the talks are “heading in a good direction.” Asked if Trump would follow thru with more tariffs on Dec 15, Kushner said: “I don’t know what his decision will be.” Pres Trump, however, hasn't yet made his decision, & he has overridden his advisers on trade several times to add tariffs. The talks are dragging on. Working-level negotiators talk on most days, but as of Fri, lead negotiators on both sides hadn't spoken for 10 days. Trade Representative Robert Lighthizer has been tied up trying to get Mexico to agree to terms on the US-Mexico-Canada Agreement. The biggest holdup in the US-China negotiations is DC's demand that China guarantee its pledge to buy more American soybeans, poultry & other agricultural products.
US and Chinese trade negotiators hint at breakthrough
The US, Mexico & Canada have reached a historic trade deal. "There is no question, of course, that this trade agreement is much better than NAFTA," House Speaker Nancy Pelosi said at a press conference announcing her caucus's support of the agreement. Major US stock indices turned positive after the announcement. Trade Representative Robert Lighthizer & Senior White House Adviser Jared Kushner & Canadian Deputy Prime Minister Chrystia Freeland are expected to be in Mexico City on Tues for a signing ceremony. The deal must now be ratified by all 3 countries. A House vote will occur next week. USMCA "will be the best and most important trade deal ever made by the USA," Pres Trump tweeted. 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. The deal was endorsed by the AFL-CIO labor union. USMCA is expected to create “north of 176,000 new jobs” & inject $34B into the US auto industry, Commerce Secretary Wilbur Ross said. He added that as many as 589K new jobs could be created within 5 years. “Every day that it isn't approved is a day delayed and the benefits to America," Ross added.
Historic USMCA trade deal is done
The US gov deficit spiked 12% to $342B during the first 2 months of fiscal year 2020, according to data from the Congressional Budget Office. The CBO says the US budget deficit will average $1.2T a year from 2020-2029, amounting to 4.4-4.8% of GDP. During Oct & Nov, revenue rose 3% from a year ago to $471B. Receipts from individual & payroll taxes climbed 4% ($17B) while receipts from corp income taxes were up 14% ($1B). Receipts from other sources, such as excise taxes & customs duties, fell 11% ($5B). Meanwhile, expenditures rose 6% to $813B during the first 2 months of the fiscal year, which runs from Oct-Sep. Spending on mandatory programs, such as Social Security, Medicare & Medicaid, was up $22B (7%). Outlays for military programs of the Department of Defense climbed 7% ($8B), while Dept of Education spending climbed $3B (25%). The federal deficit was $587B when Pres Trump took office in Jan 2017 & had ballooned to $984B in 2019. The national debt is now more than $23.1T, according to usdebtclock,org.
US deficit explodes over two month period
The USMCA deal finally appears to moving forward. But after all the fits & starts, traders are not impressed. After all, it has not been fully signed off. If it is finally approved, it will be a very big boost for the US economy. Meanwhile the China trade deals is lumbering forward. Maybe, soon!! There should be more news on both deals later today.
Dow Jones Industrials
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