Dow advanced 96, advancers over decliners about 5-4 & NAZ gained 20. The MLP index added 2+ to 220 (2 month high) & the REIT index fell 3 to the 399s. Junk bond funds hardly budged in price & Treasuries drifted lower during today's stock rally. Oil crawled higher above 60 & gold gained 9 to 1489 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Orders to US factories for big-ticket manufactured goods fell by the largest amount in 6 months, led by a large decrease in orders for defense aircraft & parts. A closely watched category that tracks business investment ticked up 0.1%. Orders for durable goods fell 2% last month, the biggest decline since May, the Commerce Dept said. Orders have fallen in 2 of the past 3 months. Oct's number was revised down to 0.2% from a 0.6% gain. Transportation equipment orders fell 5.9%, its biggest decline since May. Excluding transportation, new orders were flat. The forecast called for a rebound in overall orders of more than 1% for Nov, likely forecasting a bounce due to the end of a workers strike at GM (GM). The strike lasted 40 days over 2 months & dragged down durable goods orders in Sep & Oct. Orders for motor vehicles & parts did rebound, up 1.9%, but it wasn't enough to offset the large decrease in defense aircraft orders. Excluding defense, new orders were up 0.8%. Orders for defense aircraft & parts fell 72.7% & are down 14% the past year. Demand for commercial aircraft & parts fell 1.8% last month & is down 38% this year. Boeing (BA), a Dow stock, had already suspended production of the 737 Max after 2 crashes that killed 346, then said last week it would halt Max production in Jan as it has become increasingly clear that the company still has numerous regulatory hurdles to clear. It did not say when production would resume. Analysts say the Boeing Max production halt could ding 2020 Q1 GDP by as much 0.5% as it ripples thru the supply chain. American manufacturing has been hurt by a prolonged trade war with China & a slowing global economy. So far this year, orders for durable goods, items expected to last at least 3 years, are down 1.3%. The 2 countries announced a “Phase 1" agreement earlier this month, under which the US will reduce tariffs & China will buy more US farm products. But there are still many issues to be resolved as negotiations continue. The US economy, which has recently been flashing warning signs of a slowdown, now seems to be finishing the year stronger in spite of the isolated issues at GM & BA. Healthy consumer spending, a strong job market & interest rate cuts by the Federal Reserve have helped to offset the damage done by trade disputes. The Commerce Dept said Fri that the GDP, the economy's total output of goods & services, expanded at a moderate annual rate of 2.1% in the Jul-Sep qtr. The brisk pace of spending last month is a sign that consumers, who account for about 70% of economic activity, are helping the economy offset drags ranging from the trade wars to a global economic slump. Many economists are forecasting that the economy is expanding at a decent 2% annual rate in Q4.
CEO Dennis Muilenburg is the latest casualty in a string of chief exec exits this year. Thru Nov, 1480 CEOs left their companies in 2019, according to business & exec coaching firm Challenger, Gray & Christmas. That's the highest number on record for the first 11 months of a year. Dec also has brought other high-profile resignations, which would make 2019 the highest year on record for exec departures. Andy Challenger, VP of Challenger, Gray & Christmas, said there is not one simple reason for why so many departures have happened this year, but he would tie it to the US being in its longest economic expansion in history. “Part of being in a great economy is that it’s an easy time to make transitions,” he said. “People are getting packages that are more favorable, when stocks are at an all-time high.” The previous highest total year on record was 2008, when 1484 chief execs departed in the midst of the financial crisis. The firm started tracking CEO departures in 2002. The vast majority of CEO departures this year were from private companies or the gov sector. Only 284 of those exits thru Nov were from publicly traded companies. Muilenburg joins their ranks as BA battles scrutiny after 2 fatal crashes of its bestselling plane, the 737 Max. The company announced the leadership change yesterday. BA Chairman David Calhoun will replace Muilenburg as CEO of the embattled manufacturer on Jan 13. CFO Greg Smith will serve as the interim CEO until then. Notably, BA is maintaining its decision to keep its chairman & CEO positions under the control of 2 separate individuals.
Boeing CEO Dennis Muilenburg’s departure adds to a record year of upheaval
Gold prices settled higher to begin a shortened week of holiday trade, with the precious commodity punching above a level of technical resistance that could signify further gains ahead, strategists say. Gold for Feb delivery gained $7.80 (0.5%) to settle at $1488 an ounce, its highest settlement price since Nov 6. A string of upbeat economic data in Dec has fueled optimism that the US economy may be able to extend its record expansion well into 2020. But new data out today also showed that US durable goods sank 2% in Nov, their biggest decline since May, a reminder that while consumer spending is driving US growth, manufacturing continues to be under pressure. Still, upbeat tones on US-China trade were propelling US stocks higher, putting them on track for another round of all-time records. Gold is up 16.3% so far this year, based on the most-active contract
Sales of newly-constructed homes in the US increased 1.3% on a monthly basis in Nov to a seasonally-adjusted annual rate of 719K, the gov reported. While the Nov sales volume represented a monthly increase, that’s only because the data for Oct were revised. Previously, thre gov had said that new-home sales occurred at a 733K annual pace, which nearly met the 12-year record set back in Jun. The small sample size of the new-home sales report from the Census Bureau lends itself to wide swings & significant revisions, as was also seen back in the Sep & Oct data releases. Nov's new-home sales volume was well below the estimate of 740K. Nevertheless, new-home sales were 19.4% higher on an annual basis in Nov. The median sales price for new homes was $330K in Nov. The gov estimated there was a 5.4-month supply of new homes available for sale, up slightly from Oct's 5.3-month supply. The supply of new homes last peaked at the 7-month level back in Dec 2018.
Oil futures settled slightly higher, even as reports indicated that a recent pact to curb global output by OPEC & its allies may be eased & as Kuwait & Saudi Arabia appeared close to a resolution on a disputed territory, which could see fresh oil hit the market in coming months. West Texas Intermediate crude for Feb delivery, the US benchmark grade, gained 8¢ to close at $60.52 a barrel. Feb Brent crude tacked on 25¢ (0.4%) to end at $66.39 a barrel, after the intl benchmark snapped a 6th straight session of gains on Fri but produced a 1.4% gain last week. Russian Energy Minister Alexander Novak said the group known as OPEC+ may consider easing the output restrictions at a coming meeting in Mar. Such a move would come after OPEC & its allies agreed to officially cut production by 500K barrels per day on top of its current reduction agreement, beginning in Jan. Those additional reductions were meant to take total output cuts for OPEC+ to 1.7M barrels day, including the current cuts of 1.2M barrels a day from Oct 2018 levels that was put into place in Jan 2019.
Oil prices settle slightly higher even as Russia says OPEC+ may ease output
Optimism about China cutting some tariffs brought out buyers in the AM. For the rest of the day, the popular averages remained at elevated levels. The Dow is approaching 29K (hard to believe), needing just another 450. At the same time demand from nervous investors for safe haven gold continues to be strong.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Orders to US factories for big-ticket manufactured goods fell by the largest amount in 6 months, led by a large decrease in orders for defense aircraft & parts. A closely watched category that tracks business investment ticked up 0.1%. Orders for durable goods fell 2% last month, the biggest decline since May, the Commerce Dept said. Orders have fallen in 2 of the past 3 months. Oct's number was revised down to 0.2% from a 0.6% gain. Transportation equipment orders fell 5.9%, its biggest decline since May. Excluding transportation, new orders were flat. The forecast called for a rebound in overall orders of more than 1% for Nov, likely forecasting a bounce due to the end of a workers strike at GM (GM). The strike lasted 40 days over 2 months & dragged down durable goods orders in Sep & Oct. Orders for motor vehicles & parts did rebound, up 1.9%, but it wasn't enough to offset the large decrease in defense aircraft orders. Excluding defense, new orders were up 0.8%. Orders for defense aircraft & parts fell 72.7% & are down 14% the past year. Demand for commercial aircraft & parts fell 1.8% last month & is down 38% this year. Boeing (BA), a Dow stock, had already suspended production of the 737 Max after 2 crashes that killed 346, then said last week it would halt Max production in Jan as it has become increasingly clear that the company still has numerous regulatory hurdles to clear. It did not say when production would resume. Analysts say the Boeing Max production halt could ding 2020 Q1 GDP by as much 0.5% as it ripples thru the supply chain. American manufacturing has been hurt by a prolonged trade war with China & a slowing global economy. So far this year, orders for durable goods, items expected to last at least 3 years, are down 1.3%. The 2 countries announced a “Phase 1" agreement earlier this month, under which the US will reduce tariffs & China will buy more US farm products. But there are still many issues to be resolved as negotiations continue. The US economy, which has recently been flashing warning signs of a slowdown, now seems to be finishing the year stronger in spite of the isolated issues at GM & BA. Healthy consumer spending, a strong job market & interest rate cuts by the Federal Reserve have helped to offset the damage done by trade disputes. The Commerce Dept said Fri that the GDP, the economy's total output of goods & services, expanded at a moderate annual rate of 2.1% in the Jul-Sep qtr. The brisk pace of spending last month is a sign that consumers, who account for about 70% of economic activity, are helping the economy offset drags ranging from the trade wars to a global economic slump. Many economists are forecasting that the economy is expanding at a decent 2% annual rate in Q4.
Orders for big-ticket manufactured goods slide 2%
CEO Dennis Muilenburg is the latest casualty in a string of chief exec exits this year. Thru Nov, 1480 CEOs left their companies in 2019, according to business & exec coaching firm Challenger, Gray & Christmas. That's the highest number on record for the first 11 months of a year. Dec also has brought other high-profile resignations, which would make 2019 the highest year on record for exec departures. Andy Challenger, VP of Challenger, Gray & Christmas, said there is not one simple reason for why so many departures have happened this year, but he would tie it to the US being in its longest economic expansion in history. “Part of being in a great economy is that it’s an easy time to make transitions,” he said. “People are getting packages that are more favorable, when stocks are at an all-time high.” The previous highest total year on record was 2008, when 1484 chief execs departed in the midst of the financial crisis. The firm started tracking CEO departures in 2002. The vast majority of CEO departures this year were from private companies or the gov sector. Only 284 of those exits thru Nov were from publicly traded companies. Muilenburg joins their ranks as BA battles scrutiny after 2 fatal crashes of its bestselling plane, the 737 Max. The company announced the leadership change yesterday. BA Chairman David Calhoun will replace Muilenburg as CEO of the embattled manufacturer on Jan 13. CFO Greg Smith will serve as the interim CEO until then. Notably, BA is maintaining its decision to keep its chairman & CEO positions under the control of 2 separate individuals.
Boeing CEO Dennis Muilenburg’s departure adds to a record year of upheaval
Gold prices settled higher to begin a shortened week of holiday trade, with the precious commodity punching above a level of technical resistance that could signify further gains ahead, strategists say. Gold for Feb delivery gained $7.80 (0.5%) to settle at $1488 an ounce, its highest settlement price since Nov 6. A string of upbeat economic data in Dec has fueled optimism that the US economy may be able to extend its record expansion well into 2020. But new data out today also showed that US durable goods sank 2% in Nov, their biggest decline since May, a reminder that while consumer spending is driving US growth, manufacturing continues to be under pressure. Still, upbeat tones on US-China trade were propelling US stocks higher, putting them on track for another round of all-time records. Gold is up 16.3% so far this year, based on the most-active contract
Gold notches highest finish in more than 6 weeks to kick off a short holiday week
Sales of newly-constructed homes in the US increased 1.3% on a monthly basis in Nov to a seasonally-adjusted annual rate of 719K, the gov reported. While the Nov sales volume represented a monthly increase, that’s only because the data for Oct were revised. Previously, thre gov had said that new-home sales occurred at a 733K annual pace, which nearly met the 12-year record set back in Jun. The small sample size of the new-home sales report from the Census Bureau lends itself to wide swings & significant revisions, as was also seen back in the Sep & Oct data releases. Nov's new-home sales volume was well below the estimate of 740K. Nevertheless, new-home sales were 19.4% higher on an annual basis in Nov. The median sales price for new homes was $330K in Nov. The gov estimated there was a 5.4-month supply of new homes available for sale, up slightly from Oct's 5.3-month supply. The supply of new homes last peaked at the 7-month level back in Dec 2018.
New-home sales increased slightly in November — and 2020 looks set to be a big year for home builders
Oil futures settled slightly higher, even as reports indicated that a recent pact to curb global output by OPEC & its allies may be eased & as Kuwait & Saudi Arabia appeared close to a resolution on a disputed territory, which could see fresh oil hit the market in coming months. West Texas Intermediate crude for Feb delivery, the US benchmark grade, gained 8¢ to close at $60.52 a barrel. Feb Brent crude tacked on 25¢ (0.4%) to end at $66.39 a barrel, after the intl benchmark snapped a 6th straight session of gains on Fri but produced a 1.4% gain last week. Russian Energy Minister Alexander Novak said the group known as OPEC+ may consider easing the output restrictions at a coming meeting in Mar. Such a move would come after OPEC & its allies agreed to officially cut production by 500K barrels per day on top of its current reduction agreement, beginning in Jan. Those additional reductions were meant to take total output cuts for OPEC+ to 1.7M barrels day, including the current cuts of 1.2M barrels a day from Oct 2018 levels that was put into place in Jan 2019.
Oil prices settle slightly higher even as Russia says OPEC+ may ease output
Optimism about China cutting some tariffs brought out buyers in the AM. For the rest of the day, the popular averages remained at elevated levels. The Dow is approaching 29K (hard to believe), needing just another 450. At the same time demand from nervous investors for safe haven gold continues to be strong.
Dow Jones Industrials
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