Dow gave back 14, decliners slightly ahead of advancers & NAZ added 14. The MLP index fell 2+ to the 208s & the REIT index was of 1+ to 391. Junk bond funds fluctuated & Treasuries were being purchased. Oil climbed higher in the 59s & gold went up 2 to 1474.
AMJ (Alerian MLP Index tracking fund)
The news that the US & China had essentially reached a trade deal that would prevent additional tariffs being tacked on to Chinese goods on Sun, helped send commodity markets higher. US corn, wheat & soybean futures rose yesterday on fresh export demand & renewed hopes for a trade agreement with China after Pres Trump tweeted that a deal with Beijing was "very close." Chicago Board of Trade Mar corn futures settled up 6½¢ at $3.77 per bushel, their biggest single-day advance in nearly 2 weeks. CBOT Mar wheat ended up 11¢ at $5.30 a bushel & Jan soybeans rose 5¢ to settle at $8.98. All 3 markets advanced after the Trump tweet & a report that US negotiators had offered to suspend tariffs due to go into effect Dec 15.
Stocks rose across the board after the US & China reached a partial trade agreement that further deescalates the 21-month-long trade war between the 2 economic superpowers. The deal includes promises from the Chinese to buy $50B of US agriculture, stronger intellectual-property protections & language to end China's currency manipulation. In return, the US will not place 15% tariffs on $160B of Chinese goods on Sun. During a press briefing Chinese officials said "major progress made" of the first phase of the deal. The pres also touted the strength of the US economy in a tweet. Traders were keeping a close eye on retailers after Nov retail sales fell short of expectations. Sales rose 0.2% versus last month, missing the 0.5% gain that was expected. Commodities rallied with West Texas Intermediate crude oil up 0.9% & gold higher by 0.2% to $1475 an ounce. Treasuries posted modest gains, pushing the yield on the 10-year note down 2.4 basis points to 1.875%. The £ surged, up 1.6% to 1.3370 versus the $, as Prime Minister Boris Johnson's Conservative Party claimed a robust majority in Parliament. That would alleviate uncertainty by giving Johnson more political capital to push for the UK's departure from the 28-nation EU by the end of Jan.
China & the US have reached an agreement on text of a phase one trade deal & will now move toward signing a deal as quickly as possible, Chinese officials said. Pres Trump later announced his administration would cancel its next round of tariffs on Chinese goods set to take effect Sun. In tweets, he added that the White House would leave 25% tariffs on $250B in imports in place, while cutting some existing tariff rates to 7.5%. Under the accord, the US will scrap tariffs on Chinese goods in phases, a priority for Beijing, Vice Commerce Minister Wang Shouwen said. However, Wang did not detail when exactly the US would roll back duties. Beijing will increase agricultural purchases significantly, Vice Minister of Agriculture & Rural Affairs Han Jun said, though he did not specify by how much. Trump has insisted that Beijing buy more American crops as part of a deal. The developing deal involves intellectual property, technology transfers, agricultural goods, financial services & expansion of trade, Chinese officials said. The agreement still needs to go thru legal procedures as DC & Beijing work toward setting a time for inking it. Major US stock indices jumped following the comments from Chinese officials. The 2 large economies have scrambled to patch up a partial trade deal announced in Oct, which Trump said would involve more Chinese purchases of agricultural goods. The pres has used tariffs to pressure Beijing as he pushes for a broader agreement to address what he calls abuses including intellectual property theft, forced technology transfers & a massive trade deficit.
Sales at US retailers rose slightly in Nov & mostly benefited a few merchants such as auto dealers & internet stores, suggesting the holiday season got off to a sluggish start. Retail sales edged up 0.2% last month, the gov said. The forecast called for a 0.5% increase. One potential reason sales fell short of the forecast: A late Thanksgiving pushed the first big weekend of holiday spending into Dec & Cyber Monday took place on Dec 2. Internet-based retailers fared the best. Sales at nonstore retailers rose 0.8% last month. Stores such that sell electronics & appliances also posted a similarly strong increase. And receipts advanced 0.7% at gas stations, reflecting higher prices, & 0.5% at auto dealers. The rest of the retail industry lagged behind. If autos & gas are stripped out, sales were basically flat. Sales fell at department stores, restaurants, clothing stores, pharmacies & outlets that sell sporting goods. The declines at restaurants & health-care stores were the biggest in almost a year. Retail sales in Oct, meanwhile, were revised up a tick to show a 0.4% increase. The 2019 holiday season is likely to be stronger than it was last year, when retail sales fell slightly in Nov & even more sharply in Dec. The labor market is robust, unemployment is low, stocks are at record highs & consumer confidence has rebounded after a late-summer lull. Yet as the Nov results suggested, the increase in sales probably won't be enough to give the US economy a huge boost in Q4.
After the trade deal announcement, the gut reaction was to buy stocks. Then traders looked at details as they are being released & there were some 2nd thoughts. The USTR said 7.5% tariffs will be kept on $120B of China imports. The deal remains a "work in progress." Trump said more negotiations are continuing. Additionally, the Nov retail sales data was inconclusive. The market averages are essentially at record highs while more work is needed on a final trade deal.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 59.73 | +0.55 | +0.9% |
| GC=F | Gold | 1,474.20 | +1.90 | +0.1% |
The news that the US & China had essentially reached a trade deal that would prevent additional tariffs being tacked on to Chinese goods on Sun, helped send commodity markets higher. US corn, wheat & soybean futures rose yesterday on fresh export demand & renewed hopes for a trade agreement with China after Pres Trump tweeted that a deal with Beijing was "very close." Chicago Board of Trade Mar corn futures settled up 6½¢ at $3.77 per bushel, their biggest single-day advance in nearly 2 weeks. CBOT Mar wheat ended up 11¢ at $5.30 a bushel & Jan soybeans rose 5¢ to settle at $8.98. All 3 markets advanced after the Trump tweet & a report that US negotiators had offered to suspend tariffs due to go into effect Dec 15.
Corn, wheat, soy rally on U.S.-China trade hopes, export demand
Stocks rose across the board after the US & China reached a partial trade agreement that further deescalates the 21-month-long trade war between the 2 economic superpowers. The deal includes promises from the Chinese to buy $50B of US agriculture, stronger intellectual-property protections & language to end China's currency manipulation. In return, the US will not place 15% tariffs on $160B of Chinese goods on Sun. During a press briefing Chinese officials said "major progress made" of the first phase of the deal. The pres also touted the strength of the US economy in a tweet. Traders were keeping a close eye on retailers after Nov retail sales fell short of expectations. Sales rose 0.2% versus last month, missing the 0.5% gain that was expected. Commodities rallied with West Texas Intermediate crude oil up 0.9% & gold higher by 0.2% to $1475 an ounce. Treasuries posted modest gains, pushing the yield on the 10-year note down 2.4 basis points to 1.875%. The £ surged, up 1.6% to 1.3370 versus the $, as Prime Minister Boris Johnson's Conservative Party claimed a robust majority in Parliament. That would alleviate uncertainty by giving Johnson more political capital to push for the UK's departure from the 28-nation EU by the end of Jan.
Stocks jumps as China confirms US trade deal
China & the US have reached an agreement on text of a phase one trade deal & will now move toward signing a deal as quickly as possible, Chinese officials said. Pres Trump later announced his administration would cancel its next round of tariffs on Chinese goods set to take effect Sun. In tweets, he added that the White House would leave 25% tariffs on $250B in imports in place, while cutting some existing tariff rates to 7.5%. Under the accord, the US will scrap tariffs on Chinese goods in phases, a priority for Beijing, Vice Commerce Minister Wang Shouwen said. However, Wang did not detail when exactly the US would roll back duties. Beijing will increase agricultural purchases significantly, Vice Minister of Agriculture & Rural Affairs Han Jun said, though he did not specify by how much. Trump has insisted that Beijing buy more American crops as part of a deal. The developing deal involves intellectual property, technology transfers, agricultural goods, financial services & expansion of trade, Chinese officials said. The agreement still needs to go thru legal procedures as DC & Beijing work toward setting a time for inking it. Major US stock indices jumped following the comments from Chinese officials. The 2 large economies have scrambled to patch up a partial trade deal announced in Oct, which Trump said would involve more Chinese purchases of agricultural goods. The pres has used tariffs to pressure Beijing as he pushes for a broader agreement to address what he calls abuses including intellectual property theft, forced technology transfers & a massive trade deficit.
China says it has agreed to US trade deal text, indicates next step is signing
Sales at US retailers rose slightly in Nov & mostly benefited a few merchants such as auto dealers & internet stores, suggesting the holiday season got off to a sluggish start. Retail sales edged up 0.2% last month, the gov said. The forecast called for a 0.5% increase. One potential reason sales fell short of the forecast: A late Thanksgiving pushed the first big weekend of holiday spending into Dec & Cyber Monday took place on Dec 2. Internet-based retailers fared the best. Sales at nonstore retailers rose 0.8% last month. Stores such that sell electronics & appliances also posted a similarly strong increase. And receipts advanced 0.7% at gas stations, reflecting higher prices, & 0.5% at auto dealers. The rest of the retail industry lagged behind. If autos & gas are stripped out, sales were basically flat. Sales fell at department stores, restaurants, clothing stores, pharmacies & outlets that sell sporting goods. The declines at restaurants & health-care stores were the biggest in almost a year. Retail sales in Oct, meanwhile, were revised up a tick to show a 0.4% increase. The 2019 holiday season is likely to be stronger than it was last year, when retail sales fell slightly in Nov & even more sharply in Dec. The labor market is robust, unemployment is low, stocks are at record highs & consumer confidence has rebounded after a late-summer lull. Yet as the Nov results suggested, the increase in sales probably won't be enough to give the US economy a huge boost in Q4.
Retail sales fall short of forecast in the early stages of the holiday season. Poor omen?
After the trade deal announcement, the gut reaction was to buy stocks. Then traders looked at details as they are being released & there were some 2nd thoughts. The USTR said 7.5% tariffs will be kept on $120B of China imports. The deal remains a "work in progress." Trump said more negotiations are continuing. Additionally, the Nov retail sales data was inconclusive. The market averages are essentially at record highs while more work is needed on a final trade deal.
Dow Jones Industrials
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