Dow fell 69, decliners ahead of advancers better than 3-2 & NAZ lost 11. The MLP index dropped 2+ to the 223s & the REIT index gained 1 to 415. Junk bond funds fluctuated & Treasuries rose in price. Oil slid back pennies in the 58s & gold pulled back 5 to the 155s.
AMJ (Alerian MLP Index tracking fund)
Stocks were lower as traders returned to work following the Martin Luther King Jr. holiday. All 3 major averages were trading just off record highs as concerns over the spreading of a coronavirus in China weighed on sentiment. Chinese officials announced today a 6th death due to the virus, which has sickened more than 300. Markets across Asia were under pressure with Hong Kong's Hang Seng losing 2.8%, China's Shanghai Composite falling 1.4% & Japan's Nikkei sliding 0.9%. Pres Trump gave a speech at the World Economic Forum in Davos, Switzerland, touting the booming US economy. The speech came hours ahead of the beginning of the Senate impeachment trial. On the commodities front, West Texas Intermediate crude oil was down 1.2% at $57.90 a barrel & gold was lower by 0.4% near $1555 an ounce. Treasuries gained, pushing the yield on the 10-year note down 2.6 basis points to 1.799%. In Europe, Britain's FTSE & France's CAC were both lower by 0.8% & Germany's DAX shed 0.2%.
Pres Trump's top economic advisor, Larry Kudlow, said that GDP growth in the US should hit at least 3% in 2020. “This is a long cycle, and what you’ve got here in the Trump years is essentially a mini upcycle,” said Kudlow, National Economic Council director. “You’ve gone from 1.5% to 2% growth. We had it going at almost 4%, then the Fed tightened.” “We’re now down to 2.5% to 3%. I’m looking for faster growth: I think we’re going to get 3% this year,” he added. “The trade deals will help, the Fed changed policy — that was very, very important.” Some investors worried in 2019 that pressure from the US-China tariffs, a decelerating global economy & low inflation levels would cut short a year that started off with a 3.1% GDP gain. But with 2 new major trade deals & new predictions for a global recovery in 2020, sentiment appears to be improving. Stronger manufacturing & trade data released earlier this month suggested the US economy ended 2019 on a healthy note, with expectations that the economy will grow more than 2% in Q4. While that would represent a slowdown from the 2.9% increase in 2018, 2% growth would still suggest the decade-old expansion is set to continue into 2020. Globally, the most recent indication for better growth came from the IMF, which earlier this week said it sees growth running at 3.3% in 2020, up from 2.9% in 2019. But Kudlow's Jun prediction that US growth would maintain its 3% rate in 2019 will likely fall short when the Commerce Dept releases its Q4 numbers later this year.
White House top economic advisor Larry Kudlow says economic growth will beat 3% this year
Pres Trump took an opportunity to address world leaders to trumpet his “America First” agenda & encourage other nations to adopt a similar nation-focused approach to economics & political relations around the world. “America’s newfound prosperity is undeniable, unprecedented and unmatched anywhere in the world,” Trump said at the World Economic Forum. “America achieved this stunning turnaround not by making minor changes to a handful of policies, but by adopting a whole new approach centered entirely on the well-being of the American worker.” “Every decision we make on taxes, trade, regulation, energy, immigration, education and more is focused on improving the lives of everyday Americans,” the pres added. “Only when governments put their own citizens first will people be fully invested in their national futures.” The multiday forum in Davos is an annual event where the globe's most powerful political leaders & corp execs share ideas in the Swiss Alps. Much of Trump's speech focused on the success the administration has seen while pursuing an “America First” policy, a set of guidelines that tries to benefit average Americans through economic policies such as trade protections or tax cuts. The policy, which has led to fierce trade battles with longtime economic partners like China, the EU & Mexico, has accompanied better-than-expected GDP growth in the US as well as an unemployment rate under 4% & consistent records in the stock market. Though bilateral trade deliberations have roiled financial markets for the better part of 2 years, the White House reached 2 key trade deals last week that officials say will boost the economy & sent the S&P 500 above 3300 for the first time. The US & China signed on Wed a “phase one” trade deal that officials say will lead to an increase in sales of American goods & services to Beijing & ease the 2-year dispute between the globe's 2 largest economies. On Thurs, the Senate passed a new North American trade deal that grants US producers greater access to Canadian dairy markets & creates stricter rules for auto parts rules of origin. In his speech, the pres also pointed to one of the administration's biggest legislative wins, the 2017 Tax Cuts & Jobs Act, which lowered the corp tax rate to 21% & buoyed business profits for much of Trump's presidency. The administration argues that the promise of lower tax rates entices global businesses to shift more production to the US & employ more Americans. “Today I urge other nations to follow our example and liberate your citizens from the crushing weight of bureaucracy,” Trump said. “With that, you have to run your own countries the way you want.”
Trump at Davos urges countries to ‘put their own citizens first’ as he touts US economic success
Face masks sold out & temperature checks at airports & train stations became the new norm as China strove to control the outbreak of a new virus that has reached 4 other countries & territories & threatens to spread further during the Lunar New Year travel rush. Anxiety grew both at home & abroad after a Chinese gov expert confirmed fears on state television yesterday that the new type of coronavirus can spread from human to human. 6 have died & 291 have been infected in China, the National Health Commission said today. The stock prices of some companies that sell masks rose, but markets fell in much of Asia as investors worried about the potential impact on tourism & the economy. Concerned about a global outbreak similar to SARS, another coronavirus that spread from China to more than a dozen countries in 2002-2003, numerous nations have adopted screening measures for travelers from China, especially those arriving from Wuhan, the central city where the virus appears to have originated. Guards at Wuhan's airport pointed electronic thermometers at travelers. Several online retailers were sold out of masks, which were being sold for more than 10 times their original price. Users of the popular Weibo social media platform urged others to wash their hands & stay home. Outside the Wuhan Medical Treatment Center, where many of the coronavirus patients are receiving care, several workers were dressed in full-body biohazard suits, supplemented by goggles, masks & plastic wrapped around their shoes.
Stocks are digesting recent gains. The chart below shows that the Dow has had an excellent run in the last 3 months. The US economy remains strong even though it has slowed in the latter part of 2019. Concerns about the virus in China bear watching because it could prove serious to intl trade.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 58.33 | -0.21 | -0.4% |
| GC=F | Gold | 1,551.10 | -9.20 | -0.6% |
Stocks were lower as traders returned to work following the Martin Luther King Jr. holiday. All 3 major averages were trading just off record highs as concerns over the spreading of a coronavirus in China weighed on sentiment. Chinese officials announced today a 6th death due to the virus, which has sickened more than 300. Markets across Asia were under pressure with Hong Kong's Hang Seng losing 2.8%, China's Shanghai Composite falling 1.4% & Japan's Nikkei sliding 0.9%. Pres Trump gave a speech at the World Economic Forum in Davos, Switzerland, touting the booming US economy. The speech came hours ahead of the beginning of the Senate impeachment trial. On the commodities front, West Texas Intermediate crude oil was down 1.2% at $57.90 a barrel & gold was lower by 0.4% near $1555 an ounce. Treasuries gained, pushing the yield on the 10-year note down 2.6 basis points to 1.799%. In Europe, Britain's FTSE & France's CAC were both lower by 0.8% & Germany's DAX shed 0.2%.
Stocks slide as coronavirus spreads in China
Pres Trump's top economic advisor, Larry Kudlow, said that GDP growth in the US should hit at least 3% in 2020. “This is a long cycle, and what you’ve got here in the Trump years is essentially a mini upcycle,” said Kudlow, National Economic Council director. “You’ve gone from 1.5% to 2% growth. We had it going at almost 4%, then the Fed tightened.” “We’re now down to 2.5% to 3%. I’m looking for faster growth: I think we’re going to get 3% this year,” he added. “The trade deals will help, the Fed changed policy — that was very, very important.” Some investors worried in 2019 that pressure from the US-China tariffs, a decelerating global economy & low inflation levels would cut short a year that started off with a 3.1% GDP gain. But with 2 new major trade deals & new predictions for a global recovery in 2020, sentiment appears to be improving. Stronger manufacturing & trade data released earlier this month suggested the US economy ended 2019 on a healthy note, with expectations that the economy will grow more than 2% in Q4. While that would represent a slowdown from the 2.9% increase in 2018, 2% growth would still suggest the decade-old expansion is set to continue into 2020. Globally, the most recent indication for better growth came from the IMF, which earlier this week said it sees growth running at 3.3% in 2020, up from 2.9% in 2019. But Kudlow's Jun prediction that US growth would maintain its 3% rate in 2019 will likely fall short when the Commerce Dept releases its Q4 numbers later this year.
White House top economic advisor Larry Kudlow says economic growth will beat 3% this year
Pres Trump took an opportunity to address world leaders to trumpet his “America First” agenda & encourage other nations to adopt a similar nation-focused approach to economics & political relations around the world. “America’s newfound prosperity is undeniable, unprecedented and unmatched anywhere in the world,” Trump said at the World Economic Forum. “America achieved this stunning turnaround not by making minor changes to a handful of policies, but by adopting a whole new approach centered entirely on the well-being of the American worker.” “Every decision we make on taxes, trade, regulation, energy, immigration, education and more is focused on improving the lives of everyday Americans,” the pres added. “Only when governments put their own citizens first will people be fully invested in their national futures.” The multiday forum in Davos is an annual event where the globe's most powerful political leaders & corp execs share ideas in the Swiss Alps. Much of Trump's speech focused on the success the administration has seen while pursuing an “America First” policy, a set of guidelines that tries to benefit average Americans through economic policies such as trade protections or tax cuts. The policy, which has led to fierce trade battles with longtime economic partners like China, the EU & Mexico, has accompanied better-than-expected GDP growth in the US as well as an unemployment rate under 4% & consistent records in the stock market. Though bilateral trade deliberations have roiled financial markets for the better part of 2 years, the White House reached 2 key trade deals last week that officials say will boost the economy & sent the S&P 500 above 3300 for the first time. The US & China signed on Wed a “phase one” trade deal that officials say will lead to an increase in sales of American goods & services to Beijing & ease the 2-year dispute between the globe's 2 largest economies. On Thurs, the Senate passed a new North American trade deal that grants US producers greater access to Canadian dairy markets & creates stricter rules for auto parts rules of origin. In his speech, the pres also pointed to one of the administration's biggest legislative wins, the 2017 Tax Cuts & Jobs Act, which lowered the corp tax rate to 21% & buoyed business profits for much of Trump's presidency. The administration argues that the promise of lower tax rates entices global businesses to shift more production to the US & employ more Americans. “Today I urge other nations to follow our example and liberate your citizens from the crushing weight of bureaucracy,” Trump said. “With that, you have to run your own countries the way you want.”
Trump at Davos urges countries to ‘put their own citizens first’ as he touts US economic success
Face masks sold out & temperature checks at airports & train stations became the new norm as China strove to control the outbreak of a new virus that has reached 4 other countries & territories & threatens to spread further during the Lunar New Year travel rush. Anxiety grew both at home & abroad after a Chinese gov expert confirmed fears on state television yesterday that the new type of coronavirus can spread from human to human. 6 have died & 291 have been infected in China, the National Health Commission said today. The stock prices of some companies that sell masks rose, but markets fell in much of Asia as investors worried about the potential impact on tourism & the economy. Concerned about a global outbreak similar to SARS, another coronavirus that spread from China to more than a dozen countries in 2002-2003, numerous nations have adopted screening measures for travelers from China, especially those arriving from Wuhan, the central city where the virus appears to have originated. Guards at Wuhan's airport pointed electronic thermometers at travelers. Several online retailers were sold out of masks, which were being sold for more than 10 times their original price. Users of the popular Weibo social media platform urged others to wash their hands & stay home. Outside the Wuhan Medical Treatment Center, where many of the coronavirus patients are receiving care, several workers were dressed in full-body biohazard suits, supplemented by goggles, masks & plastic wrapped around their shoes.
China's coronavirus kills 6, infects 291 as airports crack down amid outbreak fears
Stocks are digesting recent gains. The chart below shows that the Dow has had an excellent run in the last 3 months. The US economy remains strong even though it has slowed in the latter part of 2019. Concerns about the virus in China bear watching because it could prove serious to intl trade.
Dow Jones Industrials
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