Dow dropped 70 (off early lows), decliners over advancers 3-2 & NAZ crawled up 12. The MLP index jumped up 3 to the 225s & the REIT index was steady in the 403s. Junk bond funds were mixed & Treasuries rose slightly in price. Oil climbed higher in the 63s & gold shot up 15 to 1568 (more on both below).
AMJ (Alerian MLP Index tracking fund)
The global benchmark for crude oil rose above $70 a barrel for the first time in over 3 months, with jitters rising over the escalating military tensions between Iran & the US. The Brent contract for oil touched a high of $70.74 a barrel, the highest since mid-Sep, when it briefly spiked over an attack on Saudi crude processing facilities. Stock markets were down as well amid fears of how Iran would fulfill a vow of “harsh retaliation.” The US killed Iranian Gen. Qassem Soleimani in Iraq on Fri. Yesterday, as Iran threatened to retaliate & Pres Trump tweeted the US was prepared to strike 52 sites in the Islamic Republic if any Americans are harmed. Fears that Iran could strike back at oil & gas facilities important to the US & its Persian Gulf allies stem from earlier attacks widely attributed to Iran. The US has blamed Iran for a wave of provocative attacks in the region, including the sabotage of oil tankers & an attack on Saudi Arabia's oil infrastructure in September that temporarily halved its production. Iran has denied involvement in those attacks. Global stock markets have been sliding since Fri. European indexes were down over 1% today after Asia closed lower. Brent crude was up $1.02 at $69.62 a barrel, having rise almost 6% since before the Iranian general's killing.
The Senate could approve the US-Mexico-Canada Agreement as early as Fri, White House trade adviser Peter Navarro said. "We're gonna get that passed as early as Friday or Monday [Jan. 13]. ... My good friend Sen. Grassley is going to mark this bill up on Tuesday in the finance committee," Navarro said. "Once it's marked up, Leader McConnell will then have the opportunity to put it on the floor, and the beauty of fast-track legislation is that it's a maximum of 20 hours once it goes to the floor for the vote. It's got a large bipartisan support in the Senate." "Possibly this week we could actually do some great people's business. Dairy farmers in Wisconsin will rejoice, auto workers in Detroit, everyone in between," Navarro added. Trade negotiators from the US, Mexico & Canada finalized USMCA in Dec after coming to an agreement on how enforcement of its provisions would work. 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. Navarro brought up the administration's "phase one" trade deal with China as well. "On Jan. 15, just a few days later, we're going to sign the 'phase one' China deal, so you could have, within a space of a week, leading off 2020, two of the biggest and best trade deals ever signed in American history," Navarro said.
Gold surged to its highest level in more than 6 years as investors fled riskier assets such as stocks amid rising tensions between Iran and the US. Futures for Feb delivery were up 1.7% at $1578 per ounce after hitting a high of $1590 per ounce. That's the metal’s highest level since Apr 2013, when it traded at $1604 per ounce. Gold was also headed for its 9th straight day of gains. Gold prices have been on a tear over the past 2 sessions after Pres Trump authorized the killing of Qasem Soleimani, a top-ranking Iranian military official, in Baghdad. On Fri, gold rallied 1.6%. Soleimani's killing led Iraq to expel foreign troops from the country while Iran vowed to retaliate against the US. The Iranian regime also said yesterday it would not abide by the uranium-enrichment limits set by the 2015 nuclear deal. Stock prices tumbled last week after Soleimani was killed. The S&P 500 & Dow each had their worst trading day in a month on Fri. Traders were set to add to those losses today with stock futures pointing to another drop. Investors have turned to gold in part because the metal is seen as a hedge against market volatility & economic slowdowns, particularly if they are sparked by geopolitical tensions. Gold is also used as a hedge against inflation, which could rise if oil prices keep spiking. Crude price jumped more than 3% on Fri amid worries that the US-Iran conflict could disrupt the global oil supply. Today, oil was up about 1% near $63.70 per barrel.
Gold surges to more than 6-year high on geopolitical turmoil, inflation fears
Selling in stocks at the opening has eased with the Dow up 100 from its early lows. The volatility index (VIX) is under 15 after only a limited rise today. Investors are hoping for the best. The confusing & chaotic situation in the MidEast will probably continue for some time, but the prospects of a long,awaited USMCA deal may be stimulating buyers.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 63.49 | +0.44 | +0.7% |
| GC=F | Gold | 1,575.10 | +22.70 | +1.5% |
The global benchmark for crude oil rose above $70 a barrel for the first time in over 3 months, with jitters rising over the escalating military tensions between Iran & the US. The Brent contract for oil touched a high of $70.74 a barrel, the highest since mid-Sep, when it briefly spiked over an attack on Saudi crude processing facilities. Stock markets were down as well amid fears of how Iran would fulfill a vow of “harsh retaliation.” The US killed Iranian Gen. Qassem Soleimani in Iraq on Fri. Yesterday, as Iran threatened to retaliate & Pres Trump tweeted the US was prepared to strike 52 sites in the Islamic Republic if any Americans are harmed. Fears that Iran could strike back at oil & gas facilities important to the US & its Persian Gulf allies stem from earlier attacks widely attributed to Iran. The US has blamed Iran for a wave of provocative attacks in the region, including the sabotage of oil tankers & an attack on Saudi Arabia's oil infrastructure in September that temporarily halved its production. Iran has denied involvement in those attacks. Global stock markets have been sliding since Fri. European indexes were down over 1% today after Asia closed lower. Brent crude was up $1.02 at $69.62 a barrel, having rise almost 6% since before the Iranian general's killing.
Oil price keeps rising as Iran-US conflict fears spread
The Senate could approve the US-Mexico-Canada Agreement as early as Fri, White House trade adviser Peter Navarro said. "We're gonna get that passed as early as Friday or Monday [Jan. 13]. ... My good friend Sen. Grassley is going to mark this bill up on Tuesday in the finance committee," Navarro said. "Once it's marked up, Leader McConnell will then have the opportunity to put it on the floor, and the beauty of fast-track legislation is that it's a maximum of 20 hours once it goes to the floor for the vote. It's got a large bipartisan support in the Senate." "Possibly this week we could actually do some great people's business. Dairy farmers in Wisconsin will rejoice, auto workers in Detroit, everyone in between," Navarro added. Trade negotiators from the US, Mexico & Canada finalized USMCA in Dec after coming to an agreement on how enforcement of its provisions would work. 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. Navarro brought up the administration's "phase one" trade deal with China as well. "On Jan. 15, just a few days later, we're going to sign the 'phase one' China deal, so you could have, within a space of a week, leading off 2020, two of the biggest and best trade deals ever signed in American history," Navarro said.
Senate could approve USMCA as early as Friday: Navarro
Gold surged to its highest level in more than 6 years as investors fled riskier assets such as stocks amid rising tensions between Iran and the US. Futures for Feb delivery were up 1.7% at $1578 per ounce after hitting a high of $1590 per ounce. That's the metal’s highest level since Apr 2013, when it traded at $1604 per ounce. Gold was also headed for its 9th straight day of gains. Gold prices have been on a tear over the past 2 sessions after Pres Trump authorized the killing of Qasem Soleimani, a top-ranking Iranian military official, in Baghdad. On Fri, gold rallied 1.6%. Soleimani's killing led Iraq to expel foreign troops from the country while Iran vowed to retaliate against the US. The Iranian regime also said yesterday it would not abide by the uranium-enrichment limits set by the 2015 nuclear deal. Stock prices tumbled last week after Soleimani was killed. The S&P 500 & Dow each had their worst trading day in a month on Fri. Traders were set to add to those losses today with stock futures pointing to another drop. Investors have turned to gold in part because the metal is seen as a hedge against market volatility & economic slowdowns, particularly if they are sparked by geopolitical tensions. Gold is also used as a hedge against inflation, which could rise if oil prices keep spiking. Crude price jumped more than 3% on Fri amid worries that the US-Iran conflict could disrupt the global oil supply. Today, oil was up about 1% near $63.70 per barrel.
Gold surges to more than 6-year high on geopolitical turmoil, inflation fears
Selling in stocks at the opening has eased with the Dow up 100 from its early lows. The volatility index (VIX) is under 15 after only a limited rise today. Investors are hoping for the best. The confusing & chaotic situation in the MidEast will probably continue for some time, but the prospects of a long,awaited USMCA deal may be stimulating buyers.
Dow Jones Industrials
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