Dow rose 50 (another record close), advancers barely ahead of decliners & NAZ added 31. The MLP index fell 1+ to the 226s & the REIT index crawled higher in the 413s. Junk bond funds were steady & Treasuries drifted lower in price. Oil was pennies higher in the 58s & gold went up 7 to 1558 (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)
The Trump administration has begun reviewing ways to carry out its goal of cutting taxes for the middle class. While lowering the payroll tax isn't high on the White House's list, adjusting the earned income tax credit for low to moderate earners is something that's being examined, Larry Kudlow, director of the National Economic Council, said. “We want to aim this at even faster economic growth going out in the president’s second term,” Kudlow added. The US economy grew at a 2.1% pace in Q3-2019, the most recent period for which data was available. Its growth reached a Trump-era peak of 4.2% in Q2-2018, following the passage of the Tax Cuts & Jobs Act, which lowered the top corp rate from 35% to 21% & reduced personal income taxes for many Americans. Kudlow said the administration wants to keep the child tax credit, which was doubled to $2K in 2018, & that it's considering making "some things permanent" on both the individual side & the corp side that would have expired under the 2017 tax overhaul. Another option is allowing for immediate expensing, which Kudlow called a "very powerful tonic" for business investment. A tax-cut proposal may be part of the White House budget that is submitted in Feb, according to 3 leakers. Passing major legislation such as tax-code changes is typically difficult in a presidential election year, however, especially one roiled by impeachment. "Reelect President Trump and you'll get lower tax rates and lower tax burdens," Kudlow said.
Job openings slide by more than half a million as the labor market tightens
China said its economy grew by 6.1% in 2019, meeting expectations even amid a trade dispute with the US. The forecast expected China's economy to have grown 6.1% in 2019, compared with 6.6% in 2018. Still, China's GDP growth last year was the slowest since 1990. Although Beijing's official GDP figures are tracked as an indicator of the health of the world's 2nd-largest economy, many outside experts have long expressed skepticism about the veracity of China’s reports. The official growth target for 2019 was 6% to 6.5%, but Chinese Vice Premier Liu He said on Wed that GDP growth in 2019 was estimated to have grown more than 6%, China's GDP grew 6.0% on-year in Q4-2019, according to the National Bureau of Statistics. Analysts forecast China's economy to have grown 6.0% in the Oct-Dec period of 2019. In Q3-2019, GDP growth was 6% — the slowest pace since 1992. The data came after Pres Trump signed a partial trade deal with China on Wed after a prolonged trade fight between the US & China for almost 2 years. Other Chinese economic data released alongside the GDP numbers showed growth in industrial output & retail sales for the month of Dec. Analysts read the data from Beijing positively, although there was still some caution about the partial trade deal with the US.
China’s economy grows at the slowest pace in 29 years
Industrial production fell 0.3% in Dec, the 3rd decline in the past 4 months, the Federal Reserve reported. The decline was in line with expectations of a 0.3% fall. The softness in the factory sector was telegraphed in the Dec unemployment report released last week, where manufacturing shed 12K jobs. For Q4 as a whole, industrial production was down at a 0.5% annual rate. Production was down in 3 of the 4 qtrs of 2019. Output was down 1% on a year-over-year basis. Manufacturing output rose 0.2% in Dec, but was down at a 1% rate for Q4. The gain in Dec came despite a 4.6% drop for output of motor vehicles & parts. Car assembly fell to 10.3M units in Dec from 11.2M in the prior month. There have been reports that automakers are planning to reduce production in 2020 in face of projections of slower sales. Mining output rose 1.3% in Dec on higher oil & gas extraction. Utility output fell 5.6% as warmer weather reduced the demand for home heating. Capacity utilization fell to 77% in Dec, the 2nd lowest reading in 27 months. The capacity utilization rate reflects the limits to operating the nation's factories, mines & utilities. It's still below pre-recession levels, above 80%, that economists believe could fan production costs & prices. The manufacturing sector hurt by the decline in global trade, trade tariffs with China & Boeing (BA) problems with the 737 MAX airplane. The ISM factory index sank in Dec to its lowest level since the recession of 2008. Some economists think the sector could hit bottom in Q1.
Gold futures moved higher, but the yellow metal barely budged for the week as stock rallied to all-time highs, helping to undercut some demand for assets perceived as havens. Gold for Feb delivery gained $9.80 (0.6%) to settle at $1560 an ounce. For the week, gold futures gained about 20¢ higher than last Fri's settlement (call that even), following gains for each of the last 3 weeks. Gold prices briefly pared earlier gains after a US housing report came in at its best level in about 13 years. Housing starts & permits jumped 16.9% to an annual rate of 1.608M units last month, the highest level since 2006. Consumer sentiment index in January, meanwhile, slipped to 99.1 from 99.3 in Dec. Bullion prices have managed to hold above a line viewed as support by technical analyst at $1550, offering a modicum of optimism for gold bulls. Traders also digested readings of expansion for China, which showed economic growth picked up in Dec. However, growth slowed to new multi-decade low of 6.1% in 2019.
Oil futures ended with a modest gain, but registered a loss for a 2nd week in a row as traders continued to weigh the prospects for energy demand in the wake of the China-US trade deal & Senate approval of the US-Mexico-Canada trade pact this week. West Texas Intermediate (WTI) crude for Feb delivery ended little changed, up 2¢, to settle at $58.54 a barrel after rising 1.2% yesterday. Mar Brent, the global benchmark, advanced 23¢ (0.4%) to end at $64.85 a barrel, following a 1% gain a day ago. However, for the week both contracts suffered declines for a 2nd week. Brent saw a weekly loss of about 0.2%. while WTI saw a nearly 0.9% weekly skid. Oil prices dipped lower today shortly after Baker Hughes reported that the number of active US oil rigs rose by 14 to 673 this week. That followed declines in each of the past 3 weeks. Data from China, meanwhile, showed slower economic growth last year, clouding the prospects for crude uptake. Chinese officials said its country saw economic growth falling to anew multi-decade low of 6.1% in 2019.
Oil futures suffer a second weekly decline
Demand for stocks continues to be strong as the market averages keep hitting new highs. Talk of lower taxes may fuel more interest in buying stocks. However the goings on in DC represent a big unknown.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Trump administration has begun reviewing ways to carry out its goal of cutting taxes for the middle class. While lowering the payroll tax isn't high on the White House's list, adjusting the earned income tax credit for low to moderate earners is something that's being examined, Larry Kudlow, director of the National Economic Council, said. “We want to aim this at even faster economic growth going out in the president’s second term,” Kudlow added. The US economy grew at a 2.1% pace in Q3-2019, the most recent period for which data was available. Its growth reached a Trump-era peak of 4.2% in Q2-2018, following the passage of the Tax Cuts & Jobs Act, which lowered the top corp rate from 35% to 21% & reduced personal income taxes for many Americans. Kudlow said the administration wants to keep the child tax credit, which was doubled to $2K in 2018, & that it's considering making "some things permanent" on both the individual side & the corp side that would have expired under the 2017 tax overhaul. Another option is allowing for immediate expensing, which Kudlow called a "very powerful tonic" for business investment. A tax-cut proposal may be part of the White House budget that is submitted in Feb, according to 3 leakers. Passing major legislation such as tax-code changes is typically difficult in a presidential election year, however, especially one roiled by impeachment. "Reelect President Trump and you'll get lower tax rates and lower tax burdens," Kudlow said.
Tax cuts 2.0 could include this middle-class windfall: Kudlow
Job openings plunged to their lowest level in
nearly 2 years as hiring surged in Nov & the employment market
got tighter, the Labor Dept reported. Total vacancies
tumbled by 561K to 6.8M for the month, the lowest since
Feb 2018, according to the Job Openings & Labor
Market Turnover Survey (JOLTS). Despite the big drop, openings still outnumbered
Americans considered unemployed by nearly 1M. The vacancy rate
nudged down to 4.3%. The big decline in openings came during a month when nonfarm payrolls increased 256K, the best total since Jan. Total hires increased by 39K though the rate was unchanged at 3.8%. On an industry basis, the biggest drops in job
openings came in retail, which decreased by 139K & construction,
which was down 112K. The quits rate, or the total employees who left
voluntarily, rose for the month by 39K, though the rate as a measure
of workers stood unchanged at 2.3% from Oct. The quits rate is
considered a strong gauge of worker mobility as it reflects confidence
that employees can find other work. Separations also were little
changed, with a drop of 4K keeping the rate at 3.7%. Layoffs &
discharges fell 46K & the rate declined to 1.1%. Payroll growth tailed off in Dec, however, with the dept's first estimate showing 145K new jobs. The JOLTS data has a one-month lag, so Dec's job openings are not available.
Job openings slide by more than half a million as the labor market tightens
China said its economy grew by 6.1% in 2019, meeting expectations even amid a trade dispute with the US. The forecast expected China's economy to have grown 6.1% in 2019, compared with 6.6% in 2018. Still, China's GDP growth last year was the slowest since 1990. Although Beijing's official GDP figures are tracked as an indicator of the health of the world's 2nd-largest economy, many outside experts have long expressed skepticism about the veracity of China’s reports. The official growth target for 2019 was 6% to 6.5%, but Chinese Vice Premier Liu He said on Wed that GDP growth in 2019 was estimated to have grown more than 6%, China's GDP grew 6.0% on-year in Q4-2019, according to the National Bureau of Statistics. Analysts forecast China's economy to have grown 6.0% in the Oct-Dec period of 2019. In Q3-2019, GDP growth was 6% — the slowest pace since 1992. The data came after Pres Trump signed a partial trade deal with China on Wed after a prolonged trade fight between the US & China for almost 2 years. Other Chinese economic data released alongside the GDP numbers showed growth in industrial output & retail sales for the month of Dec. Analysts read the data from Beijing positively, although there was still some caution about the partial trade deal with the US.
China’s economy grows at the slowest pace in 29 years
Industrial production fell 0.3% in Dec, the 3rd decline in the past 4 months, the Federal Reserve reported. The decline was in line with expectations of a 0.3% fall. The softness in the factory sector was telegraphed in the Dec unemployment report released last week, where manufacturing shed 12K jobs. For Q4 as a whole, industrial production was down at a 0.5% annual rate. Production was down in 3 of the 4 qtrs of 2019. Output was down 1% on a year-over-year basis. Manufacturing output rose 0.2% in Dec, but was down at a 1% rate for Q4. The gain in Dec came despite a 4.6% drop for output of motor vehicles & parts. Car assembly fell to 10.3M units in Dec from 11.2M in the prior month. There have been reports that automakers are planning to reduce production in 2020 in face of projections of slower sales. Mining output rose 1.3% in Dec on higher oil & gas extraction. Utility output fell 5.6% as warmer weather reduced the demand for home heating. Capacity utilization fell to 77% in Dec, the 2nd lowest reading in 27 months. The capacity utilization rate reflects the limits to operating the nation's factories, mines & utilities. It's still below pre-recession levels, above 80%, that economists believe could fan production costs & prices. The manufacturing sector hurt by the decline in global trade, trade tariffs with China & Boeing (BA) problems with the 737 MAX airplane. The ISM factory index sank in Dec to its lowest level since the recession of 2008. Some economists think the sector could hit bottom in Q1.
U.S. industrial output falls 0.3% in December, third drop in past four months
Gold futures moved higher, but the yellow metal barely budged for the week as stock rallied to all-time highs, helping to undercut some demand for assets perceived as havens. Gold for Feb delivery gained $9.80 (0.6%) to settle at $1560 an ounce. For the week, gold futures gained about 20¢ higher than last Fri's settlement (call that even), following gains for each of the last 3 weeks. Gold prices briefly pared earlier gains after a US housing report came in at its best level in about 13 years. Housing starts & permits jumped 16.9% to an annual rate of 1.608M units last month, the highest level since 2006. Consumer sentiment index in January, meanwhile, slipped to 99.1 from 99.3 in Dec. Bullion prices have managed to hold above a line viewed as support by technical analyst at $1550, offering a modicum of optimism for gold bulls. Traders also digested readings of expansion for China, which showed economic growth picked up in Dec. However, growth slowed to new multi-decade low of 6.1% in 2019.
Gold futures gain for the session, but end little changed for the week
Oil futures ended with a modest gain, but registered a loss for a 2nd week in a row as traders continued to weigh the prospects for energy demand in the wake of the China-US trade deal & Senate approval of the US-Mexico-Canada trade pact this week. West Texas Intermediate (WTI) crude for Feb delivery ended little changed, up 2¢, to settle at $58.54 a barrel after rising 1.2% yesterday. Mar Brent, the global benchmark, advanced 23¢ (0.4%) to end at $64.85 a barrel, following a 1% gain a day ago. However, for the week both contracts suffered declines for a 2nd week. Brent saw a weekly loss of about 0.2%. while WTI saw a nearly 0.9% weekly skid. Oil prices dipped lower today shortly after Baker Hughes reported that the number of active US oil rigs rose by 14 to 673 this week. That followed declines in each of the past 3 weeks. Data from China, meanwhile, showed slower economic growth last year, clouding the prospects for crude uptake. Chinese officials said its country saw economic growth falling to anew multi-decade low of 6.1% in 2019.
Oil futures suffer a second weekly decline
Demand for stocks continues to be strong as the market averages keep hitting new highs. Talk of lower taxes may fuel more interest in buying stocks. However the goings on in DC represent a big unknown.
Dow Jones Industrials
No comments:
Post a Comment