Dow rose 10 (session lows), advancers over decliners about 5-4 & NAZ added only 4. The MLP index was fractionally lower to 211 (about even in the last week) & the REIT index fell 1+ to the 415s, Junk bond funds crawled higher & Treasuries rose in price. Oil slid lower in the 53s & gold went up 4 to 1574 (more 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 Federal Reserve voted unanimously to hold interest rates steady during its first policy meeting of the year, reaffirming its wait-and-see approach despite growing concerns about China's widening coronavirus outbreak. In a move that was widely expected, the FOMC, during its 2-day meeting this week, kept the benchmark federal funds rate on hold at 1.5-1.75%, where it has been for the past few months. In their statement, policymakers at the central bank cited low unemployment, solid job growth & inflation below their preferred 2% level as the reason for pressing pause on rates. "The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate," the Fed said. Job creation averaged 176K per month last year, while unemployment is currently at 3.5%, a ½-century low. Still, the manufacturing sector has continued to slow. In Dec, it contracted to its lowest level in over 10 years, spurring concerns about the strength of the economy. Policymakers adjusted their statement to say the current stance of monetary policy is appropriate to support "inflation returning to the committee's symmetric 2 percent objective." That modified the previous language, which said the Fed was looking to get inflation "near" the benchmark it considers healthy. It marked the 2nd straight month where the US central vote made no changes to rates, following 3 modest consecutive cuts last year, part of what Chairman Jerome Powell described as a "mid-cycle adjustment." Some economists noted the rapidly spreading coronavirus — more than 130 have died from the mysterious illness, while Chinese officials confirmed more than 6K cases — had emerged as an unexpected risk to the global economy. Multiple companies & countries are limiting travel to & from mainland China, evacuating citizens & scaling back operations, raising concerns about the health of the world's 2nd-largest economy.
France has confirmed a 5th case of the coronavirus — the daughter of an 80-year old man already hospitalized with the disease, according to French health minister Agnes Buzyn. France confirmed its first 3 cases of the Wuhan coronavirus on Fri & a 4th case yesterday. A first flight to repatriate French nationals from the Chinese town of Wuhan, the epicentre of the virus, was leaving France last night & a 2nd flight would occur tomorrow, she said. Boeing (BA), a Dow stock, raised concerns about the outbreak as airlines cut back service to China. Global air traffic growth in Nov rose by just 3.3% from a year earlier, reflecting “the continuing influence of slower economic activity, geopolitical tensions and other disruptions,” according to the Intl Air Transport Association. Boeing (BA), a Dow stock, CFO Greg Smith noted the slower-than-usual growth, saying the “impact of the coronavirus on near-term traffic growth is clearly a watch item this year.” The coronavirus outbreak is driving up demand for some of Dow's cleaning products that are used in household cleaning items, CEO Jim Fitterling said. Fitterling added that Dow’s cleaning products are seeing increased demand due to the rapidly spreading virus. “We’ve seen some demand pull from coronavirus on things like cleaning materials for disinfectants, like you would use in household cleaners; non-wovens for masks and wipes and those kinds of things,” Fitterling added. “And I think as you see people stay at home and use more food from the grocery store, you’re going to see a pull on packaging as well.”
Coronavirus live updates: Outbreak is ‘grave concern’ as infections spread beyond China
The US trade deficit in goods jumped 8.5% in Dec as tensions with China eased & imports surged, potentially signaling somewhat softer GDP in Q4. The gap in goods climbed to $68.3B in the final month of 2019 from $63B in Nov, the gov said. The wider deficit could spur tradeers to trim forecasts for GDP in the 4th quarter below 2%. Bigger deficits subtract from GDP. Advance figures for wholesale trade, meanwhile, slipped 0.1% while retail inventories were unchanged in Dec. They were also weaker than expected. Exports of goods rose 0.3% in Dec, but imports shot up 2.9% to break a string of 3 straight declines. Imports fell in the fall after the US raised tariffs again on China in Sep & companies sought to time future shipments based on the prospects of even higher tariffs. Imports of consumer goods made in China were particularly hard hit. The easing of trade tensions between the 2 large economies in Dec, however, led to a snapback in imports in the month. Imports could also rise again in Jan in the wake of the Phase One deal with China that was signed on Jan 15 & that's been seen as a truce of sorts. The US gov will release overall trade numbers for Dec next week, but the size of the deficit is closely tied to changes in the exports & imports of goods. The larger trade deficit in Dec prompted some forecasters to trim estimates for US economic growth in Q4. Yet it doesn't show any fundamental change in an economy that's growing around 2% a year & shows little sign of faltering.
Gold futures finished with a modest gain, as traders weighed the spread of coronavirus cases & its potential impact on the global economy. In electronic trading today, prices held ground near the day’s settlement as the Federal Reserve left its benchmark fed-funds interest rate unchanged in at a 1.50%-1.75% range. Gold for Feb delivery settled at $1570 an ounce, essentially flattish. In electronic trading shortly after the decision, prices traded at $1572.
Gold ends slightly higher as traders eye economic impact of coronavirus
The markets were strong until the last 2 hours of trading. Sellers took over & the Dow dropped about 150, closing near its lows for the session. Earnings are coming in reasonably good. However the virus which started in China is gaining importance. Already many companies have been affected & matters will likely get worse. Meanwhile the FOMC had its big meeting which hardly got any notice, partially because no major changes in interest rates were expected.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Federal Reserve voted unanimously to hold interest rates steady during its first policy meeting of the year, reaffirming its wait-and-see approach despite growing concerns about China's widening coronavirus outbreak. In a move that was widely expected, the FOMC, during its 2-day meeting this week, kept the benchmark federal funds rate on hold at 1.5-1.75%, where it has been for the past few months. In their statement, policymakers at the central bank cited low unemployment, solid job growth & inflation below their preferred 2% level as the reason for pressing pause on rates. "The Committee will continue to monitor the implications of incoming information for the economic outlook, including global developments and muted inflation pressures, as it assesses the appropriate path of the target range for the federal funds rate," the Fed said. Job creation averaged 176K per month last year, while unemployment is currently at 3.5%, a ½-century low. Still, the manufacturing sector has continued to slow. In Dec, it contracted to its lowest level in over 10 years, spurring concerns about the strength of the economy. Policymakers adjusted their statement to say the current stance of monetary policy is appropriate to support "inflation returning to the committee's symmetric 2 percent objective." That modified the previous language, which said the Fed was looking to get inflation "near" the benchmark it considers healthy. It marked the 2nd straight month where the US central vote made no changes to rates, following 3 modest consecutive cuts last year, part of what Chairman Jerome Powell described as a "mid-cycle adjustment." Some economists noted the rapidly spreading coronavirus — more than 130 have died from the mysterious illness, while Chinese officials confirmed more than 6K cases — had emerged as an unexpected risk to the global economy. Multiple companies & countries are limiting travel to & from mainland China, evacuating citizens & scaling back operations, raising concerns about the health of the world's 2nd-largest economy.
Fed keeps interest rates steady, maintains wait-and-see approach
France has confirmed a 5th case of the coronavirus — the daughter of an 80-year old man already hospitalized with the disease, according to French health minister Agnes Buzyn. France confirmed its first 3 cases of the Wuhan coronavirus on Fri & a 4th case yesterday. A first flight to repatriate French nationals from the Chinese town of Wuhan, the epicentre of the virus, was leaving France last night & a 2nd flight would occur tomorrow, she said. Boeing (BA), a Dow stock, raised concerns about the outbreak as airlines cut back service to China. Global air traffic growth in Nov rose by just 3.3% from a year earlier, reflecting “the continuing influence of slower economic activity, geopolitical tensions and other disruptions,” according to the Intl Air Transport Association. Boeing (BA), a Dow stock, CFO Greg Smith noted the slower-than-usual growth, saying the “impact of the coronavirus on near-term traffic growth is clearly a watch item this year.” The coronavirus outbreak is driving up demand for some of Dow's cleaning products that are used in household cleaning items, CEO Jim Fitterling said. Fitterling added that Dow’s cleaning products are seeing increased demand due to the rapidly spreading virus. “We’ve seen some demand pull from coronavirus on things like cleaning materials for disinfectants, like you would use in household cleaners; non-wovens for masks and wipes and those kinds of things,” Fitterling added. “And I think as you see people stay at home and use more food from the grocery store, you’re going to see a pull on packaging as well.”
Coronavirus live updates: Outbreak is ‘grave concern’ as infections spread beyond China
The US trade deficit in goods jumped 8.5% in Dec as tensions with China eased & imports surged, potentially signaling somewhat softer GDP in Q4. The gap in goods climbed to $68.3B in the final month of 2019 from $63B in Nov, the gov said. The wider deficit could spur tradeers to trim forecasts for GDP in the 4th quarter below 2%. Bigger deficits subtract from GDP. Advance figures for wholesale trade, meanwhile, slipped 0.1% while retail inventories were unchanged in Dec. They were also weaker than expected. Exports of goods rose 0.3% in Dec, but imports shot up 2.9% to break a string of 3 straight declines. Imports fell in the fall after the US raised tariffs again on China in Sep & companies sought to time future shipments based on the prospects of even higher tariffs. Imports of consumer goods made in China were particularly hard hit. The easing of trade tensions between the 2 large economies in Dec, however, led to a snapback in imports in the month. Imports could also rise again in Jan in the wake of the Phase One deal with China that was signed on Jan 15 & that's been seen as a truce of sorts. The US gov will release overall trade numbers for Dec next week, but the size of the deficit is closely tied to changes in the exports & imports of goods. The larger trade deficit in Dec prompted some forecasters to trim estimates for US economic growth in Q4. Yet it doesn't show any fundamental change in an economy that's growing around 2% a year & shows little sign of faltering.
U.S. trade deficit in goods jumps 8.5% in December, points to softer 4th quarter GDP
Gold futures finished with a modest gain, as traders weighed the spread of coronavirus cases & its potential impact on the global economy. In electronic trading today, prices held ground near the day’s settlement as the Federal Reserve left its benchmark fed-funds interest rate unchanged in at a 1.50%-1.75% range. Gold for Feb delivery settled at $1570 an ounce, essentially flattish. In electronic trading shortly after the decision, prices traded at $1572.
Gold ends slightly higher as traders eye economic impact of coronavirus
The markets were strong until the last 2 hours of trading. Sellers took over & the Dow dropped about 150, closing near its lows for the session. Earnings are coming in reasonably good. However the virus which started in China is gaining importance. Already many companies have been affected & matters will likely get worse. Meanwhile the FOMC had its big meeting which hardly got any notice, partially because no major changes in interest rates were expected.
Dow Jones Industrials
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