Dow dropped 233, decliners over advancers about 5-4 & NAZ lost 71. The MLP index added 2+ to the 222s & the REIT index went up 3 to the 402s. Junk bond funds continued lower & Treasuries were in strong demand. Oil shot up about 2 to the 63s & gold surged 22 to 1550 (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)
Policymakers at the Federal Reserve agreed during their 2-day meeting in Dec the current interest rate range will remain appropriate for "a time," so long as the economy stays on its current path of growth. Minutes from the Federal Open Market Committee's Dec 11-12 revealed that policymakers believed maintaining the current rate of 1.5-1.75% would cushion the record-long economic expansion from a global growth slowdown. In Dec, the FOMC voted unanimously to hold the benchmark federal funds rate steady at 1.5-1.75% this year, bringing an end to the "mid-cycle adjustment" that included 3 minor interest rate cuts. Chair Jerome Powell acknowledged in Dec that it would take a "really significant" rise in inflation above the Fed's preferred 2% benchmark before policymakers reversed course & returned to interest rate hikes. "We think our policy rate is appropriate and will remain appropriate as long as income data are broadly in keeping with our outlook," he said. Still, some policymakers voiced concerns that interest rates are too low at their current level, making it more difficult for the central bank to address a recession in the future. “A few participants raised the concern that keeping interest rates low over a long period might encourage excessive risk-taking, which could exacerbate imbalances in the financial sector,” the minutes said.
The US military will send about 3500 additional soldiers to the Middle East following the killing of Iranian Gen. Qasem Soleimani less than a day earlier, according to sources. The new troops are being deployed to Iraq, Kuwait & other parts of the region. The deployment of one brigade of the 82nd Airborne Division, 700 of which have already been dispatched to the Middle East, are ordered to serve as a response to threats throughout the region. But the defense officials maintain that the additional soldiers is not a direct response to Soleimani's death, which has enraged Iran's leadership & spurred incendiary threats of vengeance from the oil-rich Middle Eastern nation. Rather, it is rather a continuation of an earlier announcement this week to send troops to the region. The US announced yesterday that it carried out a surprise airstrike in Baghdad that killed Soleimani, one of Iran’s most powerful figures who has been blamed for the deaths of hundreds of Americans. The State Dept has urged US citizens to leave Iraq. The Defense Dept said that the “decisive defensive action” was taken “to protect U.S. personnel abroad,” claiming that Soleimani “was actively developing plans to attack American diplomats and service members in Iraq and throughout the region.” Soleimani also gave a green light for the attacks on the US Embassy in Baghdad that took place days earlier, according to the Pentagon. The new deployment is the latest in a series of aggressive moves between the US & Iran. Over the weekend, the US carried out military strikes in Iraq & Syria against an Iran-backed Shiite Muslim militia group. A wave of protests in Iraq followed, culminating in the attack on Embassy on New Year's Eve. Pres Trump defended the airstrike in a pair of tweets. “General Qassem Soleimani has killed or badly wounded thousands of Americans over an extended period of time, and was plotting to kill many more...but got caught!” Trump wrote. “He should have been taken out many years ago!”
US to deploy 3,500 additional troops to the Middle East after Iranian general killed
Fed’s Robert Kaplan is OK with keeping rates steady but wants to look at the balance sheet
General Motors' (GM) sales slipped in 2019 as it discontinued some models & demand for its profitable pickups and full-size SUVs fell. GM said it sold nearly 2.9M vehicles last year, a 2.3% decline compared with 2018. That includes a drop of 6.3% to 736K vehicles in Q4 from the last 3 months of 2018. The automaker's results are in line with expectations for the company, however worse than the 1% decline expected for the overall industry in 2019. GM sold more than 1M crossovers for the 2nd year in a row, an increase of 12.7% from 2018. That wasn't enough to make up for the 30.5% decline in passenger cars & a 2% slide in trucks, which include pickups, fulls-size SUVs & vans. “We’ve focused our resources on what our customers want – crossovers and trucks – and that has paid off,” Kurt McNeil, VP of US sales operations at GM, said. In Q4, GM said crossover sales rose 5.8% while demand for passenger cars plummeted 35.1% & trucks declined 5.9%. All of GM's brands reported sales declines in Q4, led by an 8.5% drop for GMC & 6.1% fall for Chevrolet. Buick dropped 4.3%, while Cadillac slid 2.2%. Analysts expected US light-duty vehicle sales declined about 1% last year to roughly 17M vehicles compared with 2018. Such results are considered healthy but would mark the lowest sales since 16.5M vehicles in 2014. The stock fell 70¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM’s 2019 sales decline after discontinuing some models and demand falls for trucks, SUVs
Gold futures soared on haven-related buying after a US airstrike killed a top Iranian military commander, sparking a vow of vengeance from Tehran & a stock-market selloff. Gold for Feb delivery added $24.30 (1.6%) to settle at $1552 an ounce, a level last seen on Sep 4 when bullion closed at $1560 an ounce. Gold & other haven assets were boosted, while oil prices jumped & global stocks came under pressure following a US airstrike at Baghdad's airport killed Qassem Soleimani, leader of the foreign wing of Iran's Islamic Revolutionary Guard Corps. The Dow recovered some earlier losses but was still trading 200 points lower, a day after major US stock indexes scored a new round of records. For the week, the most-active gold contract gained 2.3%, its 2nd week of gains. The Pentagon said Pres Trump ordered the strike in a defensive action, alleging that Soleimani had planned to direct attacks on US diplomats & service members in the region. Iran's supreme leader, Ayatollah Ali Khamenei, declared 3 days of mourning for Soleimani's death & said that a “hard revenge awaits criminals.” Weak data on the US manufacturing sector also weighed on riskier assets, with the closely-watched ISM manufacturing purchasing managers index missing forecasts & plunging to a more than 10-year low of 47.2 in Dec, marking its 5th straight month of contraction.
Gold settles at 4-month high as Middle East tensions drive haven buying
Selling wasn't too bad today all considered. Adding to downward pressure on stock prices, the market was very overbought. Over the weekend there will be more information on the US strike which will drive the stock market next week.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Policymakers at the Federal Reserve agreed during their 2-day meeting in Dec the current interest rate range will remain appropriate for "a time," so long as the economy stays on its current path of growth. Minutes from the Federal Open Market Committee's Dec 11-12 revealed that policymakers believed maintaining the current rate of 1.5-1.75% would cushion the record-long economic expansion from a global growth slowdown. In Dec, the FOMC voted unanimously to hold the benchmark federal funds rate steady at 1.5-1.75% this year, bringing an end to the "mid-cycle adjustment" that included 3 minor interest rate cuts. Chair Jerome Powell acknowledged in Dec that it would take a "really significant" rise in inflation above the Fed's preferred 2% benchmark before policymakers reversed course & returned to interest rate hikes. "We think our policy rate is appropriate and will remain appropriate as long as income data are broadly in keeping with our outlook," he said. Still, some policymakers voiced concerns that interest rates are too low at their current level, making it more difficult for the central bank to address a recession in the future. “A few participants raised the concern that keeping interest rates low over a long period might encourage excessive risk-taking, which could exacerbate imbalances in the financial sector,” the minutes said.
Fed expects interest rates to hold steady for 'a time,' minutes reveal
The US military will send about 3500 additional soldiers to the Middle East following the killing of Iranian Gen. Qasem Soleimani less than a day earlier, according to sources. The new troops are being deployed to Iraq, Kuwait & other parts of the region. The deployment of one brigade of the 82nd Airborne Division, 700 of which have already been dispatched to the Middle East, are ordered to serve as a response to threats throughout the region. But the defense officials maintain that the additional soldiers is not a direct response to Soleimani's death, which has enraged Iran's leadership & spurred incendiary threats of vengeance from the oil-rich Middle Eastern nation. Rather, it is rather a continuation of an earlier announcement this week to send troops to the region. The US announced yesterday that it carried out a surprise airstrike in Baghdad that killed Soleimani, one of Iran’s most powerful figures who has been blamed for the deaths of hundreds of Americans. The State Dept has urged US citizens to leave Iraq. The Defense Dept said that the “decisive defensive action” was taken “to protect U.S. personnel abroad,” claiming that Soleimani “was actively developing plans to attack American diplomats and service members in Iraq and throughout the region.” Soleimani also gave a green light for the attacks on the US Embassy in Baghdad that took place days earlier, according to the Pentagon. The new deployment is the latest in a series of aggressive moves between the US & Iran. Over the weekend, the US carried out military strikes in Iraq & Syria against an Iran-backed Shiite Muslim militia group. A wave of protests in Iraq followed, culminating in the attack on Embassy on New Year's Eve. Pres Trump defended the airstrike in a pair of tweets. “General Qassem Soleimani has killed or badly wounded thousands of Americans over an extended period of time, and was plotting to kill many more...but got caught!” Trump wrote. “He should have been taken out many years ago!”
US to deploy 3,500 additional troops to the Middle East after Iranian general killed
Dallas Federal Reserve Pres Robert Kaplan
said he's comfortable with where interest rates are but thinks the
central bank needs to talk this year about the size of its balance
sheet. Kaplan
said economic growth is likely to grow in excess of 2% this year while
inflation remains low, justifying the Fed's stance of likely keeping its
benchmark overnight borrowing rate anchored at 1.5-1.75%. “I
don’t think we should be making any moves at this point on the fed
funds rate,” he added. “We’ll
keep revisiting that as the year goes on.” An issue that could get
more immediate attention is the Fed's balance sheet, which consists
primarily of a portfolio of bonds it has purchased since the financial
crisis. After 2 years of reducing its holdings, the Fed has started
buying again to quell volatility in the overnight borrowing market, or
repo, & to keep its rate within the target range. The balance sheet has since ballooned to more than $4.2T & Kaplan said he is concerned. “Now
that we’ve gotten past year-end, I want to find ways to grow the
balance sheet more slowly,” he added. “That would be my objective. I’m
sure there will be disagreements about that.” Kaplan also
addressed the US strike against Maj Gen Qasem Soleimani. While oil
prices rose today, the gains were somewhat subdued, something Kaplan
attributed to the US & its ability to achieve energy independence. “I
think you would have gotten a different reaction 10 years ago,
certainly 20 years ago,” he said. “We’re much more energy
self-sufficient. Because of that, you see these events in the Middle
East, they’ll have an effect, but it’s going to be more muted than we
might have seen historically.”
Fed’s Robert Kaplan is OK with keeping rates steady but wants to look at the balance sheet
General Motors' (GM) sales slipped in 2019 as it discontinued some models & demand for its profitable pickups and full-size SUVs fell. GM said it sold nearly 2.9M vehicles last year, a 2.3% decline compared with 2018. That includes a drop of 6.3% to 736K vehicles in Q4 from the last 3 months of 2018. The automaker's results are in line with expectations for the company, however worse than the 1% decline expected for the overall industry in 2019. GM sold more than 1M crossovers for the 2nd year in a row, an increase of 12.7% from 2018. That wasn't enough to make up for the 30.5% decline in passenger cars & a 2% slide in trucks, which include pickups, fulls-size SUVs & vans. “We’ve focused our resources on what our customers want – crossovers and trucks – and that has paid off,” Kurt McNeil, VP of US sales operations at GM, said. In Q4, GM said crossover sales rose 5.8% while demand for passenger cars plummeted 35.1% & trucks declined 5.9%. All of GM's brands reported sales declines in Q4, led by an 8.5% drop for GMC & 6.1% fall for Chevrolet. Buick dropped 4.3%, while Cadillac slid 2.2%. Analysts expected US light-duty vehicle sales declined about 1% last year to roughly 17M vehicles compared with 2018. Such results are considered healthy but would mark the lowest sales since 16.5M vehicles in 2014. The stock fell 70¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM’s 2019 sales decline after discontinuing some models and demand falls for trucks, SUVs
Gold futures soared on haven-related buying after a US airstrike killed a top Iranian military commander, sparking a vow of vengeance from Tehran & a stock-market selloff. Gold for Feb delivery added $24.30 (1.6%) to settle at $1552 an ounce, a level last seen on Sep 4 when bullion closed at $1560 an ounce. Gold & other haven assets were boosted, while oil prices jumped & global stocks came under pressure following a US airstrike at Baghdad's airport killed Qassem Soleimani, leader of the foreign wing of Iran's Islamic Revolutionary Guard Corps. The Dow recovered some earlier losses but was still trading 200 points lower, a day after major US stock indexes scored a new round of records. For the week, the most-active gold contract gained 2.3%, its 2nd week of gains. The Pentagon said Pres Trump ordered the strike in a defensive action, alleging that Soleimani had planned to direct attacks on US diplomats & service members in the region. Iran's supreme leader, Ayatollah Ali Khamenei, declared 3 days of mourning for Soleimani's death & said that a “hard revenge awaits criminals.” Weak data on the US manufacturing sector also weighed on riskier assets, with the closely-watched ISM manufacturing purchasing managers index missing forecasts & plunging to a more than 10-year low of 47.2 in Dec, marking its 5th straight month of contraction.
Gold settles at 4-month high as Middle East tensions drive haven buying
Selling wasn't too bad today all considered. Adding to downward pressure on stock prices, the market was very overbought. Over the weekend there will be more information on the US strike which will drive the stock market next week.
Dow Jones Industrials
No comments:
Post a Comment