Dow rose 88, decliners just ahead of advancers & NAZ rose 63 (new records for both). The MLP index dropped 3+ to the 203s & the REIT index added 1+ to the 417s. Junk bond funds hardly budged & Treasuries crawled higher in price. Oil edged higher to the 51s & gold added 7 to 1570 (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)
Dallas Federal Reserve Bank Pres Robert Kaplan said that he expects “solid” economic growth this year, as easing trade tensions have lessened downward pressure on global growth, manufacturing & business investment. Kaplan worried last year that trade uncertainty would weigh on consumer spending more than it turned out to have done, he told a University of Texas at Austin's McCombs School of Business group. But with the US inking an initial trade deal with China, “we think we are going to have a solid year of growth in 2020” of about 2.25%, he said, though he added his outlook would be firmer were it not for the “wildcard” of the new coronavirus in China & the situation at Boeing (BA), a Dow stock.
One by one, air carriers have cut service after demand fell sharply & govs took more drastic measures that they say aim to curb the spread of the disease, which has sickened more than 28K, most of them in China, & killed at least 565, according to health officials. These steps have left China, the world's 2nd-largest air travel market after the US, more isolated. Airlines in dozens of countries — from New Zealand to Finland to the United Arab Emirates — have scaled back service or in the case of US airlines canceled flights altogether to the Chinese mainland & Hong Kong as the coronavirus spreads, a factor that will drive down airlines' 2020 revenue & deprive other segments of the travel industry, including hotels & retailers, of high-spending tourists. The outbreak has some travelers exercising more caution with their travel, even for destinations other than China. The US instituted Travel restrictions that include requiring returning US citizens who have been in Hubei province — where Wuhan, the epicenter of the virus, is located — to face mandatory, 14-day quarantines. The Trump administration has ordered self-quarantines for US citizens who have been in other parts of mainland China. Additionally, foreigners who have been in China in the last 2 weeks, except for immediate family of US citizens & permanent residents & a few others, won't be allowed in at all. US Customs & Border Protection says it processed an average of 372K at US airports each day in the last fiscal year, although Feb travel demand is much lower than in the summer. Some 14K flew into the US from China each day that year — almost 5M that year.
China grows isolated as airlines cancel more than 46,000 flights amid coronavirus epidemic
Global oil demand to peak around 2040, IMF says
The number of Americans who applied for unemployment benefits at the end of Jan fell close to a postrecession low, signaling the US labor market is still rock solid despite stiffer economic headwinds. Initial jobless claims declined 15K to 202K last week, the gov said. The figures are seasonally adjusted. The forecast called for a 215K reading. The more stable monthly average of jobless claims, which filters out the weekly ups & downs, dropped 3K to 212K. New unemployment applications are seen as a rough measure of how many people are losing their jobs. They touched a 50-year low of 193K last Apr & have hovered in the low 200Ks since then. The number of people already collecting unemployment benefits, meanwhile, increased by 48K to 1.75M. The creation of more than 20M new jobs in the past decade has slashed unemployment to a 50-year low of 3.5%, giving the economy a strong foundation to prolong a record expansion that will turn 11 years old in Jun. Although hiring has slowed, the US is still adding more than enough jobs to nudge the unemployment rate even lower. The economy likely created 164K new jobs in the first month of 2020. The Jan jobs report comes out tomorrow before the market opens.
AMJ (Alerian MLP Index tracking fund)
Dallas Federal Reserve Bank Pres Robert Kaplan said that he expects “solid” economic growth this year, as easing trade tensions have lessened downward pressure on global growth, manufacturing & business investment. Kaplan worried last year that trade uncertainty would weigh on consumer spending more than it turned out to have done, he told a University of Texas at Austin's McCombs School of Business group. But with the US inking an initial trade deal with China, “we think we are going to have a solid year of growth in 2020” of about 2.25%, he said, though he added his outlook would be firmer were it not for the “wildcard” of the new coronavirus in China & the situation at Boeing (BA), a Dow stock.
Fed's Kaplan says he expects solid U.S. growth this year
One by one, air carriers have cut service after demand fell sharply & govs took more drastic measures that they say aim to curb the spread of the disease, which has sickened more than 28K, most of them in China, & killed at least 565, according to health officials. These steps have left China, the world's 2nd-largest air travel market after the US, more isolated. Airlines in dozens of countries — from New Zealand to Finland to the United Arab Emirates — have scaled back service or in the case of US airlines canceled flights altogether to the Chinese mainland & Hong Kong as the coronavirus spreads, a factor that will drive down airlines' 2020 revenue & deprive other segments of the travel industry, including hotels & retailers, of high-spending tourists. The outbreak has some travelers exercising more caution with their travel, even for destinations other than China. The US instituted Travel restrictions that include requiring returning US citizens who have been in Hubei province — where Wuhan, the epicenter of the virus, is located — to face mandatory, 14-day quarantines. The Trump administration has ordered self-quarantines for US citizens who have been in other parts of mainland China. Additionally, foreigners who have been in China in the last 2 weeks, except for immediate family of US citizens & permanent residents & a few others, won't be allowed in at all. US Customs & Border Protection says it processed an average of 372K at US airports each day in the last fiscal year, although Feb travel demand is much lower than in the summer. Some 14K flew into the US from China each day that year — almost 5M that year.
China grows isolated as airlines cancel more than 46,000 flights amid coronavirus epidemic
Global oil demand will peak around 2040 – or “much
sooner” – the IMF said in a new report on
the future of oil. The IMF said that this could have a
“significant” impact on oil-exporting countries, predominantly those in
the Middle East whose existing financial wealth could be depleted in the
next 15 years if major reforms aren't undertaken. “Growth
of global oil demand will significantly decelerate, and its level could
peak in the next two decades,” the IMF said in its report entitled,
“The Future of oil and fiscal sustainability in the GCC Region.” The IMF said analysis of past oil market
developments revealed “a strong and sustained declining trend in the
global oil demand, after accounting for income and population growth.” This
reflected a range of factors, the IMF added, such as long-term
improvement in energy efficiency & substitution away from oil, trends
that had so far been “veiled by the effects of economic and population
expansion.” “But it is poised to become more visible in the coming
years, resulting in a path of gradually slowing—and eventually
declining—global demand for oil. The latter would peak by around 2040 in
our benchmark projection or much sooner in scenarios of stronger
regulatory push for environmental protection and faster improvements in
energy efficiency.” Growth of global demand for natural gas is
also expected to slow, the Fund said, “although it is expected to remain
positive in the coming decades.” The
IMF is not the first to make predictions about a decline in global oil
demand. In late 2019, Neil Atkinson, head of the oil industry &
markets division at the International Energy Agency, said that
population growth remained the key driving force for oil demand, which he said could peak in the 2030s. “If
we have a much more business-as-usual (approach) with much more limited
(environmental) policy implementation then the profile of oil demand
will be of continued growth. But if the world does implement policies
more rigorously, as it’s showing signs of doing today, then the peak
could come in the late 2020s, 2030s,” he said. “We don’t know that
but we do know though is that even when oil demand does peak at some
point in the future, it isn’t going to drop off a cliff because
substitute-ability for oil in so many sectors is still elusive –
shipping, aviation, trucking, petrochemicals – there are still huge
driving forces (for oil demand),” Atkinson added. He said Saudi Arabia, the 2nd largest oil
producer in the world after the US & ahead of Russia, was a
cornerstone of that future oil supply. “There’s going to be rising
demand for at least the next decade for oil products, possible longer,
and this is cementing their role as the cornerstone player in global
markets, the most reliable and biggest supplier in markets,” he said.
Global oil demand to peak around 2040, IMF says
The number of Americans who applied for unemployment benefits at the end of Jan fell close to a postrecession low, signaling the US labor market is still rock solid despite stiffer economic headwinds. Initial jobless claims declined 15K to 202K last week, the gov said. The figures are seasonally adjusted. The forecast called for a 215K reading. The more stable monthly average of jobless claims, which filters out the weekly ups & downs, dropped 3K to 212K. New unemployment applications are seen as a rough measure of how many people are losing their jobs. They touched a 50-year low of 193K last Apr & have hovered in the low 200Ks since then. The number of people already collecting unemployment benefits, meanwhile, increased by 48K to 1.75M. The creation of more than 20M new jobs in the past decade has slashed unemployment to a 50-year low of 3.5%, giving the economy a strong foundation to prolong a record expansion that will turn 11 years old in Jun. Although hiring has slowed, the US is still adding more than enough jobs to nudge the unemployment rate even lower. The economy likely created 164K new jobs in the first month of 2020. The Jan jobs report comes out tomorrow before the market opens.
New U.S. jobless claims fall 15,000 to 202,000 and return close to a 50-year low
Gold futures tallied, for a 2nd session, as some experts foresee a lower-for-longer, interest-rate regime buttressing the yellow metal, even as anxieties around a novel strain of coronavirus in China appeared to ebb. Gold for Apr delivery added $7.20 (0.5%) to settle at $1570 an ounce, after rising 0.5% in the previous session. The modest gains come as stocks in the US were on track for a 4th straight gain, after China announced it would halve tariffs on $75B of US imports, starting next week, following the signing of the phase one US-China trade deal in Jan. The tariff reductions come as coronavirus has claimed 565 lives & infected more than 28K, according to China's National Health Commission. Values for gold had edged back slightly today but then resumed an advance after a report on US initial jobless claims declined by 15K to 202K last week, better than.the forecast for 215K. Separately, a report on American workers productivity showed the fastest annual pace of gains in 9 years & productivity snapped back with a 1.4% increase in Q4 after a small decline in the autumn.
Gold prices tally a 2nd day of gains
Oil futures ended on a mixed note, with US prices up but global prices down, as a committee of OPEC members & their allies advocated for cuts to global production to stabilize slumping crude values. The proposal, however, encountered resistance from Russia, & it requires official approval from ministers of OPEC, according to several news reports. The recommendation was made as oil prices have taken a hit from expectations of a slowdown in energy demand, fed by the spread of coronavirus in China. The OPEC+ Joint Technical Committee (JTC) recommended a cut to production of its members & other allies of 600K barrels a day, according to several news agencies. The JTC meeting in Vienna had been scheduled to end yesterday, but was extended to an unplanned 3rd day. However, the committee isn't a decision-making body & the recommendation must be weighed by OPEC's oil ministers. Moreover, one key ally & member of OPEC+, Russia, has expressed its reluctance for deeper reductions to global output. Alexander Novak, Russia's energy minister, said “I’m not even ready to tell you what we are ready or not ready to do, not fully understanding the situation and clear forecasts for the development of events in connection with coronavirus,” according to the TASS news agency.
U.S., global oil benchmarks split ways as Russia resists deeper OPEC+ output cuts
Little was decided, but stocks managed to record their 4th straight day of advances. Short term, the stock market is overbought. That means profit taking could be around the corner. The Jan jobs report tomorrow will drive stock market trading from today's record closings. Of little notice, NAZ needs another 400+ to top 10K. That will get a lot of attention when it happens & may come soon if the market rally continues.
Dow Jones Industrials
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