Dow tumbled 418, decliners over advancers about 2-1 & NAZ sank 336. The MLP index shot up 4 & the REIT index fell 1+ to 448. Junk bond funds fluctuated & Treasuries were weak again bringing higher yields. Oil jumped 2 to the 77s & gold gained 12 to 1770.
AMJ (Alerian MLP index tracking fund)
The Biden administration is announcing changes in trade policy with China aimed at forcing the country to follow thru on "unfilled commitments" in the Phase One Trade Agreement. The US plans to use "all available tools" to enforce the Phase One Trade agreement, though the officials declined to specifically what enforcement mechanisms the US would be using. The move comes as top US Trade Representative Katherine Tai is set to announce that China has not been complying with the deal struck by former Pres Trump's administration. China agreed to purchase an additional $200B in US goods during a 2-year period, a pledge officials say the country has so far failed to follow thru on. Part of the new plan will involve the US restarting a targeted tariff exclusion process, according to senior administration officials. The US will also be engaging with allies in hopes of promoting fair, competitive, intl trading. The move will be one of the first times the administration has forcefully pushed back against China, which is so far estimated to only be running at 62% of the trade agreement's targets for purchases of US goods & services. Tai is set to resume direct negotiations with her Chinese counterpart, where she will emphasize the need for China to follow thru on the rest of their commitments.
Biden enforcing Trump-era deal with China, hits Beijing with new regulations
Treasury yields kicked off the first full trading week in Oct slightly higher. The yield on the benchmark 10-year Treasury note added 3.6 basis points, rising to 1.503% & the yield on the 30-year Treasury bond also climbed 3.8 basis points to 2.077%. Yields move inversely to prices & 1 basis point is equal to 0.01%. The 10-year Treasury yield hit 1.56% last week, its highest point since Jun, with investors concerned about inflationary pressures & tighter monetary policy. However, the benchmark yield pulled back on Fri. The main focus for investors this week will be ADP's Sep employment change report on Wed & the nonfarm payroll report for last month, due out on Fri.
Treasury yields rise slightly to start the first full trading week of October
Ford's (F) US vehicle sales showed signs of improvement during Q3, but still fell by 27.4% from last year as an ongoing shortage
of semiconductor chips interrupted vehicle production. The drastic
decline was narrower than expected, but wider than the
overall industry that was estimated to be down 13-14%
from the same time last year. Cox Automotive expected Ford's sales to
be down by 37.3% during Q3, while Edmunds forecast a
29.3% decline. A
silver lining is sales improved during the qtr from losses
of more than 30% in Jul & Aug to 17.7% in Sep, signaling
better supply of semiconductor chips. Its vehicle inventory also
improved to 236K cars & trucks, up 21K units compared with the
start of Sep. Ford sold 401K vehicles in Q3, including more than
156K in Sep Its sales heading into Oct were nearly 1.4M, down by 7% compared with the first 3 qtrs of 2020. Ford said reservations for its upcoming F-150 Lightning electric pickup have topped more than 150K. That compares with 100K reservations at the end of Q2. The stock added 38¢.
If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F?a_aid=CD3289&a_bid=6ae5b6f7
Ford’s sales improving but still down by 27.4% in the third quarter
Monthly data is coming this week which will be followed by earnings. The Dow's performance shown below indicates expectations for Sep data are only so-so. Meanwhile the pork filled stimulus bills are stuck in the mud & that condition is expected to last all month, if not longer. Nervous investors are buying gold.
Dow Jones Industrials
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