Dow inched up 1, advancers over decliners better than 2-1 & NAZ was up 11. The MLP index added 4+ to 252 & the REIT index finished steady near 354. Junk bond funds fluctuated & Treasuries were pretty much even, keeping yields flattish. Oil jumped almost 3 to the high 75s & gold fell 5 to 1982 (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)
Despite recent encouraging signs on inflation, Boston Federal Reserve Pres Susan Collins said that more interest rate hikes could yet be needed. “I understand the tendency to really enjoy good news, and there was some good news in some of the numbers — and I think that we need to appreciate that. But I don’t see additional firming off the table,” the central bank official said. “I think the key point is we need to really stay the course.” Other Fed officials have been saying much of the same, essentially that inflation is showing progress towards the Fed’s 2% 12-month target but still has a way to go. Policymakers are leery over repeating the mistakes of the past, where the Fed quit too early in efforts to bring down inflation & ended up paying for it. Inflation reports this week showed a slowing pace in both consumer & producer prices. However, Collins said recent data has been “noisy.” “We need to look holistically at the data,” she said. “So [there has been] promising news, which is great. But I remain focused on really looking at the kind of full complement of information that we’re getting and making assessments in real time about the right thing to do.” Markets think there's virtually no chance the Fed will hike any more during this cycle. The central bank's benchmark borrowing rate is targeted at 5.25-5.50%, the highest in 22 years. Market pricing projects the Fed will start cutting in May & lop a full percentage off the fed funds rate by the end of 2024, according to the CME Group's FedWatch gauge. Collins noted the progress made in stabilizing the labor market & tightening financial conditions, but said it's “important for us to be patient and recognize that [we’re] far from declaring victory.”
Fed's Susan Collins says more rate hikes can't be taken off the table yet
Early Black Friday discounts were far higher this
Oct compared to prior years, signaling retailers are concerned that
demand could be tepid during the crucial holiday shopping season. Promotions
across a range of categories, including apparel, appliances &
computers, were significantly higher last month than in 2021 & 2022,
data from Adobe Analytics show. For example, the price of apparel online
was 9% lower throughout Oct compared to the beginning of the month,
but in 2021 and 2022, it was just 2% & 5% lower, respectively, the
data show. Out
of 8 categories that are popular during the holiday that Adobe
tracks, only electronics & toys saw fewer discounts last month than
prior years. Adobe's data doesn’t
include promotions at physical retail locations but does cover over 1T visits to US retail websites, 100M SKUs & 18 total
product categories, which it says is more than any other technology
company or research organization. During Oct, discounts were on average as high
as 24.1% for apparel, homewares, electronics, toys & games, sporting
goods & beauty, compared to 16.7% off in 2019 & 12.9% off in 2021,
GlobalData said. On average, 7.8% of all items were on sale at some
point during the month compared to just 4.9% in 2019 & 3.3% in 2021. Overall,
Adobe's digital price index shows prices were lower in Oct compared
to previous years. Last month, prices were down over 6% compared to
last year. In Oct 2022, prices were down just .7% compared to the prior
year & in Oct 2021, prices were up 1.9% compared to the prior year.
Black Friday came early this year, signaling worries about holiday demand
China's Pres Xi Jinping,
fresh off his meeting with Pres Biden this week, was greeted with
applause at a dinner in San Francisco with America's biggest CEOs
topping the guest list. Apple (AAPL), a Dow stock, CEO Tim Cook, Tesla's (TSLA) Elon Musk,
BlackRock’s Larry Fink & FedEx (FDX) CEO Rajesh Subramaniam were among the
execs in attendance, along with high level execs from BA (BA), a Dow stock, Honeywell (HON), as well as Commerce Secretary Gina Raimondo. Some business leaders reportedly shelled out nearly $40K to dine with
Xi, as highlighted by Rep Mike Gallager via X, who made his
first trip to the US in over 6 years to attend the Asia-Pacific
Economic Cooperation summit. Critics say the event is a win for China & not the US economy. "Xi
Jinping faces the worst economic environment in probably 40 years, and
that’s why you see him coming over to court U.S. CEOs" said Mary Kissel,
exec VP, Stephens Inc. "I think this is a propaganda coup for him and I don’t
think it has any economic significance at all" she said. China's economy has been slowing since around 2012 when annual GDP
neared 8%. Stripping out the COVID-19 slide & rebound, growth in 2023
is expected to rise 5.4%, according to the IMF. Kissel also warned about China's infractions, including Xi's support of
Russia against Ukraine, Iran, human rights violations against
the Uyghurs, military sparing with Taiwan & years of intellectual
property theft. Despite the backlash, the US-China Business Council & the
National Committee on US-China Relations, co-hosts of the meeting,
defended the event. "We were honored to host President Xi
consistent with our longstanding tradition of co-hosting events for
visiting leaders from China. These events give people from both
countries the opportunity to hear directly from Chinese and US
government leaders. Constructive communication leads to a more
stable and productive US-China relationship and is in the best interest
of both countries and the global community" the 2 said in a joint
statement.
China's Xi scores 'propaganda coup' with US CEOs
Gold closed with a loss, surrendering early gains despite a falling $, while treasury yields were mixed. Gold for Dec closed down $2 to settle at $1984 per ounce, after earlier touching $1996. A series of economic reports showing a slowing US economy is pushing down the $ to near month lows as investors see scant likelihood of further interest-rate hikes from the Federal Reserve. The ICE dollar index was last seen down 0.44 points to 103.91. Data indicating some weakness in labor markets helped drive market expectations around the Fed & thus drove gold higher today. This comes after a retrenchment in some of the risk-off flows that has occurred as concerns about a broader Middle East conflict have ebbed. Treasury yields were mixed mid in the PM. The 2-year note was last seen paying 4.905%, up 6.3 basis points, while the yield on the 10-year note was last seen up 0.3 basis points to 4.435%.
Gold Closes Lower as the Dollar Weakens as Investors See Little Chance of Further US Interest-Rate Hikes
Oil futures climbed, recouping most of the losses seen a day earlier that pulled prices to their lowest since Jul after it was reported that Saudi Arabia is planning to prolong its voluntary oil production cut into next year. Another report said that an additional OPEC+ cut of up to 1M barrels per day could be on the table at the group's Nov 26 meeting. Some members of OPEC+ are angry over the humanitarian crisis in Gaza & may look to send a message to the US by cutting oil output even more. Dec West Texas Intermediate crude rose $2.99 (4.1%) to settle at $75.89 a barrel after yesterday's 4.9% decline. For the week, prices based on the front-month contract still lost 1.7%.
Oil prices finish sharply higher as OPEC+ reportedly mulls further output cuts
Dow stayed close to breakeven for most of the session. A little selling in the last hour gave it a negative finish. For the week, it gained 650 (shown in the chart below). Oil prices, which have been flattish for a couple of years near 76, will be negatively influenced if production cuts are increased because of the Gaza crisis.Dow Jones Industrials
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