Markets pause while investors digest the recent rally

Dow went up 56 for another record, decliners over advancers better than 2-1 & NAZ gained 52.  The MLP index was off 1 to 251 & the REIT index retreated 6+ to the 391s.  Junk bond funds continued mixed & Treasuries wrapping up a wild week of trading finished flattish today.  Oil slid back pennies in the 71s & gold fell 13 to 2031 in volatile trading (more on both below).

AMJ (Alerian MLP Index tracking fund)

General Motors (GM) will lay off 1314 employees at 2 factories in Michigan in connection with ending production of vehicles.  GM filed a WARN notice that said the Orion Assembly plant's expected layoff date will take place on Janu 1, Lansing Grand River Assembly/Stamping as GM ends production of the Camaro muscle car built there.  The cuts will happen in phases that begin Jan 1 & end in Mar.  Those cuts are related to GM's Oc announcement that it was delaying production of 2 all-electric pickups at the plant by a full year & transferring nearly 1000 workers to other GM facilities in Michigan.  GMs' self-driving vehicle unit, Cruise, announced the layoffs amid an ongoing safety investigation into its robotaxis, impacting nearly 1 in 4 employees.  The announcement came shortly after GM let go of 9 Cruise execs amid the safety probe, including COO Gil West.  This all comes as GM announced Wed that it was making several changes to its product development team & promoting execs to lead the next phase of the company's growth strategy. "We are committed to full transparency and are focused on rebuilding trust and operating with the highest standards when it comes to safety, integrity, and accountability," the memo said.  "As a result, we believe that new leadership is necessary to achieve these goals."  The automaker stated that it would offer employees affected by the cuts jobs elsewhere in the company.  The stock was off 49¢.

General Motors slashing workforce at two Michigan plants

Treasury Secretary Janet Yellen urged China to shift from a state-driven approach in economic policy to healthy competition with the US, saying that their current approach is "unfair."  "The PRC deploys unfair economic practices, from non-market tools, to barriers to access for foreign firms, to coercive actions against American companies," Yellen said, at the US-China Business Council's 50th anniversary dinner in DC.  "These policies harm American workers and firms."  The treasury secretary said that China's state-driven approach can discourage investors, urging the nation to "shift away" from their current economic policy.  "If the PRC were to shift away from its state-driven economic approach in industry and finance, I believe that would be better for the PRC as well," Yellen added.  "Too strong a role for state-owned enterprises can choke growth and an excessive role for the security apparatus can dissuade investment."  Citing a recent US-China Business Council member survey, Yellen noted that firms are reconsidering investment plans & said this should be concerning for the PRC.  "These trends should be concerning to China, and point to the potential benefits to China of pursuing structural reforms and treating foreign firms fairly," Yellen said.  "Beyond attracting more foreign investment, this would help address the inefficiencies and vulnerabilities that have resulted from China’s economic practices, at a critical moment in its economic trajectory."  The treasury secretary also reiterated her previous comments that the world's 2 largest economies would not decouple, calling complete separation from China "damaging."  "I and other U.S. officials have repeatedly stated that the United States does not seek to decouple from China," Yellen said.  "This would be damaging to both our economies and would have negative global repercussions."

Yellen says China's economic practices 'unfair,' encourages healthy competition

Darden (DRI) reported quarterly earnings that beat expectations & raised its annual guidance, helped by sales growth at chains such as Olive Garden & LongHorn Steakhouse.  Sales rose 9.7% from the year-ago period, which the company said was driven by the inclusion of Ruth's Chris Steak House locations and a same-restaurant sales increase of 2.8%.  Olive Garden same-restaurant sales were up 4.1%, while LongHorn Steakhouse saw a 4.9% jump for the qtr.  Fine dining lagged, as sales fell 1.7% for the qtr.  “The consumer appears to be resilient, but more selective,” said CEO Rick Cardenas.  CFO Raj Vennam also noted that DRI expects the inflation environment to improve halfway thru the fiscal year.  But he said restaurant foot traffic is projected to be down for the full year.  “We continued to profitably grow market share again this quarter as we outperformed industry same-restaurant sales and traffic,” said Cardenas.  The restaurant group also updated its fiscal 2024 outlook, forecasting adjusted EPS of $8.75-8.90, up from the company's previous estimate of $8.55-8.85, excluding Ruth's Chris transactions & integration costs. The LongHorn Steakhouse owner also projects $11.5B in sales for the fiscal year, as well as 50-55 new restaurant openings.  The stock fell 68¢.

Olive Garden owner Darden beats earnings estimates, ups guidance as sales climb

Gold trimmed a weekly gain as traders reassessed how aggressive the Federal Reserve's pivot to easing monetary policy next year.  The precious metal slipped by as much as 0.8% as comments from 2 Fed officials diminished hopes for a sharper pace of rate reduction next year.  A faster pace of cuts would be positive for the non-interest bearing metal.  Bullion's upside has been kept for most of the year as the Fed embarked on the most aggressive monetary tightening in decades to contain inflation & cool the labor market.  Earlier this week, Fed officials indicated at their last meeting of the year that they expect to cut rates by 75 basis points next year.  That prompted economists to call for the central bank to ease policy earlier & faster.  Meanwhile, economic data released today showed that US factory production rebounded in Nov, reflecting a pickup in activity at carmarkers & parts suppliers following the end of the United Auto Workers' strike.  Gold slid 0.8% to $2020 an ounce for a 0.8% weekly gain.

Gold Trims Weekly Gain as Market Rethinks Fed Pivot to Easing

West Texas Intermediate (WTI) crude oil closed lower amid volatile trading.  WTI crude for Jan closed down 15¢ to settle at $72.13, after trading between $70.30-72.22.  Feb Brent crude, the global benchmark, was last seen down 8¢ to $76.53.  The drop follows on forecasts for higher 2024 demand from the Energy Information Administration, OPEC & the Intl Energy Agency.  All 3 see demand continuing to rise next year amid continuing OPEC+ supply cuts, putting the focus on non-OPEC supply gains.

WTI Crude Oil Closes With a Loss Amid Volatile Trading

Dow reached another record which makes investors happy.  The challenge is to keep this rally going in the face of headwinds.  This week Dow finished up an impressive 1060 & for the month nearly 1355.

Dow Jones Industrials