Dow went up 65, advancers over decliners 4-3 & NAZ gained 150. The MLP index declined 1+ to 300 & the REIT index added 2 to 419. Junk bond funds fluctuated & Treasuries had very limited buying, allowing yields to ease lower (more below). Oil slid back pennies in the low 71s & gold was off 1 to 2674.
Dow Jones Industrials
Americans say they are ready to support Pres-elect Trump in his 2nd term & majorities give a green light to some of his controversial promises on the campaign trial. Yet the CNBC All-America Economic Survey also finds the public is flashing yellow & red warning lights on some parts of the Trump agenda. Overall, the survey finds that 54% of the public are “comfortable and prepared to support” Trump as pres. That's down 2 points from when he took office in 2016. Some 41% are not comfortable, up 5 points from 2016. Despite having won the popular vote in this election compared to 2016, Trump takes office for the 2nd time with somewhat less net support in the poll. “In 2016, there were a few more people, who said, ‘I’m not sure,’ and took a kind of a wait-and-see approach,” said Jay Campbell, partner at Hart Research, the Dem pollster for the survey. “Those numbers have dropped by half or more ... People know what to expect with Donald Trump now.” The survey of 1000 people nationwide was taken Dec 5-8 with a margin of error of +/- 3.1%. The survey finds 60% say deploying the military to the border to stop illegal drugs & human trafficking should be a 2025 priority for the new administration with an additional 13% saying it should still be done but later in the term. The proposal is only opposed outright by 24%, including 51% of Dems, 12% of independents & 3% of Reps. Majorities of Americans also support cutting individual taxes, increasing deportation of undocumented immigrants, reducing the size of gov, drilling for more oil on federal lands & cutting taxes & regulation for business. Where the potential agenda gets more contentious is most obviously in Pres-elect Trump's plans to pardon those convicted of crimes from the Jan 6 protest. Just 43% support the move, with 50% opposing it, including 87% of Dems, 46% of independents & 18% of Reps. It's the issue with the single largest Rep opposition. Support for tariffs is also more lukewarm with 27% backing them outright & 24% saying it can be done later in the term. It's opposed by 42% of respondents. Americans overall are more upbeat about the economic outlook for the 2nd Trump presidency than they were the first. More than ½ (51%) say they expect their personal financial situation to improve, 10 points higher than when he was elected in 2016; the same percentage, 51%, also say they expect the US economy to improve, up 5 points from 2016.
Majority of Americans are ready to support Trump and large parts of his agenda, says CNBC survey
China’s retail sales disappointed in Nov as sentiment in the real estate market weakened further, in another sign that Beijing's efforts to boost the economy have failed to revive sluggish demand. Retail sales rose by 3% in Nov from a year ago, according to National Bureau of Statistics data, missing the forecast of 4.6%. That marked a sharp slowdown from 4.8% growth in the previous month. Retail sales in Oct had recorded the quickest growth since Feb, helped by the annual Singles' Day shopping festival that kicked off more than a week earlier than the event in 2023. The slump in real estate investment for the Jan - Nov period deepened, shrinking by 10.4% from a year ago, following a 10.3% decline reported in the Jan - Oct period. The world's 2nd-largest economy has been contending with pressure from multiple fronts this year. Consumer & business confidence has been hit by a prolonged property downturn, local gov debt risks & high unemployment. “The stimulus effect has been short-lived,” My Bui, economist at investment management firm AMP said. While the “recent fragile but upward momentum in Chinese economic data will translate into a real GDP growth rate of 5% this year,” they are unlikely to turn around weak consumption sentiment due to falling home prices, Bui added. Nov industrial production rose by 5.4% from a year ago, above the expectations of 5.3% growth among economists, accelerating from a climb of 5.3% in the prior month. Fixed asset investment, reported on a year-to-date basis, rose by 3.3% this year thru Nov on an annual basis, missing the forecast of 3.4%. The figure had risen by 3.4% in the period from Jan - Oct. “Signs of improvement in the economy have accumulated in November thanks to the stimulus policies,” the National statistics bureau said, adding that “domestic demand has remained insufficient and businesses are confronted with operating difficulties.” A few days after the broader jobless rate release, Chinese authorities typically publish a separate set of unemployment rate for 16-24 year olds which excludes students. The youth jobless rate has remained elevated, coming in at 17.1% in Oct & 17.6% in Sep a notch above the record high of 18.8% in Aug.
China’s November retail sales miss expectations as real estate slump deepens
Treasury yields were little changed as investors looked ahead to the Federal Reserve's final meeting of the year this week. The 10-year Treasury yield was down 2.6 basis points at 4.375% after topping 4.4% on Fri & the 2-year Treasury yield was down 1.5 basis points at 4.226%. One basis point equals 0.01%. Yields & prices move in opposite directions. The Federal Open Market Committee's meeting on Tues & Wed is front & center for investors who are keenly awaiting the final US interest rate decision of the year. Currently, investors were pricing in a 97% chance of a 25-basis-point interest rate cut. Markets will focus on the Fed's updated policy statement & will follow Fed Chair Jerome Powell's press conference on Wed for hints about future interest rate decisions. The S&P Global Composite PMI flash, which measures US business activity across the manufacturing & services sector, is due to be released today. A reading above 50 indicates expansion, while a number below that threshold signals a contraction. Other economic data is also set to be published throughout the week, including retail sales for Nov tomorrow, as well as weekly initial jobless claims & the GDP growth rate for the 3rd qtr on Thurs.
Treasury yields are little changed as investors prepare for potential rate cut
Stocks crept higher today after bitcoin rose to a fresh record, as investors geared up for the Federal Reserve's final policy decision of the year later in the week. Markets are taking their foot off the gas as the final Federal Reserve meeting of the year approaches. The interest-rate decision on Wed is already in high focus as investors watch for a catalyst to revive this year's stellar stock rally. Investors see a final 2024 rate cut as a sure thing, with 97% of traders currently pricing in a 25 basis point move.
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