Markets gain as investors shake off Trump’s trade battles

Dow went up 97, advancers over decliners 5-2 & NAZ advanced 250.  The MLP index crawled up 1+ to the 234s & the REIT index was steady in the 401s.  Junk bond funds were mixed & Treasuries had limited buying which brought slightly lower yields.  Oil slid back to the 72s & gold was up 7 to 2865.

Dow Jones Industrials

China imposed tariffs on some US imports in response to new tariffs Pres Trump placed on Chinese goods beginning shortly after midnight.  Trump had signed an exec order authorizing a 10% additional tariff on imports from China.  The order also included a 25% additional tariff on imports from Canada & Mexico, & an additional 10% tax on energy imported from Canada, including oil, natural gas & electricity.  The pres has since agreed to a 30-day pause on the tariffs on Mexico & Canada.  The additional 10% tariff on all Chinese imports into the US went into effect today after Trump warned Beijing it was not doing enough to stop fentanyl from being trafficked into the country.  Trump plans to speak to Chinese Pres Xi Jinping as early as today.  China's Finance Ministry said shortly after the tariff started that it would impose a tariff of 15% for coal & liquefied natural gas and 10% for crude oil, agricultural equipment & large-engine cars imported from the US.  China also launched an anti-monopoly investigation into Alphabet's Google (GOOG) & included both PVH Corp, the holding company for Calvin Klein & other brands, US biotechnology company Illumina on its "unreliable entities list."  Additionally, China's Commerce Ministry and its Customs Administration revealed it is imposing export controls on some rare earths & metals that are critical for high-tech gadgets & the clean energy transition.  The new tariffs on US goods will start on Feb 10, according to the ministry.  Trump had warned he might continue to increase tariffs on China unless it blocked the flow of fentanyl into the US.  GOOG stock rose 4.60.

China responds with tariffs on US goods after Trump's tariffs on Chinese imports take effect

New orders for US-manufactured goods dropped in Dec, pulled down by a decline in bookings for civilian aircraft, but demand elsewhere was marginally firm.  Factory orders tumbled 0.9% after a revised 0.8% decline in Nov, the Commerce Dep's Census Bureau said.  The forecast called for factory orders to fall 0.7% after a previously reported 0.4% drop in Nov.  Factory orders were unchanged on a year-on-year basis in Dec.  Manufacturing, which accounts for 10.3% of the economy, has been constrained by the Federal Reserve's aggressive interest rate hikes in 2022 & 2023.  It has shown signs of revival as the central bank started easing monetary policy.  The Institute for Supply Management's manufacturing PMI swung into growth territory in Jan for the first time in more than 2 years.  But that nascent recovery is threatened by additional US tariffs on imported Chinese goods, which come into effect today.  A 25% tariff on most Canadian & Mexican goods has been delayed until next month.  Civilian aircraft orders decreased 45.7% in Dec, contributing to the 7.4% decline in orders for transportation equipment.  Excluding transportation equipment, orders rose 0.3%.  Business spending on equipment contracted in the 4th qtr after double-digit growth in the Jul-Sep qtr, weighed down by aircraft deliveries.

US factory orders decline again in December

Job openings slid in Dec, falling close to 4-year low, while hiring, voluntary quits & layoffs held steady, the Labor Dept reported.  Available positions tumbled to 7.6M, the lowest since Sep, & below the estimate for 8M, the Bureau of Labor Statistics said in its monthly Job Openings & Labor Turnover Survey.  The decline left the ratio of open jobs to available workers at 1.1 to 1.  Though the report runs a month behind other jobs data, the Federal Reserve watches it closely for signs of a slack or tight labor market.  While the net gain in nonfarm payrolls  picked up in the month by 256K, the level of openings fell by 556K.  As a share of the labor force, openings declined to 4.5%, or 0.4 percentage point below Nov.  Professional & business services saw a drop of 225K, while private education & health services declined by 194K & financial activities decreased by 166K.  Major stock market averages rose following the news while Treasury yields were mixed as the report showed a relatively healthy labor market as 2024 came to a close.  Layoffs totaled 1.77M for the month, down just 29K, while hires nudged up to 5.46M & quits also saw a small gain to near 3.2M.  Total separations also moved little, at 5.27M.

Job openings decline sharply in December to 7.6 million, below forecast

Stocks moved higher as investors assessed China's instant retaliation to Pres Trump's additional tariffs amid worries about the risk of a trade war.  Traders also took in fresh jobs data, with job openings declining more than expected in Dec & investors are continuing to watch any signs of cooling in the labor market as the Federal Reserve debates future interest rate cuts in the face of sticky inflation.