Dow dropped 109, decliners over advancers 4-3 & NAZ sank 77. The MLP index fell 2+ to 251 & the REIT index added 1+ to the 343s. Junk bond funds did little & Treasuries were sold, taking the yield on the 10 year Treasury up 7 basis points to 3.21%. Oil dropped to 63 (more below) & gold pulled back 4 to 1234.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
For a brief moment today, there was optimism in the market that the Trump administration was getting closer to a trade deal with China. But administration officials are saying that there is no indication of an imminent agreement. Today, a report said Pres Trump had asked US officials to prepare a draft trade agreement with China sent the market higher. Then, after it became clear that the reported progress might not materialize, the Dow went negative. 3 senior administration officials said that there is no indication of an imminent trade deal, despite some progress being made behind the scenes. Later, Trump's top economic advisor Larry Kudlow said that Trump had not asked his Cabinet to put together a draft trade deal. Another senior official said that the pres is preparing to meet with Chinese Pres Xi Jinping at the upcoming G-20 summit in Argentina – & that includes discussing the potential terms of a deal. But that official cautioned against reading too much into the preparations, noting that there is a standing weekly interagency meeting on trade at the White House to discuss specific policies. Some investors have stressed the need for caution, noting that the administration's boasts of trade progress are coming just days before the midterm elections. For his part, the pres has made a rhetorical turnaround regarding the trade talks. A week ago, Trump told a crowd at the White House that he had a message for Xi. "They want to make a deal so badly. And I said, 'You're not ready yet. No, you're not ready. No.'" Trump said he told Xi. "I told him, 'You're not ready.'" China has blamed the US for escalating trade tensions. But just a few days before Election Day, the pres changed his tune — & it seemed to buoy the stock market right on schedule. Just a day after Kudlow said that the administration has not engaged the Chinese in "intense talks lately," Trump said Thurs that trade discussions "are moving along nicely." Investors hopeful for a trade deal are skeptical about the recent change in rhetoric, suggesting it could be heavy on politics & short on policy. For months, administration officials have said that talks with China were stalling. The pres has maintained the country is not ready to come to the table. Just over 2 weeks ago, Commerce Secretary Wilbur Ross said that talks were on "hiatis." Ross also cast doubt on the idea that a deal could be advanced during talks at the G-20 summit this month. "You can't do a multi-thousand-page trade agreement in an hour," he said at the time.
Not so fast: White House officials push back on the idea that a China trade deal is imminent
Shares of Exxon Mobil (XOM). a Dow stock & Dividend Aristocrat, surrendered early gains after the oil major beat expectations for quarterly profit & revenue, but reported another drop in total oil & gas production. Quarterly EPS surged to $1.46, above the compared $1.23 forecast. Revenue also beat expectations, coming in at $76.6B, versus the estimate for $73.B. The latest report reversed a series of earnings disappointments. Prior to this qtr, profits fell short of expectations in 4 of the last 5 qtrs. Global crude oil production roughly matched its output in the year ago period. However, the company's natural gas output slipped 6.1% from a year ago to 9B cubic feet per day. Despite churning out fewer hydrocarbons, earnings in the upstream exploration & production segment more than doubled to $4.23B from a year ago. Growing output from US oil fields, higher crude prices & one-time tax impacts offset the slump in natural gas output. Liquids production from the Permian basin, America's top oil-producing region, increased 57% over the last year. The company said in Jul it is scaling back natural gas output in the region & concentrating on pumping higher-value crude oil. "We're pleased with the increase in production from the second quarter of 2018 recognizing it reflects contributions from just one of our key growth areas, the Permian," CEO Darren W. Woods said. "We expect to continue to increase volumes over time as we ramp up activity in the Permian and new projects start up." Profits in refining & marketing operations improved after a rough Q2. Earnings of $1.64B more than doubled last qtr's profits & improved slightly upon year-ago levels. The company also reported heavier-than-expected maintenance at oil refineries in several countries & operational issues that weighed on profits last qtr. Execs warned investors to expect more work on those refineries in the coming qtrs as XOM retools the facilities to process low-sulfur fuels that will help the shipping industry meet stricter maritime emissions rules. The company continued to see high downtime in its intl refining segment in Q3, contributing to a 40% drop on overseas earnings for the business. Cash flow from operations, a key measure of financial health for oil companies, came in at $11.1B, the best reading in 4 years. The stock rose 1.28.
If you would like to learn more about XOM, click on this link:
club.ino.com/trend/analysis/stock/XOM?a_aid=CD3289&a_bid=6ae5b6f7
Exxon Mobil shares gain after quarterly profits beat Wall Street's expectations
Chevron (CVX), a Dow stock & Dividend Aristocrat, reported quarterly earnings that beat expectations, as record-setting oil & gas production boosted its bottom line. EPS rose to $2.11, slightly beating expectations for $2.06. "Our strong financial results reflect higher production and crude oil prices coupled with a continued focus on efficiency and productivity," CEO Michael Wirth said. The company pumped nearly 3M barrels per day of oil equivalent, the most it's ever produced in a single qtr. The gains came as CVX ramped up production from its Wheatstone liquefied natural gas project in Australia & as output continued to surge from its wells in the Permian Basin underlying Texas & New Mexico. That helped drive a nearly 7-fold jump from Q3-2017 earnings in its oil & gas exploration & production business, where profits hit $3.38B. The other major business line, refining & marketing fuels like gasoline & diesel, saw profits drop 24%. The decline was largely due to the intl refining business, where profit margins were lower & the company sold fewer assets compared with a year ago. Weak profit margins in the overseas refining business also weighed on the bottom line, though earnings improved. Profits were also bolstered by $930M worth of financial items including a write-off, an asset impairment & a contractual settlement, as well as its $350M sale of African refining, marketing & lubricant assets. Revenue increased 21% from a year ago to $44B, but still came in light of estimates for $46.7B. The stock advanced 3.54.
If you would like to learn more about CVX, click on this link:
club.ino.com/trend/analysis/stock/CVX?a_aid=CD3289&a_bid=6ae5b6f7
Chevron shares jump 2% as quarterly profit doubles, oil and gas output hits record
US crude drops 6.6% this week, settling at $63.14, as fear of oil shortage fades
Not a lot of excitement going into the weekend. Thoughts about the elections were getting more attention. The Dow & NAZ each has a modest gain in the new month. That includes a 14 point drop for Apple (AAPL) which is in both indices. More excitement for stocks is coming next week.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The head of the Council of Economic Advisers, a White House agency, said the employment report on the number of jobs created last month is “astonishing.” The
Labor Dept said US employers created 250K jobs in Oct,
far more than the 190K that had expected. In addition,
unemployment held steady at 3.7% & the labor force
participation rate increased to 62.9% from 62.7% during
the month. Kevin Hassett, who chairs the
council, said one of the reasons the Oct numbers are so amazing is
that they come after 2 hurricanes slammed into the US, one
in late Sep & the other in Oct. “We did this estimate of what the hurricane effect was going to be
because the hurricane came during the survey week,” Hassett said. “We thought it was going to subtract about
60,000 jobs from this [month’s report]. So we were prepared for the
worst, and this is just an astonishing number given all of the actual
literal headwinds.” Hassett said there were 190K households that
reported they didn't go to work for a week because of weather &
that's “one of the highest [numbers] we’ve seen on record.” He also said the job creation was broad-based. “We had lots of job growth in all the industries. In fact, there wasn’t a single industry in the data that went down,” he added.
October job creation numbers are 'astonishing': CEA's Hassett
For a brief moment today, there was optimism in the market that the Trump administration was getting closer to a trade deal with China. But administration officials are saying that there is no indication of an imminent agreement. Today, a report said Pres Trump had asked US officials to prepare a draft trade agreement with China sent the market higher. Then, after it became clear that the reported progress might not materialize, the Dow went negative. 3 senior administration officials said that there is no indication of an imminent trade deal, despite some progress being made behind the scenes. Later, Trump's top economic advisor Larry Kudlow said that Trump had not asked his Cabinet to put together a draft trade deal. Another senior official said that the pres is preparing to meet with Chinese Pres Xi Jinping at the upcoming G-20 summit in Argentina – & that includes discussing the potential terms of a deal. But that official cautioned against reading too much into the preparations, noting that there is a standing weekly interagency meeting on trade at the White House to discuss specific policies. Some investors have stressed the need for caution, noting that the administration's boasts of trade progress are coming just days before the midterm elections. For his part, the pres has made a rhetorical turnaround regarding the trade talks. A week ago, Trump told a crowd at the White House that he had a message for Xi. "They want to make a deal so badly. And I said, 'You're not ready yet. No, you're not ready. No.'" Trump said he told Xi. "I told him, 'You're not ready.'" China has blamed the US for escalating trade tensions. But just a few days before Election Day, the pres changed his tune — & it seemed to buoy the stock market right on schedule. Just a day after Kudlow said that the administration has not engaged the Chinese in "intense talks lately," Trump said Thurs that trade discussions "are moving along nicely." Investors hopeful for a trade deal are skeptical about the recent change in rhetoric, suggesting it could be heavy on politics & short on policy. For months, administration officials have said that talks with China were stalling. The pres has maintained the country is not ready to come to the table. Just over 2 weeks ago, Commerce Secretary Wilbur Ross said that talks were on "hiatis." Ross also cast doubt on the idea that a deal could be advanced during talks at the G-20 summit this month. "You can't do a multi-thousand-page trade agreement in an hour," he said at the time.
Not so fast: White House officials push back on the idea that a China trade deal is imminent
Shares of Exxon Mobil (XOM). a Dow stock & Dividend Aristocrat, surrendered early gains after the oil major beat expectations for quarterly profit & revenue, but reported another drop in total oil & gas production. Quarterly EPS surged to $1.46, above the compared $1.23 forecast. Revenue also beat expectations, coming in at $76.6B, versus the estimate for $73.B. The latest report reversed a series of earnings disappointments. Prior to this qtr, profits fell short of expectations in 4 of the last 5 qtrs. Global crude oil production roughly matched its output in the year ago period. However, the company's natural gas output slipped 6.1% from a year ago to 9B cubic feet per day. Despite churning out fewer hydrocarbons, earnings in the upstream exploration & production segment more than doubled to $4.23B from a year ago. Growing output from US oil fields, higher crude prices & one-time tax impacts offset the slump in natural gas output. Liquids production from the Permian basin, America's top oil-producing region, increased 57% over the last year. The company said in Jul it is scaling back natural gas output in the region & concentrating on pumping higher-value crude oil. "We're pleased with the increase in production from the second quarter of 2018 recognizing it reflects contributions from just one of our key growth areas, the Permian," CEO Darren W. Woods said. "We expect to continue to increase volumes over time as we ramp up activity in the Permian and new projects start up." Profits in refining & marketing operations improved after a rough Q2. Earnings of $1.64B more than doubled last qtr's profits & improved slightly upon year-ago levels. The company also reported heavier-than-expected maintenance at oil refineries in several countries & operational issues that weighed on profits last qtr. Execs warned investors to expect more work on those refineries in the coming qtrs as XOM retools the facilities to process low-sulfur fuels that will help the shipping industry meet stricter maritime emissions rules. The company continued to see high downtime in its intl refining segment in Q3, contributing to a 40% drop on overseas earnings for the business. Cash flow from operations, a key measure of financial health for oil companies, came in at $11.1B, the best reading in 4 years. The stock rose 1.28.
If you would like to learn more about XOM, click on this link:
club.ino.com/trend/analysis/stock/XOM?a_aid=CD3289&a_bid=6ae5b6f7
Exxon Mobil shares gain after quarterly profits beat Wall Street's expectations
Chevron (CVX), a Dow stock & Dividend Aristocrat, reported quarterly earnings that beat expectations, as record-setting oil & gas production boosted its bottom line. EPS rose to $2.11, slightly beating expectations for $2.06. "Our strong financial results reflect higher production and crude oil prices coupled with a continued focus on efficiency and productivity," CEO Michael Wirth said. The company pumped nearly 3M barrels per day of oil equivalent, the most it's ever produced in a single qtr. The gains came as CVX ramped up production from its Wheatstone liquefied natural gas project in Australia & as output continued to surge from its wells in the Permian Basin underlying Texas & New Mexico. That helped drive a nearly 7-fold jump from Q3-2017 earnings in its oil & gas exploration & production business, where profits hit $3.38B. The other major business line, refining & marketing fuels like gasoline & diesel, saw profits drop 24%. The decline was largely due to the intl refining business, where profit margins were lower & the company sold fewer assets compared with a year ago. Weak profit margins in the overseas refining business also weighed on the bottom line, though earnings improved. Profits were also bolstered by $930M worth of financial items including a write-off, an asset impairment & a contractual settlement, as well as its $350M sale of African refining, marketing & lubricant assets. Revenue increased 21% from a year ago to $44B, but still came in light of estimates for $46.7B. The stock advanced 3.54.
If you would like to learn more about CVX, click on this link:
club.ino.com/trend/analysis/stock/CVX?a_aid=CD3289&a_bid=6ae5b6f7
Chevron shares jump 2% as quarterly profit doubles, oil and gas output hits record
Oil prices fell, posting a 4th
consecutive weekly loss, as investors worried about oversupply after the
US said it will temporarily spare 8 jurisdictions from Iran-related sanctions. Secretary of State Mike Pompeo
announced the decision in a conference call. The waivers could allow top
buyers to keep importing Iranian oil after economic penalties come back
into effect on Mon. US light crude ended the session down 55¢ at $63.14, falling 6.6% this week. Brent crude oil was up 2¢ a barrel at $72.91. The contract has
fallen 6% this week & 16% since the beginning of
Oct, when it reached its highest since 2014. Pompeo did not name the jurisdictions, but said the EU as a whole, which has 28 members, would not receive one. Crude drew some support as world equity markets rallied on
hopes the US & China were mending trade relations. Worries
about a US-China trade war had rattled stock markets, weighing on oil
prices. Prices have also been
under pressure as world oil production has been rising significantly in
the past 2 months. Russian Energy Ministry data showed that
the country pumped 11.4M bpd of crude in Oct, a 30-year
high. OPEC boosted oil
production in Oct to 33.3M bpd, up 390K bpd & the
highest by OPEC since 2016. The US is
challenging Russia for title of top producer, with US crude production
now above 11M bpd.
US crude drops 6.6% this week, settling at $63.14, as fear of oil shortage fades
Not a lot of excitement going into the weekend. Thoughts about the elections were getting more attention. The Dow & NAZ each has a modest gain in the new month. That includes a 14 point drop for Apple (AAPL) which is in both indices. More excitement for stocks is coming next week.
Dow Jones Industrials
