Dow sank 268 (session low), decliners over advancers 5-2 & NAZ was off 97. The MLP index fell 1+ to the 199s & the REIT index dropped 6 to the 399s. Junk bond funds did little & Treasuries remained weak, bringing higher yields. Oil shot up to about 56 & gold fell 4 to 1468 (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)
House Speaker Nancy Pelosi said Dems are still hammering out differences with the Trump administration on enforcement mechanisms in the US-Mexico-Canada Agreement. Things have been looking up for the USMCA after Mexico & Canada signaled openness to House Dems' demands over the past week. The 2 countries would have to approve any changes to the trade deal. Passing USMCA is a priority for the Trump administration, which promised to buoy the US economy by improving a variety of intl trade deals, including replacing the North American Free Trade Agreement. Members of the administration accuse Pelosi of slow-walking the deal. Should Pelosi's faction get their addendum, a vote on the entire deal should follow. "As I said earlier, though we are hoping to come near to conclusion on a US-Mexico-Canada trade agreement," Pelosi said. "We still have some issues that relate to enforcement because if you don't have enforcement you just have a nice conversation & a list of nice things, but you do not have a fair deal for workers in any of the countries." "And that's what we want," she continued. "Not just a good deal for American workers but for all workers so that everyone can thrive. That has an impact on our economies on migration and international relations and again puts a better face on globalization which is inevitable, as we know." Mexico ratified the deal in Jun, while Canada appears on track to ratify the deal in its new parliament. Mexico's Undersecretary to North America Jesus Seade met with Canada's Prime Minister Justin Trudeau & Deputy Prime Minister Chrystia Freeland about the deal last week. Seade seemed optimistic & discussed Pelosi's focus on workers' rights for all countries involved. "Many of the issues raised by Democrats are very valid," Seade said. "Good things in terms of what they raised. At the same time after one extra year of reviewing the text, a lot of things are coming out. I think we are going to have instead of a very good agreement, an excellent one."
China's Foreign Ministry announced that it was barring the US Navy from making port calls in Hong Kong & announced unspecified sanctions on pro-democracy groups. Those moves followed Pres Trump's signing last week of legislation supporting human rights in Hong Kong, where often violent prodemocracy protests have persisted for the past 6 months. It's unclear if or how the latest flare up in antagonisms might affect trade talks between Beijing & DC. China's foreign ministry urged Canada to free an executive of telecom equipment giant Huawei Technologies held for more than a year as she awaits an extradition trial. Canada arrested Huawei's CFO, Meng Wanzhou, on Dec1 at Vancouver's airport at the request of the US, which is seeking her extradition on fraud charges. Ministry spokeswoman Hua Chunying said the US & China were abusing their extradition treaty & violating Meng's rights. “We once again strongly urge Canada to take seriously China's solemn stance and concerns, take practical measures to correct its mistakes, release Ms. Meng Wanzhou as soon as possible, and ensure that she returns home safely,” Hua said in a routine briefing. Meng's arrest has further soured relations between Beijing & DC as Pres Trump pressures China on trade & seeks to limit business with Huawei on national security grounds. It also has embroiled Canada in the friction over Huawei: Chinese authorities detained 2 Canadians in an apparent attempt to pressure Canada to release Meng. A daughter of Huawei's founder, Meng is free on bail while staying in 1 of her 2 Vancouver homes, awaiting extradition hearings due to begin on Jan 20.
The US Trade Representative (USTR) is set to announce any proposed response along with its report on France's digital services tax by today. French Finance Minister Bruno Le Maire seemed pessimistic about US response to the tax, which affects US companies. "Having demanded an international solution from the [Organization for Economic Co-operation and Development], it [Washington] now isn't sure it wants one," Le Maire said. "We can see that the United States is shifting into reverse," La Maire said. He added that Pres Trump "is going to content himself with imposing sanctions against France over its national tax." In Mar, France introduced the 3% tax on companies with more than $834M in revenue globally & more than $27M in revenue in France made thru certain digital services. US tech giants such as Google (GOOG), Apple (AAPL), Facebook (FB) & Amazon (AMZN) said the French tax, known as GAFA, an acronym representing all 4 companies, unfairly targets them. The White House said that "France's unilateral measure appears to target innovative U.S. technology firms that provide services in distinct sectors of the economy." The purpose of the tax is to remove the loophole that allows M & B$ companies to avoid paying high taxes. "Digital giants pay 14 percentage points less tax than European [small- and medium-sized enterprises]. The fact that these companies pay less tax than a cheese producer in Quercy is a real problem," France Economy Minister Bruno Le Maire said in an Apr 3 interview in the Le Parisien. The US & Paris compromised on the tax in late Aug after Trump threatened to impose tariffs on French wine if the deal fell thru. US Trade Representative Robert Lighthizer said the purpose of the investigation is to "determine whether [the tax] is discriminatory or unreasonable and burdens or restricts United States commerce."
Oil prices jumped, lifted by the prospect of longer production cuts by OPEC & its allies as well as evidence of improving economic conditions in China. Brent crude rose 1.7% to $61.49 & West Texas Intermediate futures rose 1.9% to $56.19, both partially recovering from steep declines that took place in thin holiday trading on Fri. The advance came after a report that Saudi Arabia will push for OPEC & its partners to extend restrictions on oil output thru mid-2020. The cartel & its Russia-led allies are set to meet in Vienna on Dec 5-6 & will debate whether to prolong their agreement to reduce output by 1.2M barrels a day. The pact is due to expire in Mar, but Persian Gulf officials said Saudi Arabia is seeking to push back this date to prop up the share price of Saudi Aramco in its IPO. The state-run oil company is expected to publish its IPO pricing on Thurs. A key question for the oil market is whether Russia will commit to extend the reductions at this week's meeting or seek to delay the decision until next year. The rise in oil prices came alongside a broad advance in stocks & other assets that are sensitive to the world economy after 2 indicators suggested Chinese factory output rose in Nov. The private Caixin manufacturing purchasing managers index rose to 51.8 from 51.7 in Oct, Caixin Media & IHS Markit said, while China's official manufacturing PMI rose to 50.2 from 49.3. A reading above 50 suggests activity is expanding. China is the world's largest consumer of industrial commodities, & rising demand for oil there has supported crude prices in recent weeks. The country's oil demand increased by 640K barrels a day compared with the year before in the 3rd qtr, the Intl Energy Agency (IEA) said in mid-Nov. For 2019 as a whole, the IEA expects China to consume 13.6M barrels on average each day, a record high.
A private survey today showed China's manufacturing activity expanded more than expected in Nov as the Caixin/Markit manufacturing Purchasing Managers' Index (PMI) came in at 51.8. Caixin & IHS Markit said that the pace of improvement was the strongest since Dec 2016. The index was expected to have fallen to 51.4 in Nov from 51,7 in Oct. PMI readings above 50 indicate expansion, while those below that level signal contraction. Caixin & IHS Markit said the PMI data signaled a “further modest improvement” in the health of China’s manufacturing sector attributed to “solid increases” in output & new business. Employment in the sector also remained broadly stable, they added. China's official PMI was 50.2 in Nov, up from 49.3 in Oct to hit its highest level since Mar, China's National Bureau of Statistics said. The official PMI survey typically polls a large proportion of big businesses & state-owned enterprises. The Caixin indicator features a bigger mix of small & medium sized firms. The data come as US & China remained locked in a long-drawn trade dispute that has weighed on sentiment.
Survey shows China’s manufacturing activity expanded more than expected in November
Gold fell, pressured by a round of upbeat data on Chinese manufacturing activity, but prices finished above the session's worst levels as weakness in the US manufacturing index dulled appetite for stocks. Gold for Feb delivery fell $3.50 (0.2%) to settle at $1469 an ounce after tapping lows under $1460. The Caixin manufacturing purchasing managers index rosen 51.8 in Nov from 51.7 in Oct, said Caixin Media & research firm Markit, with the reading still above the 50 level that separates expansion from contraction. Earlier, China's official manufacturing PMI reading moved back into expansion activity, rising to 50.2 in Nov from 49.3, according to the country's National Bureau of Statistics, marking the first reading above 50 for the index since Apr. However, in the US, the Institute for Supply Management said that its manufacturing index sank to 48.1% in Nov from 48.3% in Oct. The forecast called for the index to reach 49.2%.
Gold settles off session lows after data show weakness in U.S. manufacturing
Traders started the new month by selling stocks after plenty of negative intl trade stories. Trade tensions have increased & macro economic data has been disappointing. Last Dec was a brutal month for the stock market & investors hope this year will be a better time for stocks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
House Speaker Nancy Pelosi said Dems are still hammering out differences with the Trump administration on enforcement mechanisms in the US-Mexico-Canada Agreement. Things have been looking up for the USMCA after Mexico & Canada signaled openness to House Dems' demands over the past week. The 2 countries would have to approve any changes to the trade deal. Passing USMCA is a priority for the Trump administration, which promised to buoy the US economy by improving a variety of intl trade deals, including replacing the North American Free Trade Agreement. Members of the administration accuse Pelosi of slow-walking the deal. Should Pelosi's faction get their addendum, a vote on the entire deal should follow. "As I said earlier, though we are hoping to come near to conclusion on a US-Mexico-Canada trade agreement," Pelosi said. "We still have some issues that relate to enforcement because if you don't have enforcement you just have a nice conversation & a list of nice things, but you do not have a fair deal for workers in any of the countries." "And that's what we want," she continued. "Not just a good deal for American workers but for all workers so that everyone can thrive. That has an impact on our economies on migration and international relations and again puts a better face on globalization which is inevitable, as we know." Mexico ratified the deal in Jun, while Canada appears on track to ratify the deal in its new parliament. Mexico's Undersecretary to North America Jesus Seade met with Canada's Prime Minister Justin Trudeau & Deputy Prime Minister Chrystia Freeland about the deal last week. Seade seemed optimistic & discussed Pelosi's focus on workers' rights for all countries involved. "Many of the issues raised by Democrats are very valid," Seade said. "Good things in terms of what they raised. At the same time after one extra year of reviewing the text, a lot of things are coming out. I think we are going to have instead of a very good agreement, an excellent one."
Pelosi explains delaying Trump's signature trade deal
China's Foreign Ministry announced that it was barring the US Navy from making port calls in Hong Kong & announced unspecified sanctions on pro-democracy groups. Those moves followed Pres Trump's signing last week of legislation supporting human rights in Hong Kong, where often violent prodemocracy protests have persisted for the past 6 months. It's unclear if or how the latest flare up in antagonisms might affect trade talks between Beijing & DC. China's foreign ministry urged Canada to free an executive of telecom equipment giant Huawei Technologies held for more than a year as she awaits an extradition trial. Canada arrested Huawei's CFO, Meng Wanzhou, on Dec1 at Vancouver's airport at the request of the US, which is seeking her extradition on fraud charges. Ministry spokeswoman Hua Chunying said the US & China were abusing their extradition treaty & violating Meng's rights. “We once again strongly urge Canada to take seriously China's solemn stance and concerns, take practical measures to correct its mistakes, release Ms. Meng Wanzhou as soon as possible, and ensure that she returns home safely,” Hua said in a routine briefing. Meng's arrest has further soured relations between Beijing & DC as Pres Trump pressures China on trade & seeks to limit business with Huawei on national security grounds. It also has embroiled Canada in the friction over Huawei: Chinese authorities detained 2 Canadians in an apparent attempt to pressure Canada to release Meng. A daughter of Huawei's founder, Meng is free on bail while staying in 1 of her 2 Vancouver homes, awaiting extradition hearings due to begin on Jan 20.
China retaliates against US Navy after Trump signs human rights bill
The US Trade Representative (USTR) is set to announce any proposed response along with its report on France's digital services tax by today. French Finance Minister Bruno Le Maire seemed pessimistic about US response to the tax, which affects US companies. "Having demanded an international solution from the [Organization for Economic Co-operation and Development], it [Washington] now isn't sure it wants one," Le Maire said. "We can see that the United States is shifting into reverse," La Maire said. He added that Pres Trump "is going to content himself with imposing sanctions against France over its national tax." In Mar, France introduced the 3% tax on companies with more than $834M in revenue globally & more than $27M in revenue in France made thru certain digital services. US tech giants such as Google (GOOG), Apple (AAPL), Facebook (FB) & Amazon (AMZN) said the French tax, known as GAFA, an acronym representing all 4 companies, unfairly targets them. The White House said that "France's unilateral measure appears to target innovative U.S. technology firms that provide services in distinct sectors of the economy." The purpose of the tax is to remove the loophole that allows M & B$ companies to avoid paying high taxes. "Digital giants pay 14 percentage points less tax than European [small- and medium-sized enterprises]. The fact that these companies pay less tax than a cheese producer in Quercy is a real problem," France Economy Minister Bruno Le Maire said in an Apr 3 interview in the Le Parisien. The US & Paris compromised on the tax in late Aug after Trump threatened to impose tariffs on French wine if the deal fell thru. US Trade Representative Robert Lighthizer said the purpose of the investigation is to "determine whether [the tax] is discriminatory or unreasonable and burdens or restricts United States commerce."
US trade officials to make big announcement on France's digital tax
Oil prices jumped, lifted by the prospect of longer production cuts by OPEC & its allies as well as evidence of improving economic conditions in China. Brent crude rose 1.7% to $61.49 & West Texas Intermediate futures rose 1.9% to $56.19, both partially recovering from steep declines that took place in thin holiday trading on Fri. The advance came after a report that Saudi Arabia will push for OPEC & its partners to extend restrictions on oil output thru mid-2020. The cartel & its Russia-led allies are set to meet in Vienna on Dec 5-6 & will debate whether to prolong their agreement to reduce output by 1.2M barrels a day. The pact is due to expire in Mar, but Persian Gulf officials said Saudi Arabia is seeking to push back this date to prop up the share price of Saudi Aramco in its IPO. The state-run oil company is expected to publish its IPO pricing on Thurs. A key question for the oil market is whether Russia will commit to extend the reductions at this week's meeting or seek to delay the decision until next year. The rise in oil prices came alongside a broad advance in stocks & other assets that are sensitive to the world economy after 2 indicators suggested Chinese factory output rose in Nov. The private Caixin manufacturing purchasing managers index rose to 51.8 from 51.7 in Oct, Caixin Media & IHS Markit said, while China's official manufacturing PMI rose to 50.2 from 49.3. A reading above 50 suggests activity is expanding. China is the world's largest consumer of industrial commodities, & rising demand for oil there has supported crude prices in recent weeks. The country's oil demand increased by 640K barrels a day compared with the year before in the 3rd qtr, the Intl Energy Agency (IEA) said in mid-Nov. For 2019 as a whole, the IEA expects China to consume 13.6M barrels on average each day, a record high.
Oil prices jump on OPEC production cut rumors
A private survey today showed China's manufacturing activity expanded more than expected in Nov as the Caixin/Markit manufacturing Purchasing Managers' Index (PMI) came in at 51.8. Caixin & IHS Markit said that the pace of improvement was the strongest since Dec 2016. The index was expected to have fallen to 51.4 in Nov from 51,7 in Oct. PMI readings above 50 indicate expansion, while those below that level signal contraction. Caixin & IHS Markit said the PMI data signaled a “further modest improvement” in the health of China’s manufacturing sector attributed to “solid increases” in output & new business. Employment in the sector also remained broadly stable, they added. China's official PMI was 50.2 in Nov, up from 49.3 in Oct to hit its highest level since Mar, China's National Bureau of Statistics said. The official PMI survey typically polls a large proportion of big businesses & state-owned enterprises. The Caixin indicator features a bigger mix of small & medium sized firms. The data come as US & China remained locked in a long-drawn trade dispute that has weighed on sentiment.
Survey shows China’s manufacturing activity expanded more than expected in November
Gold fell, pressured by a round of upbeat data on Chinese manufacturing activity, but prices finished above the session's worst levels as weakness in the US manufacturing index dulled appetite for stocks. Gold for Feb delivery fell $3.50 (0.2%) to settle at $1469 an ounce after tapping lows under $1460. The Caixin manufacturing purchasing managers index rosen 51.8 in Nov from 51.7 in Oct, said Caixin Media & research firm Markit, with the reading still above the 50 level that separates expansion from contraction. Earlier, China's official manufacturing PMI reading moved back into expansion activity, rising to 50.2 in Nov from 49.3, according to the country's National Bureau of Statistics, marking the first reading above 50 for the index since Apr. However, in the US, the Institute for Supply Management said that its manufacturing index sank to 48.1% in Nov from 48.3% in Oct. The forecast called for the index to reach 49.2%.
Gold settles off session lows after data show weakness in U.S. manufacturing
Traders started the new month by selling stocks after plenty of negative intl trade stories. Trade tensions have increased & macro economic data has been disappointing. Last Dec was a brutal month for the stock market & investors hope this year will be a better time for stocks.
Dow Jones Industrials
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