Dow rose 100 (session low & off early highs), advancers over decliners better than 2-1 & NAZ went up 79. The MLP index gained 3+ to the 212s & the REIT index recovered 3+ to the 395s. Junk bond funds went up in price & Treasuries were sold. Oil continued higher & gold was steady at 1480 (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)
US trade officials have their eye on making a deal with the UK after Brexiteer Boris Johnson's party won a majority in a snap election last week, National Economic Council Director Larry Kudlow said. "We look forward to a trade deal with Prime Minister Boris Johnson. We'll probably get started on that very soon," Kudlow told reporters. "I believe [Deputy National Security adviser] Matt Pottinger and I are going over there in early January to talk about a lot of things including trade." "No specifics on that, but I'd say ASAP," Kudlow added. Back in Sep, Pres Trump expressed support for Johnson's efforts to yank the UK from the EU by the end of next month on the premise that it will boost trade relations between the pair of countries. Trump has promised to strike a “very big” post-Brexit trade deal with Britain, indicating that its involvement in the EU had been weighing it down. Johnson is set to begin " before Chistman" the push to secure Parliamentary approval for his Brexit deal. Buoyed by its landslide victory in last week's election, Johnson's Conservative gov plans to move fast to make good on his campaign mantra to "get Brexit done." That means ensuring legislation known as the Brexit withdrawal agreement bill is passed in time for the UK to complete its historic departure from the EU by the current deadline of Jan 31. Kudlow's remarks today come just after the US nailed down a "phase one" trade deal with China & appears poised to pass the US-Mexico-Canada Agreement once & for all, although Mexico's trade negotiator for North America has taken issue with one big aspect of the pact dealing with investigating Mexican factories. "We will work with Mexico and Canada with workers' rights," Kudlow said. "I don't think that'll be difficult and won't stop passage of USMCA."
Gold prices settled modestly lower, weighed down by strength in US bond yields but with losses capped by weakness in the $, as investors assessed a phase one trade deal between the US & China. Gold for Feb delivery fell by 70¢ at $1480 an ounce after trading between a low of $1477 & a high of $1484. Pres Trump & Chinese officials on Fri announced an agreement on a preliminary US-China trade pact. Gold gained ground in Fri's session, however, boosted by a weaker $ & a fall in Treasury yields. A weaker $ makes commodities priced in the currency to cheaper to users of other currencies, while lower yields decrease the opportunity cost of holding nonyielding assets.
The NY Fed's Empire State business conditions index showed subdued conditions for manufacturing in the state for the 7th straight month. The index inched up 0.6 point to 3.5 in Dec, the regional Fed bank said. The forecast called for a reading of 4.0. Any reading above zero indicates improving conditions. The new-orders index fell 2.9 points to 2.6 in Dec while shipments rose 3.1 points to 11.9. Unfilled orders continued to decline. If there was a silver lining in the data, optimism about the 6-month outlook did improve. Future capital spending plans were also stronger. In a separate reading, Markit said its preliminary flash manufacturing purchasing index slipped to 52.5 in Dec from 52.6 in the prior month. The headline index has been stuck in a range between 2 & 5 since Jul, as manufacturing has been hit hard by weak business spending & a slowdown of intl trade. Economists see signs that the sector is stabilizing. Investors look at the data mainly to get a sense of the national ISM index, which has been contracting for 4 straight months. The Dec ISM data won't come out until early next year.
Empire State index shows manufacturing remains subdued in December
Oil futures climbed to settle at a 3-month high for a 2nd consecutive session, lifted by a phase-one US-China trade deal that has de-escalated tensions between the worlds 2-large economies. West Texas Intermediate crude for Jan delivery rose by 14¢ to settle at $60.21 a barrel, while Feb Brent crude gained 12¢ to end at $65.34 a barrel. Both grades of crude ended at their highest levels since Sep 16, for a 2nd session in a row. China’s industrial production & consumption expanded at a faster-than-expected pace in Nov, according to data from the National Bureau of Statistics. US & Chinese officials late last week announced a phase one trade pact that included a partial rollback of some tariffs & the scrapping of further US duties on Chinese imports that were due to take effect yesterday, while Beijing promised targeted agricultural purchases. Trade Representative Robert Lighthizer said yesterday that the phase one China deal was “totally done.” He added the deal goes beyond agriculture to address intellectual property issues, has strong enforcement provisions & addresses financial services & currency issues. A number of contentious issues remain to be resolved in further “phase two” talks, which have yet to be scheduled. The first leg of the trade deal is expected to be signed in Jan, he said. Still, according to a monthly report from the Energy Information Administration, crude-oil production from 7 major US shale plays is forecast to edge up by 30K barrels a day in Jan to 9.135M barrels a day.
The Dow has been hovering around 28K (record territory) for a month, waiting for news on the trade front. Last week the news got better, although not all details are final or completely clear. At least talks are moving forward which sent the Dow to the top of its recent range. The chart below remains bullish even though day traders took profits in the PM.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
US trade officials have their eye on making a deal with the UK after Brexiteer Boris Johnson's party won a majority in a snap election last week, National Economic Council Director Larry Kudlow said. "We look forward to a trade deal with Prime Minister Boris Johnson. We'll probably get started on that very soon," Kudlow told reporters. "I believe [Deputy National Security adviser] Matt Pottinger and I are going over there in early January to talk about a lot of things including trade." "No specifics on that, but I'd say ASAP," Kudlow added. Back in Sep, Pres Trump expressed support for Johnson's efforts to yank the UK from the EU by the end of next month on the premise that it will boost trade relations between the pair of countries. Trump has promised to strike a “very big” post-Brexit trade deal with Britain, indicating that its involvement in the EU had been weighing it down. Johnson is set to begin " before Chistman" the push to secure Parliamentary approval for his Brexit deal. Buoyed by its landslide victory in last week's election, Johnson's Conservative gov plans to move fast to make good on his campaign mantra to "get Brexit done." That means ensuring legislation known as the Brexit withdrawal agreement bill is passed in time for the UK to complete its historic departure from the EU by the current deadline of Jan 31. Kudlow's remarks today come just after the US nailed down a "phase one" trade deal with China & appears poised to pass the US-Mexico-Canada Agreement once & for all, although Mexico's trade negotiator for North America has taken issue with one big aspect of the pact dealing with investigating Mexican factories. "We will work with Mexico and Canada with workers' rights," Kudlow said. "I don't think that'll be difficult and won't stop passage of USMCA."
White House sets sights on UK trade deal, Kudlow hints at talks timeline
Gold prices settled modestly lower, weighed down by strength in US bond yields but with losses capped by weakness in the $, as investors assessed a phase one trade deal between the US & China. Gold for Feb delivery fell by 70¢ at $1480 an ounce after trading between a low of $1477 & a high of $1484. Pres Trump & Chinese officials on Fri announced an agreement on a preliminary US-China trade pact. Gold gained ground in Fri's session, however, boosted by a weaker $ & a fall in Treasury yields. A weaker $ makes commodities priced in the currency to cheaper to users of other currencies, while lower yields decrease the opportunity cost of holding nonyielding assets.
Gold ends with a modest loss, pressured by strength in bond yields, as investors assess trade deal
The NY Fed's Empire State business conditions index showed subdued conditions for manufacturing in the state for the 7th straight month. The index inched up 0.6 point to 3.5 in Dec, the regional Fed bank said. The forecast called for a reading of 4.0. Any reading above zero indicates improving conditions. The new-orders index fell 2.9 points to 2.6 in Dec while shipments rose 3.1 points to 11.9. Unfilled orders continued to decline. If there was a silver lining in the data, optimism about the 6-month outlook did improve. Future capital spending plans were also stronger. In a separate reading, Markit said its preliminary flash manufacturing purchasing index slipped to 52.5 in Dec from 52.6 in the prior month. The headline index has been stuck in a range between 2 & 5 since Jul, as manufacturing has been hit hard by weak business spending & a slowdown of intl trade. Economists see signs that the sector is stabilizing. Investors look at the data mainly to get a sense of the national ISM index, which has been contracting for 4 straight months. The Dec ISM data won't come out until early next year.
Empire State index shows manufacturing remains subdued in December
Oil futures climbed to settle at a 3-month high for a 2nd consecutive session, lifted by a phase-one US-China trade deal that has de-escalated tensions between the worlds 2-large economies. West Texas Intermediate crude for Jan delivery rose by 14¢ to settle at $60.21 a barrel, while Feb Brent crude gained 12¢ to end at $65.34 a barrel. Both grades of crude ended at their highest levels since Sep 16, for a 2nd session in a row. China’s industrial production & consumption expanded at a faster-than-expected pace in Nov, according to data from the National Bureau of Statistics. US & Chinese officials late last week announced a phase one trade pact that included a partial rollback of some tariffs & the scrapping of further US duties on Chinese imports that were due to take effect yesterday, while Beijing promised targeted agricultural purchases. Trade Representative Robert Lighthizer said yesterday that the phase one China deal was “totally done.” He added the deal goes beyond agriculture to address intellectual property issues, has strong enforcement provisions & addresses financial services & currency issues. A number of contentious issues remain to be resolved in further “phase two” talks, which have yet to be scheduled. The first leg of the trade deal is expected to be signed in Jan, he said. Still, according to a monthly report from the Energy Information Administration, crude-oil production from 7 major US shale plays is forecast to edge up by 30K barrels a day in Jan to 9.135M barrels a day.
Oil marks a new 3-month high after U.S.-China trade deal
The Dow has been hovering around 28K (record territory) for a month, waiting for news on the trade front. Last week the news got better, although not all details are final or completely clear. At least talks are moving forward which sent the Dow to the top of its recent range. The chart below remains bullish even though day traders took profits in the PM.
Dow Jones Industrials
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