Dow went up 295, advancers over decliners about 3-2 & NAZ gained 43. The MLP index added 2+ to the 213s & the REIT index was steady in the 382s. Junk bond funds crawled higher & Treasuries had only limited buying (more below). Oil rebounded 2+ to the 73s & gold fell 14 to1796.
AMJ (Alerian MLP index tracking fund)
The World Trade Organization (WTO) rejected the 2018 tariffs implemented by then-Pres Trump on foreign steel & aluminum in a Fri's ruling that elicited pushback from the Biden administration. Trump imposed tariffs, taxes on imported goods, of 25% on steel & 10% on aluminum on the grounds that importing those products threatened US national security under Section 232 of the Trade Expansion Act. By raising taxes on imported steel & aluminum, the Trump administration sought to protect domestic manufacturers against what it believed was global overproduction – although Canada & Mexico along with several other nations were exempted from the tariffs. The tariffs angered US allies including the EU & Japan which led to a trade dispute at the WTO when China, Norway, Switzerland & Turkey challenged the move. In its ruling, the WTO said it was "not persuaded" that the US implemented the tariffs "in time of war or other emergency in international relations" that would justify the tariffs on national security grounds. The WTO's decision is unlikely to have much real-world impact. If the US appeals the ruling, it won't go anywhere as the WTO's Appellate Body hasn't functioned for 3 years due because the US blocked the appointment of new judges. The Biden administration also entered into agreements with the EU, Japan & the UK that functionally eliminate the tariffs & replace them with import quotas that negate the taxes on volumes of imported steel & aluminum that fall beneath the threshold. Those trading partners dropped retaliatory tariffs against the US in response to the Biden administration's changes. Despite having taken steps to negate the tariffs, the Biden administration took issue with the WTO's decision & argued it overstepped its authority by ruling against tariffs based on national security concerns. Critics of the tariffs have argued that protectionist measures make US industries less competitive. A report by the Cato Institute from last year argued the tariffs put US steel consumers at a "major cost disadvantage versus their competition in Europe and elsewhere."
Biden admin pushes back after WHO rejects Trump's tariffs
Treasury yields fell slightly as investors awaited the start of the Federal Reserve's Dec meeting & consumer inflation figures due this week. The yield on the 10-year Treasury note was down by less than a basis points to 3.565% & the 2-year Treasury yield hovered just above the flat line at 4.338% after dipping by less than a basis point. Yields & prices move in opposite directions. One basis point is equivalent to 0.01%. The Fed starts its last meeting of the year tomorrow. Investors are widely expecting officials to increase interest rates by 50 basis points, marginally slowing down the pace of rate hikes after 4 consecutive 75 basis point increases. They are also hoping that Fed Chair Jerome Powell will provide further guidance about future monetary policy in his remarks at the end of the meeting. The latest consumer inflation figures are also due to be released tomorrow. Investors will be scanning the data for insights into whether the Fed's rate hikes have been effective in pushing back against rising prices. On Fri, producer price index data showed that wholesale prices had risen by more than expected in Nov.
Treasury yields are flat as investors look ahead to Fed meeting, key inflation data
As speculation continues to swirl over the future of Treasury Secretary Janet Yellen, a new name has been placed on her short-list of possible replacements: Bank of America (BAC) CEO Brian Moynihan. Moynihan, the long-time CEO of the nation's 2nd-largest bank by assets, is regarded by the White House as a candidate to run Treasury in the future. According to people with knowledge of the Biden Administration's thinking, His name is on a very short, short-list of replacements for Yellen that includes Commerce Secretary Gina Raimondo & possible as a dark-horse candidate, Securities & Exchange Commission chair Gary Gensler. Speculation about Yellen's future with the administration has been rampant for the past year, as the economy faced rampant inflation & a possible slowdown. As Treasury Secretary, Yellen was said to be among the architects of Ts of $s in spending pushed by the White House thru a Dem controlled senate and house that stoked inflation & forced the Federal Reserve to raise interest rates. Treasury Secretaries often last a single presidential term or less because the job of leading the $23T US economy has a high burnout rate. People close to the White House say the decision to step down will be the 76-year-old Yellen's to make. Before becoming Treasury Secretary, she had a long career as a gov economist including as Federal Reserve chair during the Obama years.
New name added to short list to replace Treasury Secretary Yellen
Investors are slightly bullish about important news stories in the next 2 days. The inverted yield curve (shown above), a classic signal of a coming recession, remains in place. It has been around for most of 2022.
Dow Jones Industrials
No comments:
Post a Comment