Dow shot up 307, advancers over decliners about 4-1 & NAZ gained 82. The MLP index went up 1+ to a very depressed 200 & the REIT index rose 2+ to the 406s. Junk bond funds slid lower & Treasuries traded modestly lower. Oil climbed higher in the 58s ahead of an announcement on production cuts by OPEC & gold sank 17 to 1466
AMJ (Alerian MLP Index tracking fund)
US hiring surged in Nov, as the economy added 266K jobs & unemployment returned to a ½-century low, a sign the US is powering through a global slowdown. The payroll number easily topped the estimate of 180K. The forecast also saw the unemployment rate holding steady from Oct's 3.6%. It marks the 110th month of straight gains. Unemployment ticked down slightly to 3.5% as more people were looking for work, matching a 50-year low. The labor force participation rate was little changed at 63.2%. Average hourly earnings, meanwhile, rose by 3.1% over the past year to $28.29. Revisions, meanwhile, added 41K jobs for the prior 2 months, bringing the 3-month average to 205K, a 10-month high. (Sep increased 13K to 193K & Oct jumped by 28K to 156K). Still, job growth on average is slower than it was in 2018: The 2019 monthly average is 180K jobs per month, compared with an average gain of 223K last year. One reason for the rebound is the conclusion of the General Motors (GM) strike at the end of Oct. The motor vehicles & parts sector boosted employment with 41K workers in Nov, adding to the 54K jobs created in manufacturing last month. In Oct, when the economy added a better-than-expected 156K jobs, the motor vehicles & parts manufacturing sector posted a decline of 42K workers. The blockbuster report provides further evidence that the longest economic expansion on record will continue & reinforces the Federal Reserve's characterization of the labor market as "strong." It also affirms the central bank's decision to press pause on further interest rate cuts this year. It is widely expected that policymakers to leave interest rates unchanged at their 2-day meeting next week. Other sectors that contributed to the stellar report included leisure & hospitality, which increased by 45K, & professional & business services, which rose 38K. One concerning sign in the report is that retail added 2K jobs, even in the midst of the vital holiday shopping season.
China’s trade negotiations with the US remain on track, Beijing said, offering official reassurance after tensions flared between the world's 2 biggest economies over human-rights issues in China. The negotiating teams from both sides have maintained close communications, China's Commerce Ministry said yesterday, though it didn't provide details on progress. The recent strain had spooked investors & stoked concerns about the global economic outlook. “If China and the U.S. strike a phase-one deal, relevant tariffs should be reduced,” said Commerce Ministry spokesman Gao Feng, referring to a proposed interim agreement the 2 sides are trying to reach. During the past few days, though, officials in the US have become less optimistic about a deal. The 2 nations remain at odds over the value of US farm goods Beijing would buy, with Pres Trump looking for $40-50B a year within 2 years. That is an enormous increase from the $8.6B last year, & twice as much as China bought from the US before the trade war began in earnest in 2018. The Trump administration wants Beijing to publicly state its purchasing plans & not condition them on market circumstances or China's trade obligations, people familiar with the discussions said. Beijing is reluctant to make that pledge because it might have to divert purchases from other trading partners that are likely to object. Additionally, the 2 sides haven't yet agreed on how deep a reduction in tariffs the US would make. Currently, the US has tariffs on about $360B of Chinese goods. Unless there is a deal by Dec 15, the US is threatening 15% tariffs on $165B more in Chinese imports. While the US is willing to skip the next tariff increase, Trump & Trade Representative Robert Lighthizer are reluctant to start scrapping tariffs. Their willingness to do so depends largely on how much in farm goods Beijing will buy & how firmly it will commit to the purchases, say leakers. Tensions between the US & China rose in recent days because of 2 US bills in Congress supporting human rights in Hong Kong & in China's western region of Xinjiang. Both measure triggered objections from Beijing & vows of retaliation. The state-run tabloid Global Times said this week that China would soon publish an “unreliable entity list,” which could lead to sanctions against US companies, organizations and individuals. The newspaper said that the Xinjiang bill would harm China's interests & prompt Beijing to speed up the rollout of a blacklist of foreign entities that it says hurt Chinese businesses & national security.In a separate squabble. Beijing is now requiring US. diplomats to inform the ministry 5 days in advance of meeting with Chinese local gov officials & research or educational institutions. The new rule is retaliation for restrictions put on Chinese diplomats in the US & earlier was reported by a Chinese publication called the Paper.Reached late yesterday. The US rights legislation, which would require sanctions against Chinese officials involved in the repression of Uighur Muslims in the far-western Chinese region of Xinjiang, was passed by the House of Representatives this week & must be reconciled with a bill the Senate previously passed before it can be sent to Trump to sign into law.
Kudlow says a trade deal is close, but Trump is prepared to 'walk away' if some conditions not met
The bulls are in charge while the bears have gone into hiding. The jobs report was about as favorable as could be imagined. Of course, it is just one month's numbers & data can be volatile from one month to the next. More importantly, the China deal remains a work in progress that needs more work. That will be a key driver for stocks next week, along with the statement from the FOMC meeting.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 59.45 | 1 | +1.02 | +1.8% |
| GC=F | Gold | 1,466.70 | -16.40 | -1.1% |
US hiring surged in Nov, as the economy added 266K jobs & unemployment returned to a ½-century low, a sign the US is powering through a global slowdown. The payroll number easily topped the estimate of 180K. The forecast also saw the unemployment rate holding steady from Oct's 3.6%. It marks the 110th month of straight gains. Unemployment ticked down slightly to 3.5% as more people were looking for work, matching a 50-year low. The labor force participation rate was little changed at 63.2%. Average hourly earnings, meanwhile, rose by 3.1% over the past year to $28.29. Revisions, meanwhile, added 41K jobs for the prior 2 months, bringing the 3-month average to 205K, a 10-month high. (Sep increased 13K to 193K & Oct jumped by 28K to 156K). Still, job growth on average is slower than it was in 2018: The 2019 monthly average is 180K jobs per month, compared with an average gain of 223K last year. One reason for the rebound is the conclusion of the General Motors (GM) strike at the end of Oct. The motor vehicles & parts sector boosted employment with 41K workers in Nov, adding to the 54K jobs created in manufacturing last month. In Oct, when the economy added a better-than-expected 156K jobs, the motor vehicles & parts manufacturing sector posted a decline of 42K workers. The blockbuster report provides further evidence that the longest economic expansion on record will continue & reinforces the Federal Reserve's characterization of the labor market as "strong." It also affirms the central bank's decision to press pause on further interest rate cuts this year. It is widely expected that policymakers to leave interest rates unchanged at their 2-day meeting next week. Other sectors that contributed to the stellar report included leisure & hospitality, which increased by 45K, & professional & business services, which rose 38K. One concerning sign in the report is that retail added 2K jobs, even in the midst of the vital holiday shopping season.
US job report blows out wildest expectations with big beat
China’s trade negotiations with the US remain on track, Beijing said, offering official reassurance after tensions flared between the world's 2 biggest economies over human-rights issues in China. The negotiating teams from both sides have maintained close communications, China's Commerce Ministry said yesterday, though it didn't provide details on progress. The recent strain had spooked investors & stoked concerns about the global economic outlook. “If China and the U.S. strike a phase-one deal, relevant tariffs should be reduced,” said Commerce Ministry spokesman Gao Feng, referring to a proposed interim agreement the 2 sides are trying to reach. During the past few days, though, officials in the US have become less optimistic about a deal. The 2 nations remain at odds over the value of US farm goods Beijing would buy, with Pres Trump looking for $40-50B a year within 2 years. That is an enormous increase from the $8.6B last year, & twice as much as China bought from the US before the trade war began in earnest in 2018. The Trump administration wants Beijing to publicly state its purchasing plans & not condition them on market circumstances or China's trade obligations, people familiar with the discussions said. Beijing is reluctant to make that pledge because it might have to divert purchases from other trading partners that are likely to object. Additionally, the 2 sides haven't yet agreed on how deep a reduction in tariffs the US would make. Currently, the US has tariffs on about $360B of Chinese goods. Unless there is a deal by Dec 15, the US is threatening 15% tariffs on $165B more in Chinese imports. While the US is willing to skip the next tariff increase, Trump & Trade Representative Robert Lighthizer are reluctant to start scrapping tariffs. Their willingness to do so depends largely on how much in farm goods Beijing will buy & how firmly it will commit to the purchases, say leakers. Tensions between the US & China rose in recent days because of 2 US bills in Congress supporting human rights in Hong Kong & in China's western region of Xinjiang. Both measure triggered objections from Beijing & vows of retaliation. The state-run tabloid Global Times said this week that China would soon publish an “unreliable entity list,” which could lead to sanctions against US companies, organizations and individuals. The newspaper said that the Xinjiang bill would harm China's interests & prompt Beijing to speed up the rollout of a blacklist of foreign entities that it says hurt Chinese businesses & national security.In a separate squabble. Beijing is now requiring US. diplomats to inform the ministry 5 days in advance of meeting with Chinese local gov officials & research or educational institutions. The new rule is retaliation for restrictions put on Chinese diplomats in the US & earlier was reported by a Chinese publication called the Paper.Reached late yesterday. The US rights legislation, which would require sanctions against Chinese officials involved in the repression of Uighur Muslims in the far-western Chinese region of Xinjiang, was passed by the House of Representatives this week & must be reconciled with a bill the Senate previously passed before it can be sent to Trump to sign into law.
China offers official reassurance on trade talks with US
Larry Kudlow, White House National Economic
Council director, said the US & China are “close” to a trade deal
but that the administration was prepared to walk away if it did not get
the terms they wanted. “The president has said many times if the
deal is no good, if the assurances with respects to preventing future
thefts, if the enforcement procedure is no good he has said we will not
go for it. We will walk away,” Kudlow said. “The president has said that if we can not get the
enforcement and the assurances, then we will not go forward.” The 2 countries are in talks to finalize a phase one trade deal
as 15% tariffs on $165B in Chinese imports are set to kick in
Dec 15. Kudlow said the 2 sides are moving closer to a deal. “The
deal is close. It’s probably even closer than in mid-November,” Kudlow
said. “Deputy level met again ... The reality is constructive talks,
almost daily talks. We are in fact close...There’s no arbitrary
deadlines, but the fact remains December 15 is a very important date
with respect to a no go or go on tariffs.” He characterized the recent talks between the world's 2 largest economies as “intense.” “I
say intense because this is a very important matter,” Kudlow said.
“There’s so much at stakes here when you go through the various
categories... We can’t afford, we must not permit any country, China or
whoever, to willy nilly steal our breakthroughs in technology and
advanced micro-processing related to 5G.” Trump said yesterday
that trade talks with Beijing were going “very well.” He added that
something could happen regarding those tariffs that are set to be
imposed in less than 10 days, but added they are not discussing that
yet.
Kudlow says a trade deal is close, but Trump is prepared to 'walk away' if some conditions not met
The bulls are in charge while the bears have gone into hiding. The jobs report was about as favorable as could be imagined. Of course, it is just one month's numbers & data can be volatile from one month to the next. More importantly, the China deal remains a work in progress that needs more work. That will be a key driver for stocks next week, along with the statement from the FOMC meeting.
Dow Jones Industrials
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