Market Weekly: April 1 – 6 2019

Viewing 15 posts - 16 through 30 (of 32 total)
  • Author
  • #20361

    S&P Futures Higher on FT Headline “US and China draw closer to final trade agreement”

    But There are Plenty of Buts

    Top US and Chinese officials have resolved most of the issues standing in the way of a deal
    but are still haggling over how to implement and enforce the agreement

    FT cite ‘people briefed on the talks’

    Liu He, China’s vice-premier preparing to meet US trade representative Robert Lighthizer, the , and US Treasury secretary, Steven Mnuchin for a potentially deal making negotiation session starting Wednesday in Washington.

    Although an agreement was within reach, the two sides remain apart on two key issues — the fate of existing US levies on Chinese goods, which Beijing wants to see removed, and the terms of an enforcement mechanism demanded by Washington to ensure that China abides by the deal.

    “We’re getting into the end-game stage,” said Myron Brilliant, executive vice-president for international affairs at the US Chamber of Commerce. “Ninety per cent of the deal is done, but the last 10 per cent is the hardest part, it’s the trickiest part and it will require trade-offs on both sides,” he told reporters on Tuesday.

    If this week’s round of discussions is successful, it could pave the way for a summit between Donald Trump, the US president, and Xi Jinping, the Chinese president, this month, to sign an agreement that would lift a big cloud hanging over the global economy and financial markets. But in the absence of a breakthrough this week, China and the US could decide to extend the negotiations, possibly all the way until the G20 summit in Japan at the end of June. In the most destabilising scenario, the talks could be ended abruptly, leading to a new escalation in tariffs and new stress for the markets.

    “Decisions have to be made: do we want this deal or not?,” said Derek Scissors, a resident scholar at the American Enterprise Institute, a conservative-leaning think-tank. “Until President Trump looks at the final version, and listens to Lighthizer’s recommendation and decides he wants to stand up and endorse this, there’s always a possibility it doesn’t happen.”The deal under consideration would include a ramp-up in Chinese purchases of US goods to narrow the burgeoning bilateral trade deficit and a series of measures by Beijing to open its market to foreign businesses, including in digital trade. It is also expected to include some pledges by China to rein in the forced transfer of technology from US companies and the alleged theft of intellectual property. However, the breadth of Chinese concessions on these fronts remains unclear.

    The biggest source of tension between the US and China regards what happens the day after a deal is reached. China wants to see the tariffs imposed by Mr Trump’s administration on $250bn of goods over the past year removed immediately, while Washington wants to preserve some of them in order to keep pressure on Beijing to comply with the deal. Meanwhile, Mr Lighthizer is insisting on Washington’s right to unilaterally impose punitive tariffs on China if there is a violation of the agreement, and a guarantee that China would not retaliate with its own tariffs or challenge the action at the World Trade Organization — difficult concessions for Beijing to accept because they are seen as undermining its sovereignty.

    One possible compromise could involve a gradual lifting of US tariffs based on specific triggers and implementation dates, people close to the talks have said. Larry Kudlow, the director of the White House National Economic Council, gave little hint of what may come in the talks this week, saying he expected “additional headway” to be made, but adding that there were still “some issues” to be resolved in what was a “larger, grander discussion than anything we’ve ever had before” with China. “Things have to get done, I’m not going to get ahead of that story, we’ll see,” Mr Kudlow said. Since Mr Trump and Mr Xi agreed to launch talks to end their trade war at the G20 summit in Buenos Aires last December, hopes for an agreement have waxed and waned. In late February, after Mr Liu’s last visit to Washington, a deal seemed extremely close, but the negotiations slowed again in March. Last week, Mr Mnuchin and Mr Lighthizer were back in Beijing, and the atmosphere improved.

    “Both governments understand the stakes here. We have been encouraged by the tone over the past few weeks,” Mr Brilliant said. William Zarit, a senior counsellor at the Cohen group, said the Chinese were also “pretty optimistic” about the prospects for a deal, despite worries among hawks in Beijing that they are at risk of conceding too much. “You wouldn’t see such frequency of visits if they weren’t getting anywhere,” said Mr Zarit, a former US official based in China. Observers of the US-China relations have cautioned that even if a deal is reached, it would not eliminate the other sources of tension in the economic and strategic duel between Washington and Beijing

    . “My impression is that the Chinese expect other issues to become more salient in the bilateral relationship after a trade deal is signed, including South China Sea, Taiwan and Xinjiang,” said Bonnie Glaser, senior adviser for Asia and director of the China Power Project at the Center for Strategic and International Studies in Washington. But Andy Rothman, an investment strategist at Matthews Asia, said without a trade agreement, those “longer-term tensions” in the US-China rapport could not even start to be discussed in a meaningful way — and that agreement could be coming soon. “Both Trump and Xi seem determined to do a reasonable deal, and that’s the key element,” he said.



    [size=5][i]FUTURES are GREEN … DOW up about +100
    While concerns are always there — FED is on hold & strong USA economy ROCKS ON
    Beautiful spring day in SW VA … have seen 1st robins, dandelin, & peach trees may bloom soon
    plus DEER are always around — as they plot attack methods to devour our 7 acres of paradise – lol
    as we celebrate rock hall of fame week — Favorite song is dedicated to the critters 8)[/i][/size]


    [size=5][i]Good morning & hope it is a good day for all 8)

    2018 TAXES WERE EASIER to do manually than first thought … Just wanted to share that 2018 TAXES were not bad at all to do manually & as I’m adept at EXCEL, I have programmed it for all adjustments. In doing both our family & son’s taxes. And we did better all the way around than in 2017 🙂 – despite the fake news of no benefit except to companies — as noted in media :whistle:

    I know tax bill helps companies more — but public utilities are lowering rates to pass on the 35% to 22% rate savings … and if companies can do better, more employees can be hired or afforded. Hopefully a bigger problem of DEBT & unfunded LIAB can be addressed in future also :unsure:

    As I don’t use tax software — I do use the IRS PDF forms & type in amounts using Adobe (even copy/paste from year to year so everything is accurate). Having worked in field of computer cybersecurity, I always print/mail to IRS — as am old-fashioned in some respects — but SAFE 🙂

    First impression of forms were what caused me to panic, esp. how brand new 1040 Schedules 1-6 forms work … the 6 schedules are actually small divisions of the 1040 LONG form … Many wait until last minute to even get started — and this year esp. it’s good to start early to understand new forms + most importantly to know how much you’ll possible DIFF this year as we transition to new system.[/i][/size]



    Brexit Latest::::

    May and Corbyn to meet at 1330 GMT (9:30 am in ET)
    Want to move forward quickly and bring something to EU
    Would need to tell EU promptly if any new plan before Wednesday’s summit
    Length of Brexit extension is not entirely in our grip, must be agreed by EU


    US March ADP Employment Report

    Employment +129K vs +175K expected
    Prior +197K (revised up from 183K)
    Expectations were from 125K to 240K
    Smallest increase since Sept 2017
    Goods producing -6K
    Service producing +135K


    Helmholtz Watson



    US MBA mortgage applications w.e. 29 March +18.6% vs +8.9% prior

    Big Jump as Rates Fall

    Purchase index 276.6 vs 267.5 prior
    Market index 503.6 vs 424.6 prior
    Refinancing index 1,786.0 vs 1,289.5 prior
    30-year mortgage rate 4.36% vs 4.45% prior


    A “cautious” GREEN FINISH 8)

    [size=5][b][color=green]Dow 26,218.13 39.00 0.15%
    S&P 500 2,873.40 6.16 0.21%
    Nasdaq 7,895.55 46.86 0.60% [/color]
    Gold 1,294.60 -0.70 -0.05%
    Oil 62.47 0.01 0.02%[/b][/size]

    [color=purple][size=5][i]P..S. Prayers extend for Mick – who will go under knife for heart surgery on Friday
    Some of their best below on this rock & roll hall of fame week 8) [/i][/size][/color]


    Loaded Layoff and Jobless Claims here with AFP pre NFP tomorrow

    US Expecting Bounce in Jobs for March Employment Outlook


    [size=5]$36 BILLION (becomes 4th richest woman in world) with 25% ownership of stock shares — while Jeff retains 75% plus key holdings in other areas like Washington Post (he can have it – lol)


    [color=purple][size=5][i]Relief Rally — as this “general Patton like president” will NOT shutdown border at end of week :woohoo: … instead will give a year or so for meaningful improvements & reductions (esp. drugs) …. Also, the 75/25% boundaries of the divorce deal for Amazon CEO was better than expected & these “borderlines” helped NASDAQ recover some in final hour :whistle:

    Everyone is focused on the BORDERLINE these days 😉 8)[/i][/size][/color]

    [size=5][b][color=green]Dow 26,384.63 166.50 0.64%
    S&P 500 2,879.39 5.99 0.21%[/color]
    Nasdaq 7,891.78 -3.77 -0.05%
    Gold 1,297.50 2.20 0.17%
    Oil 62.13 -0.33 -0.53%[/b][/size]


    [quote=”CautiousInvestor” post=10191][size=5]$36 BILLION (becomes 4th richest woman in world) with 25% ownership of stock shares — while Jeff retains 75% plus key holdings in other areas like Washington Post (he can have it – lol)

    Now the world’s most eligible divorcee


    [size=5][color=purple][i]WOW — #45 may appoint right leaning talk show host Herman Cain to FED … The media & opposition party will definitely take issue. Although I did like concepts of the 9/9/9 flat tax years ago. Next Shaun & Rush will be on list – LOL …

    And I did not know he had prior experience, plus does have great business background. I have actually heard him some in past on radio & he did good job there — as I usually have on quietly in background while I work. Maybe the FED swamp needs to be drained & “audited“.

    May not be best of financial picks — but he would be highly supportive of #45s economic agenda … and will wait to see what develops next 8)

    Never a dull day on either WALL ST or “K” street these days 😉 🙂 [/i][/color][/size]

    [size=5][i]Cain, 73, has prior Fed experience, having served as a director on the board of the Kansas City Fed from 1992 to 1996, ultimately becoming the board’s chairman. That role has little bearing however on setting monetary policy. Cain is known for being the chairman and CEO of Godfather’s Pizza and for his run for president as a Republican in 2012. He had a memorable tax plan called 9-9-9. It would have eliminated the tax system and replaced it with a 9% personal income tax, a 9% corporate income tax and a 9% sales tax.

    Media already critiquing — Mark Gertler, one of the most cited researchers in macroeconomics who teaches at New York University, said it was “hard to imagine any two worse candidates for Fed positions than Stephen Moore and Herman Cain. I guess not even the Fed can escape this ‘up-is-down’ world.” Gertler said both candidates lack relevant qualifications and experience and have made past statements that “display ignorance about monetary policy.”[/i][/size]


    [size=5][color=teal][b]Excellent “mother of all reports” with +196,000 jobs & 3.8% U/E

    GREEN on WALL STREET — DOW & other indexes are all up slightly
    As “good news on MAIN ST” sometimes is “bad news on WALL ST”
    As FED could do a hike later in year if things heat up
    Also market watch notes that we are seeing slowdown rather than recession
    VP Pence had great saying “


    YAY – Super GREEN finish on a great JOBS report 8)
    [color=green][size=5][b]Dow 26,424.99 40.36 0.15%
    S&P 500 2,892.74 13.35 0.46%
    Nasdaq 7,938.69 46.91 0.59%
    Gold 1,295.90 1.60 0.12%
    Oil 63.28 1.18[/b][/size][/color]

Viewing 15 posts - 16 through 30 (of 32 total)
  • You must be logged in to reply to this topic.