Daily Comments

With trading somewhat muted ahead of the signing of Phase 1 of a U.S.-China trade agreement this morning, Asian markets were mostly lower. The Nikkei 225 pulled back -0.45%, and the Shanghai Composite fell -0.54%.      The Stoxx Europe 600 was basically unchanged, off -0.01%, ending at 419.54.  The DAX slipped by -0.27%, ending at 13420.16.  The FTSE gained +0.25%, ending at 7641.15. December PPI rose +0.1% (ex-food and energy +0.1%), below expectations. The January Empire State Manufacturing Survey rose modestly to 4.8. Yields on 10-year Notes fell to 1.781%.  The March US$ Index closed at 96.960. February gold jumped to $1,554.00. The EIA reported that U.S. crude production reached 13M bbl/day for the first time, and as expected, prices subsequently sank. February crude ended at $57.81. BoA revenues beat expectations, yet their stock sold off over 2.0% on a downbeat forecast. Target missed its earnings lost about 7.0%. Goldman Sachs beat on revenue but missed on profit expectations. President Trump signed the Phase One trade deal with China. In a continuation of bullish enthusiasm, major indices again struck all-time highs, sold off late, and ended mixed.

China’s December trade surplus with the U.S. narrowed to -$23.2B as imports from the U.S. rose for the first time since March. The yuan is at its strongest level since August. Asian markets were mostly higher. The Nikkei 225 rose +0.73%, but the Shanghai Composite fell back -0.28%.      The Stoxx Europe 600 was buoyant, up +0.24%, ending at 419.38.  The DAX was barely positive, by +0.04%, ending at 13456.59.  The FTSE squeaked by with a +0.06% gain, ending at 7622. The December NFIB Small Business Optimism Index came in below consensus at 102.7. December CPI rose +0.2% (ex-food and energy +0.1%), below expectations. Yields on 10-year Notes fell to 1.813%.  The March US$ Index inched up +0.06% to 97.105. February gold fell -$3.7 to $1,546.90. February crude gained 55-cents, ending at $58.04. JPM and Chase announced stronger than expected earnings. Before the open, the ES had drifted lower by about 14 points, yet by mid-morning prices had hit another all-time high. Then it was announced that the U.S. would not lift some tariffs on China until after the November election. The ES then lost about 17 points before finding a bottom, closing only marginally lower.

Taiwan’s President Tsai was re-elected in a landslide against an opponent favoring closer ties with China. Asian markets were mostly higher. The Shanghai Composite added +0.75%. The Nikkei 225 was closed for a holiday.      The Stoxx Europe 600 slid lower -0.18%, ending at 418.39.  The DAX lost -0.24%, ending at 13451.52.  The FTSE gained +0.39%, at 7617.60. The Dec. Treasury Budget Deficit was $13.3B compared to $13.5B in Dec. of 2018. Yields on 10-year Notes were steady at 1.842%.  The March US$ Index closed at 97.095, fractionally stronger. Feb. gold declined $11.20 to $1,548.90. Feb. crude sank 99-cents to $58.04. The U.S. said China will no longer be deemed a currency manipulator. The Phase One U.S./China trade agreement is slated to be signed this week. For the moment, it appears that the market feels the situation with Iran is manageable. With such optimistic tailwinds regarding the Middle East, as well as China, the broader market indices were pressed enthusiastically higher by bullish traders. Shares of Tesla continue to rocket higher, propelling Nasdaq futures to another all-time highs. Later in the session S&P 500 futures also found the will to strike all-time highs.