“Those discussions are moving along nicely,” Trump wrote on Twitter after speaking with Xi, five days before U.S. midterm elections that will determine whether his party retains control of Congress. At a campaign rally in Columbia, Missouri, he added: “They want to make a deal.”
“He wants to do it,” Trump said of Xi. “They all want to do it.”
US markets saw
through Friday’s attempt by President Trump to goose the stock market ahead of
Tuesday’s critical mid-term elections, and the markets closed cautiously lower.
To head off an oil price rise next week, on Friday the USA blinked and gave 180
day Iran oil waivers to 8 “jurisdictions,” aka nations, allowing them to continue
buying oil from Iran. Bizarrely, they might have to pay for that oil in Euros,
and Yuan, or Rupees, rather than dollars, which from London doesn’t seem to be
in America’s own interest.
Below, when
Presidential fudge and bluster got trumped in the markets by President Trump’s
past history of reneging on deals, u-turns, and general lack of credibility. It
remains to be seen if Trump’s trumpery on a “China deal,” will be enough to fool
the voters and save the Republicans in Tuesday’s elections.
Stocks Decline as Investors Assess Trade Tensions: Markets Wrap
By Jeremy Herron, Sarah Ponczek, and Vildana Hajric
1 November 2018, 22:03 GMT Updated
on 2 November 2018, 20:04 GMT
Stocks fell as investors assessed whether the U.S. and China will be able to
ease trade tensions. Apple’s poor forecast hit tech-heavy indexes, while
Treasuries declined after U.S. hiring rebounded more than forecast in October.The S&P 500 dropped for the first time in four days, though the benchmark still had its best week in six months. The index pared about half of Friday’s loss that reached as much as 1.5 percent after President Donald Trump said he thinks the U.S. will reach a trade deal with China. Those comments countered earlier remarks by his adviser Larry Kudlow that had deepened the slide. The Nasdaq 100 paced declines as Apple retreated after underwhelming sales forecasts, while small caps edged higher.
The 10-year Treasury yield rose the most in a month to 3.21 percent and the dollar gained as investors speculated the Federal Reserve won’t be deterred from its rate-hike path after a jobs report showed annual wage gains passed 3 percent for the first time since 2009. West Texas crude fell below $63 a barrel.
“Trade negotiations will continue to be front and center,” Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, said in an interview. “At the same time, the jobs numbers were quite robust. This will push the Fed to continue raising rates.”
Doubts
remain on the capacity of earnings to deliver. Apple’s disappointing forecast for the key
holiday period suggested weaker-than-expected demand for the company’s pricier
new iPhones. Next up is mid-term elections next week. Analysts also doubted the
Trump administration’s ability to end the trade tensions any time soon.
More
China says willing to meet U.S. over trade issues on equal footing
November 3, 2018 / 3:25 AM
SHANGHAI
(Reuters) - China is willing to resolve trade issues with the United States
through mutually respectful talks and on an equal footing, said one of the
country’s vice commerce ministers Wang Bingnan on Saturday.
Beijing will
jointly promote the healthy and stable development of China-U.S. relations,
Wang told reporters at a news conference.
Trump Risks Backlash in Zeal for Deal to End China Trade War
By Jenny Leonard, Saleha Mohsin, and Jennifer Jacobs
President
Donald Trump’s newfound zeal to resolve his trade war with China risks hitting
some familiar obstacles, including himself.
Trump set up
a call with Chinese President Xi Jinping on Thursday, the first between the
leaders in six months. Afterward, he directed his Cabinet to draft potential
terms for a trade deal he could agree to with Xi at the G20 conference in
Argentina at the end of the month, according to four people familiar with the
matter.
“Those
discussions are moving along nicely,” Trump wrote on Twitter after speaking
with Xi, five days before U.S. midterm elections that will determine whether
his party retains control of Congress. At a campaign rally in Columbia,
Missouri, he added: “They want to make a deal.”
President Donald Trump’s newfound zeal to resolve his trade war with China risks hitting some familiar obstacles, including himself.
Trump set up a call with Chinese President Xi Jinping on Thursday, the first between the leaders in six months. Afterward, he directed his Cabinet to draft potential terms for a trade deal he could agree to with Xi at the G20 conference in Argentina at the end of the month, according to four people familiar with the matter.
“Those discussions are moving along nicely,” Trump wrote on Twitter after speaking with Xi, five days before U.S. midterm elections that will determine whether his party retains control of Congress. At a campaign rally in Columbia, Missouri, he added: “They want to make a deal.”
“He wants to do it,” Trump said of Xi. “They all want to do it.”
But there remains plenty of reason for pessimism.
Discord has already arisen among Trump’s trade team: U.S. Trade Representative Robert Lighthizer is opposed to a push for a deal at the G20, according to two of the people.
White House economic adviser Larry Kudlow downplayed the potential for a quick deal.
“We’re doing a normal, routine run-through of things we already put together and normal preparation,” Kudlow said on CNBC Friday. “OK, there’s no mass movement, there’s no huge thing, we’re not on the cusp of a deal.”
Trump has a history of agreeing in principle to deals before backing out. His critics say the trade pacts that he has so far completed, including a renegotiation of Nafta, represent little more than incremental improvements. And he has previously made concessions to U.S. adversaries that have drawn backlash from both Democrats and Republicans.
In May, after his last phone call with Xi, Trump agreed to ease up on sanctions imposed on Chinese telecom equipment maker ZTE Corp., saying they would cost too many Chinese jobs. The decision was roundly lambasted in Congress.
“If this does turn out to be ZTE round 2, the president will be attacked by Democrats, and some Republicans, for talking a huge game on China but instead being played,” said Derek Scissors, a China expert at the American Enterprise Institute.
History of Reneging
His critics say Trump also gave away too much to North Korean leader Kim Jong Un in negotiations over Pyongyang’s nuclear weapons program, with little to show in exchange, and was too conciliatory toward Russian President Vladimir Putin at their summit in Helsinki.And Trump’s history of reneging on agreements is presumably well understood in Beijing.
More
U.S. allows eight importers to keep buying Iran oil for now
November
2, 2018 / 8:00 AM
WASHINGTON
(Reuters) - The United States said on Friday it will temporarily allow eight
importers to keep buying Iranian oil when it re-imposes sanctions on Monday to
try to force Iran to curb its nuclear, missile and regional activities.
U.S.
Secretary of State Mike Pompeo, who announced the decision, did not name the
eight, which he referred to as “jurisdictions,” a term that might include
importers such as Taiwan which the United States does not regard as a country.
Having
abandoned the 2015 Iran nuclear deal, U.S. President Donald Trump is trying to
cripple Iran’s oil-dependent economy and force Tehran to quash not only its
nuclear ambitions and its ballistic missile program but its support for
militant proxies in Syria, Yemen, Lebanon and other parts of the Middle East.
On Twitter,
in a message designed to emphasize his “maximum pressure” policy toward Iran,
Trump included a photograph of himself modeled on a entertainment industry
poster with the headline: “Sanctions are coming November 5.”
China,
India, South Korea, Turkey, Italy, the United Arab Emirates and Japan have been
top importers of Iran’s oil, while Taiwan occasionally buys cargoes of Iranian
crude but is not a major buyer.
Turkey has
been told it will temporarily be allowed to keep buying Iranian oil, its energy
minister told reporters, as has Iraq, as long as it does not pay Iran in U.S.
dollars, three Iraqi officials said.
India and South Korea were also on the list, said a source familiar with the matter who spoke on condition of anonymity. Under U.S. law, exceptions can be granted for up to 180 days.
Oil prices
fell on Friday for a weekly loss of over 6 percent, as investors worried about
crude oversupply after the U.S. waivers.
----U.S.
Treasury Secretary Steven Mnuchin also said Washington had told the
Brussels-based SWIFT financial messaging service it was expected to disconnect
all Iranian financial institutions that the United States plans to blacklist as
of Monday. He declined to name the targeted institutions.
---- The European Union, France, Germany and Britain, parties to the nuclear agreement who are trying to keep it alive, said they regretted Washington’s decision to re-impose sanctions. The EU is creating a special mechanism that would circumvent U.S. financial sanctions on Iran.
The United
States is able to pressure other nations to stop buying Iranian oil under a
2012 law that allows the president to cut off foreign banks, including central
banks, from the U.S. financial system unless they significantly reduce
purchases.
More
If you’re expecting buybacks to rescue the stock market, think again, says strategist
Published: Nov 2, 2018 1:43 p.m. ET
After a tumultuous October, investors are regaining their footing and
counting on a safety net for stock values that may prove treacherous. One reason for renewed confidence has been that leading up to earnings releases, public companies face greater restrictions to buying back their own shares, a phenomenon known as a “buyback blackout period.”
October’s blackout period came as the S&P 500 index SPX, -0.63% lost 6.9%, its worst month since September 2011, the Dow Jones Industrial Average DJIA, -0.43% dropped 5.1% in its biggest monthly percentage fall since January 2016, while the tech-heavy Nasdaq Composite Index COMP, -1.04% was the worst-performing major benchmark, dropping 9.2% for the biggest monthly fall since November 2008.
As of the end of Thursday, roughly 73% of S&P 500 companies have reported earnings, according to FactSet. And like clockwork, the buyback announcements have begun, with companies ranging from Estée Lauder Companies EL EL, +0.82% to Intercontinental Exchange Inc. ICE, +1.38% declaring large buyback initiatives. Many analysts are counting on the return of such programs to re-energize stocks, now that earnings season is winding down.
But if you’re betting on such repurchases to power the stock market beyond its recent peaks, think again, says Vincent Deluard, global market strategist at INTL FCStone. In an interview with MarketWatch, Deluard said constituents of the S&P 500 index SPX, -0.63% are on track to buyback 30% less in stock than they did in the second quarter, and he predicts the rate will continue to slow from here.
That means the much heralded predictions that there will be $1 trillion in stock buybacks this year “won’t even come close” to being realized, Deluard estimates.
There
is a simple reason for this slowdown to continue: rising interest rates. Years
of massive monetary stimulus meant that the dividend yield for many U.S.
companies remained higher than the interest those companies had to pay on debt,
making it sensible to issue new debt to buyback shares. That all ended when the
Fed started raising interest rates, and “as a result investors are no longer
rewarding companies for purchasing their own stock,” according to Deluard.
More
With higher interest
rates to come all next year globally, depending on the outcome of Tuesday’s US
elections, next week could turn into a bloodbath for many stocks. Whatever the
outcome, President Trumps negotiating hand against China has been significantly
weaken by the week’s presidential fudge and bluster. At worst, it will be a greatly weakened
President Trump meeting President Xi, were the Republicans to lose both the
House and Senate. At best, a President Trump now desperately seeking a trade deal
before a new recession starts, probably early next year.
Dodgy
Dave Cameron: "Juncker, I haven't tasted food for 3 days."
Juncker:
"Well, I wouldn't worry about it... it still tastes the same."
How the
EU helps out. With apologies to Curly, Moe, and Larry.
The monthly Coppock Indicators finished October.
DJIA: 25,116 +176 Down. NASDAQ:
7,306 +232 Down. SP500: 2,712 +146 Down. All three slow indexes went sharply down in
October, suggesting there’s more of the correction to come.
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