The markets moved higher this week as hopes increased that a trade war can be averted. US stocks had modest gains while foreign stocks including emerging markets saw larger gains. The US and the European Union moved closer to a trade agreement that will lower existing trade barriers. Talks continued between the U.S. and Canada. Also, the Trump administration has delayed the next round of tariffs on $200BN of Chinese goods, pending talks before the end of September.
The Energy Department reported that US oil production over the past year has surpassed both Russia and Saudi Arabia for the first time since 1973. Treasury yields were mostly unchanged for the week and the dollar declined against a basket of currencies. Energy, livestock, precious metals and industrial metals price while gains fell due to strong harvest projections.
In the numbers this week:
- The China Association of Automobile Manufacturers reported vehicle sales fell 3.8% in August following a 4.0% drop in July. The decline was attributed to market saturation and a government crackdown on peer to peer lending.
- The Federal Reserve reported that industrial production rose 0.4% in August. This gain was driven largely by a 1.2% increase in utility production, due to hot weather. Factory output was up 0.2% mostly due to autos and auto parts. From a year ago industrial production in August was up 4.9%.
- The Commerce Department reported
- Producer prices fell 0.1% in August. The decline was attributed to a category called trade reserves which is not expected to repeat in future months.
- Consumer prices rose 0.2% in August. Excluding volatile food and energy, consumer prices rose 0.1%. From a year ago consumer prices were up 2.7% and 2.2% excluding volatile food and energy.
- August retail sales rose a modest 0.1%. However, July was revised from 0.5% to 0.7%. Auto sales, apparel and building material sales were all down in August.
- The Treasury Department reported that the federal budget deficit in the month of August was $214BN, nearly double what it was in August 2017.
- The Labor department reported first time claims for unemployment fell 1,000 at a seasonally adjusted 203,000. The four-week moving average of claims fell 2000 to a seasonally adjusted 208,000.
- The Energy Information Administration weekly report is attached. Also, the EIA reported
- U.S. Crude oil production remained fell from 11.0MM barrels 10.9MM barrels per day.
- Storage of natural gas rose 99BN cubic feet. Natural gas storage is below the minimum for this date during the past five years.
- According to Baker Hughes, In the past week the number of active oil rigs rose 7 to 867 and natural gas rigs were unchanged at 186.
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