Stock Market News: September 12, 2019

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Stocks increased on Thursday, building on previous gains after & nbsp; a report & nbsp; that some members of the Trump administration weighed an interim trade agreement with China. "data-reactid =" 15 "> Shares rose Thursday, building on previous gains following a report that some members of the Trump administration weighed in on a temporary trade deal with China.

<p class = "canvas atomic canvas text Mb (1[ads1].0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The interim agreement would see the US delay and reverse some tariffs, in exchange for China's commitment to certain intellectual property changes and purchases of agriculture, & nbsp; Bloomberg reported and cited several unnamed persons familiar with the matter. The proposal, which is reportedly not yet signed by the president Donald Trump, would represent a mere temporary break for the ongoing trade war, rather than a lasting resolution. "Data-reactid =" 16 "> The interim agreement would see the US delay and reverse some tariffs, in exchange for China's commitment to certain intellectual property changes and purchases of agriculture, Bloomberg reported, citing several unnamed people familiar with the matter. The proposal, which is reportedly not yet signed by President Donald Trump, would represent a single temporary pause for the ongoing trade war, rather than a lasting resolution.

Here were the key features of the market as of 10:16 am ET:

• S&P 500 (^ GSPC): + 0.45%, or 13.62 points

• Dow (^ DJI): + 0, 39%, or 107.1 points

• Nasdaq (^ IXIC): + 0.75%, or 61.78 points

• 10-year Treasury Rate (^ TNX): -1.6 bps to 1.749% [19659007] Gold (GC = F): + 1.42% to $ 1,524.60 per ounce

<p class = "canvas-atom canvas -text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Prior to Bloomberg's report, a series of US and China gestures to at least temporarily -Scale the trade war had increased the risk rating. & nbsp; President Donald Trump on Wednesday said that he would postpone introducing additional $ 250 billion Chinese tariff rates within two weeks to October 15. By the end of August Trump had said he planned to increase the tariff on these goods to 30% from 25% from October 1 . "data-reactid =" 24 "> Prior to Bloomberg's report, a series of gestures by the United States and China to at least temporarily escalate the trade war increased risk conditions. President Donald Trump said on Wednesday that he would postpone the imposition of additional $ 250 billion in Chinese goods tariffs within two weeks to October 15. By the end of August, Trump had said he planned to increase the tariff for these items to 30% from 25% from October 1.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Trump & nbsp; wrote on Twitter that this "gesture of goodwill" & nbsp; was "at the request of Vice Prime Minister of China Liu He, and because the People's Republic of China is celebrating its 70th anniversary on October 1st. ”" Data-reactid = "25"> Trump wrote on Twitter that this "gesture of goodwill" was "at the request of Vice Prime Minister of China, Liu He, and because of the fact that the People's Republic of China should to celebrate its 70th anniversary on October 1st. ”

<p class =" canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" This came a day after China's Ministry of Finance & nbsp; announced that 16 U.S. product categories would be exempt from new tariffs and ahead of another round of trade talks scheduled in October between dealers from both sides. "data-reactid =" 26 "> This came a day after China's finance ministry announced that 16 US product categories would be exempt from new tariffs and ahead of a new round of trade talks scheduled in October between dealers from both sides.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Trump & # 39; s move" should be seen on as a goodwill guest the US side made sure to create good vibes for the trade talks scheduled in early October, "wrote Hu Xijin, chief editor of Chinese Communist Party-led publication Global Times & nbsp; in a Twitter post & nbsp; late Wednesday. "data-reactid =" 27 "> Trump's move" should be viewed as a benevolent gesture the US side did to create good vibes for the trade talks scheduled for early October, "said Hu Xijin, chief editor of the Chinese Communist Party's published publication Global Times wrote in a Twitter post late Wednesday.

But these seemingly reciprocal measures of calling off the trade war still leave a lot of taxes on the table for consumers and manufacturers to throw themselves into the coming On December 15, the United States will hit about $ 160 billion in Chinese imports with a 15% tariff, which had originally been pushed back to dampen some of the impact on holiday buyers. Same Day Customs Rates of Approximately $ 75 Billion in US Imports.

Even simpler

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8 cm) – sm "type =" text "content =" Overseas, the wave of monetary easing that has swept the global central banks, continued Thursday with & nbsp; The European Central Bank's recent political decision. "data-reactid =" 30 "> Overseas, the wave of monetary easing continued to sweep the global central banks on Thursday with the European Central Bank's recent political decision.

<p class =" canvas-atom canvas text Mb (1.0 em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" The & nbsp; The ECB lowered one of its key rates beyond zero representing the first reduction since 2016. It also said it would launch its quantitative easing program with a plan to buy 20 billion euros of bonds each month starting in November for as long as necessary ", in a move to help stimulate the flagging eurozone economy." data-reactid = "31"> The ECB lowered one of its key rates further below zero, representing the first such reduction since 2016. It also said that it would launch its quantitative easing program with a plan to buy 20 billion euros of bonds each month starting in November "for as long as needed", in a bid to stimulate the flagship economy of the eurozone.

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ECB reduced deposit rate to a low time of 0.5%, from negative 0.4% previously. The move, which concerns commercial bank deposits with the ECB, was widely expected by economists and is aimed at stimulating banks to lend to consumers and businesses.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "However, some exceptions apply to the negative The ECB announced that "a to – A reserve purchase system will be introduced, in which part of the bank's holding of surplus liquidity will be exempted from the negative deposit rate. “This helps reduce the effect of the bank's profitability that negative interest rates will have on commercial lenders. "data-reactid =" 44 "> However, some exceptions apply to the negative deposit rate. The ECB announced that" a two-tier reserve purchase system will be introduced, whereby part of the bank's excess liquidity portfolio will be exempted from the negative deposit facility rate. " contributes to reducing some of the impact on the bank's profitability that the negative interest rate would have on commercial lenders.

At the same time, the ECB also said it would set the benchmark interest rate at 0.000%, avoiding negative interest rates for savers. [19659017] The euro fell below $ 1.10 against the US dollar immediately after the ECB decision, with US government bonds lowering British and German government bond yields after the ECB cut interest rates and gold falling further above $ 1500 per ounce.

History continues [19659019] <p class = "canvas atomic canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The ECB decision comes a week before the US perhaps the central bank will unveil its own latest monetary policy decision. The Fed will cut reference rates for the second time in 2019, with markets priced at a 88.8% probability & nbsp; for such a result, from Thursday morning. "data-reactid =" 51 "> The ECB decision comes a week before the US central bank reveals its latest monetary policy decision. Market participants broadly expect the Fed to cut reference rates for the second time in 2019, with market prices 88.8% likely for such an outcome, as of Thursday morning.

Core consumer prices hit the highest level in a year [19659021] A target of core consumer price changes rose to one year high in August as increases in medical care and health insurance prices pushed the reading higher.

<p class = "canvas-atom canvas-text Mb (1.0 em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "The & nbsp; The Labor Department's Core Consumer Price Index (CPI) which excludes food and energy prices, increased 0.3% compared to the previous month in August. Last year, core CPI rose by 2.4%, marking the fastest annual gain since July 2018, when the same pace was recorded. "data-reactid =" 54 "> The Labor Department's Core Consumer Price Index (CPI), which excludes food and energy prices, rose 0.3% during the month before August. During the past year, the core CPI rose 2.4%, and marked the fastest annual gain since July 2018, when the same pace was recorded.

These results were greater than 0.2% and the 2.3% increase expected on a monthly and yearly basis in August, according to Bloomberg compiled estimates.

Meanwhile, the headline CPI rose by an expected 0.1% month over month and 1.7% year over year, or slightly below the projected increase of 1.8%.

The increase in consumer prices reflected in the CPI The reading on the face suggests that the Fed may need to reconsider whether to cut interest rates further as inflation rises, however, some economists noted that CPI results are unlikely to be reflected in the reading of personal consumer spending (PCE), which works as the Feds for tight targets for underlying inflation.

"Health care is important; medical services increased by 0.9% in CPI, but it will not happen in PCE," wrote Neil Dutta of Renaissance Macroeconomics in a note. "CPI covers pocket expenses only while PCE covers payments made on behalf of The PPI health care system, which PCE is leaving, was flat in August. "

Dutta also noted that other phenomena contributing to the August high CPI reading – such as rising prices for used cars – are not likely to be duplicated in the coming months.

Other economists shared these sentiments. Capital Economist Andrew Hunter noted that the increase in core CPIs in August "will not prevent the Fed from cutting interest rates again next week, but provides further reason to believe that the market's expectations of significant further relief to eventually will be disappointed. "[19659028] AMS" class = "JsEnabled_Op (0) JsEnabled_Bg (n) Trsdu (.42s) Bgr (no) Bgz (cv) StretchedBox W (100%) H (100%) ie-7_H ( a) "itemprop =" url "style =" background-image: url (https://s.yimg.com /ny/api/res/1.2/A7oFKsSyPf6sbfcjM3BCdw–~A/YXBwaWQ9aGlnaGxhbmRlcjtzbT0xO3c9NjUzO2g9MTYz/https://media-mbst-pub-ue1.s3.amazonaws.com/creatr-uploaded-images/2019-09/1dd95940-d33d-11e9 -ac9b-f4dc656bdef0); " src = "https://s.yimg.com/g/images/spaceball.gif" data-reactid = "65" />