Gina Heeb

<a id="56fe9ae9-6892-3847-a8fa-171a72832985" href="https://markets.businessinsider.com/commodities/gold-price?utm_source=intl&amp;utm_medium=ingest"> Gold </a> was headed for its best weekly gain in nine months on Friday after the jobs report showed hiring slowed in November, renewing expectations for the Federal Reserve to pursue a slower rate path next year.

Spot prices of the yellow metal climbed 1% at 2:15 p.m. ET to around $1,250 per ounce, the highest since July. Meanwhile, the greenback fell against a basket of peers.

"Dollar is down and gold is up slightly – both expected reactions to more dovish expectations for 2019," said Chris Gaffney, president of World Markets. "Jobs data was slightly weaker than expected, alleviating some of the investor anxiety over the future of interest rates."

The Labor Department said early Thursday the economy added 155,000 jobs in November, well below expectations of 198,000, and the unemployment rate held near historic lows at 3.7%. Wages grew at a slightly slower-than-expected pace, rising 0.2% for a second month.

Gaining about 2% this week, gold prices are on track for the best seven-day stretch since March, <a id="6a3b732b-c061-3d84-aced-02836eb26fa2" href="https://www.reuters.com/article/global-precious/precious-gold-hits-5-month-peak-as-u-s-jobs-data-tempers-rate-hike-views-idUSL4N1YC49L"> according to Reuters. </a>

Gold prices was down 0.5% over the past year.

<a id="3a46b60b-1481-3520-a86e-cb0564ab9e95" href="https://www.businessinsider.com/stock-market-2019-forecasts-sp-500-year-end-targets-from-wall-street-strategists-2018-11?utm_source=markets&amp;utm_medium=ingest?utm_source=intl&amp;utm_medium=ingest"> 'It ends next year': What Wall Street's biggest firms are forecasting for the stock market in 2019, and where they say you should put your money </a>

<a id="20888c73-5c5b-3a3c-ad62-e0514bed9366" href="https://www.businessinsider.com/4front-ceo-talks-about-whats-next-after-merger-2018-12?utm_source=markets&amp;utm_medium=ingest?utm_source=intl&amp;utm_medium=ingest"> A top cannabis CEO talks about what's next following a $300 million merger, and says he's playing 'Risk' while his competitors are playing 'Monopoly' </a>

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Gold is eyeing its best week since March after the jobs report disappoints

As the housing market cools down across the US, economists say rental prices could be set to rise.

Declines in residential-construction activity and rising interest rates are expected to compound historic housing shortages across the country, pricing an increasing number of Americans out of the market. Meanwhile, reduced mortgage-interest deductions and new caps on state and local tax deductions have reduced incentives for Americans to own homes.

Many economists expect the housing market will continue to slow, which could drive more Americans to rent instead. Apartment vacancy rates have fallen to 5.6% in the third quarter of 2018 from 5.9% last year, according to Real Capital Analytics, a research firm.

"Home sales are set to tread water over the next couple of years, which is good news for the rental sector," Capital Economics economists Matthew Pointon and Andrew Burrell wrote in a recent research note. "If Americans aren’t buying homes, many will look to rent one instead."

Rental demand looks set to rise. In a recent <a href="https://www.nmhc.org/research-insight/" id="113878b3-0b1a-3b9c-af6d-de757a4de6cd"> National Multifamily Housing Council survey </a> , the number of landlords reporting tightening rental conditions on a seasonally-adjusted basis rose to its highest level in more than a year.

Economists expect that would lead to rental price increases within the next year or so, depending on how much supply comes onto the market in the meantime. Meeting demand could be particularly difficult in the West and in the South, according to First American chief economist Mark Fleming, as younger renters move toward technology hubs.

"We’ve witnessed this dynamic play out in cities, especially coastal markets, where the tide of millennial demand has contributed to tight apartment inventories and increasing rental costs," Fleming said.

Against a backdrop of historically low unemployment levels and signs of upward pressure on wages, those dynamics lead to confusion among consumers and delay investment.

Americans are used to seeing the housing market perform in tandem with the economy, according to Jonathan Miller, chief executive of Miller Samuel, a real estate and appraisal firm. But with a growing disconnect between the two, he said buyers seem to be hesitating.

"Consumers are still looking to buy, but they’re waiting until they’re more comfortable," he said. "People have a lot to process, and the sense of urgency to buy hasn’t been there in more than a year."

<a href="https://www.businessinsider.com/stock-market-2019-forecasts-sp-500-year-end-targets-from-wall-street-strategists-2018-11?utm_source=markets&amp;utm_medium=ingest?utm_source=intl&amp;utm_medium=ingest" id="3a46b60b-1481-3520-a86e-cb0564ab9e95"> 'It ends next year': What Wall Street's biggest firms are forecasting for the stock market in 2019, and where they say you should put your money </a>

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A housing-market slowdown could be bad news for renters

Rental demand looks set to rise. In a recent <a id="113878b3-0b1a-3b9c-af6d-de757a4de6cd" href="https://www.nmhc.org/research-insight/"> National Multifamily Housing Council survey </a> , the number of landlords reporting tightening rental conditions on a seasonally-adjusted basis rose to its highest level in more than a year.

<ul><li> On Tuesday, Wall Street suffered its worst day since October. </li><li> <a href="https://markets.businessinsider.com/?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=markets&amp;utm_medium=ingest?utm_source=intl&amp;utm_medium=ingest">Watch the major US indexes trade in real time here.</a> </li></ul>

Stocks were mostly higher Friday after the Labor Department said the US added fewer jobs than expected last month, renewing expectations for the Federal Reserve to pursue a slower rate path.

The Dow Jones Industrial Average climbed 0.3%, or about 70 points. The Nasdaq Composite fell 0.15%, and the S&amp;P 500 rose 0.2%.

The US economy <a id="6aa0bd0f-f5dc-34a3-a692-4c0941adfcae" href="https://www.businessinsider.com/us-unemployment-rate-jobs-report-and-wage-growth-november-2018-2018-12?utm_source=intl&amp;utm_medium=ingest"> added 155,000 jobs in November </a> , well below expectations of 198,000, and the unemployment rate held near historic lows at 3.7%. Wages grew at a slightly slower-than-expected pace, rising 0.2% for a second month.

"For markets, of course, this is the new Goldilocks: still strong-enough job growth, but a more cautious Fed will be good for markets and overall business confidence," said Josh Wright, chief economist at iCIMS Inc.

Treasury yields seesawed as market watchers digested the report. After initially falling, the yield on the benchmark 10-year note erased its early losses and climbed backed to unchanged near 2.895%. All eyes have been on rates this week after parts of the yield curve inverted, an occurrence seen as a potential recession signal. The <a id="75430f48-f1f8-34ff-a08f-feb9f21ae258" href="https://markets.businessinsider.com/index/us-dollar-index?utm_source=intl&amp;utm_medium=ingest"> dollar </a> slipped against a basket of peers.

"The immediate reaction in Treasuries was that this is a soft report, but yields are now back to the pre-data level; we think that makes sense," Ian Sheperdson, chief economist at Pantheon Macroeconomics, said in an email. "These numbers won't deflect the Fed next week, and we see every reason to expect a return to 200K job gains in December."

Officials are still expected to hike the fed funds rate by a quarter percentage point to a target range of 2.25% to 2.5% next week, but the path for next year is less clear.

Federal Reserve Chair Jerome Powell emphasized the strength of the labor market late Thursday, <a id="7677d47a-6762-3984-addf-a90c1cf3be6f" href="https://www.bloomberg.com/news/articles/2018-12-06/powell-says-u-s-labor-market-very-strong-by-many-measures"> saying </a> "by many national-level measures, our labor market is very strong." The Wall Street Journal had earlier <a id="80e39a80-f6d7-3720-a2c6-6fe75bbd02b8" href="https://www.wsj.com/articles/restrained-inflation-reduces-urgency-for-quarterly-rate-increase-pattern-1544127856"> reported </a> the central bank may adopt a "wait-and-see approach" to future policy decisions.

The S&amp;P 500s energy sector jumped nearly 2% after OPEC <a id="c91202c8-d9b2-36f5-a635-566530cd2b7c" href="https://www.wsj.com/articles/saudis-still-skeptical-of-opec-coalition-cuts-1544178705"> reached a deal </a> to cut coordinated output levels. Oil spiked following the agreement, with <a id="8d91bb86-50e0-3f4d-a6a2-692bd7d5a089" href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=intl&amp;utm_medium=ingest"> West Texas Intermediate </a> trading at $53.50 per barrel and <a id="9ea58116-c58d-3972-a5d7-5c1e2214248f" href="https://markets.businessinsider.com/commodities/oil-price?utm_source=intl&amp;utm_medium=ingest"> Brent </a> at $62.68. Prices are still in bear territory, however, losing nearly a quarter in value since the beginning of November.

On the trade front, President Donald Trump said early Friday that "China talks are going very well!"Wall Street suffered its worst session since October on Tuesday following the arrest of Meng Wanzhou, chief financial officer of Huawei Technologies. The incident cast doubt on trade relations between Washington and Beijing, who agreed last weekend to pause tariff escalations for negotiations.

Elsewhere, Altria, one of the largest tobacco companies in the world, jumped more than 2% after announcing plans to <a id="379d128a-d870-3d33-a9bf-cee3def4dba6" href="https://markets.businessinsider.com/news/stocks/weed-stocks-marlboro-maker-altria-cronos-18-billion-investment-2018-12-1027790493?utm_source=intl&amp;utm_medium=ingest"> invest $1.8 billion in the cannabis producer Cronos </a> .

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Traders work on the floor of the New York Stock Exchange ahead of the opening bell in New York, U.S., February 7, 2018. REUTERS/Brendan Mcdermid

Stocks opened mostly higher Friday after the US jobs report showed a slowdown in hiring.

Stocks reverse overnight losses after the disappointing jobs report bolsters expectations for a less aggressive Fed

The S&amp;P 500’s energy sector jumped nearly 2% after OPEC <a id="c91202c8-d9b2-36f5-a635-566530cd2b7c" href="https://www.wsj.com/articles/saudis-still-skeptical-of-opec-coalition-cuts-1544178705"> reached a deal </a> to cut coordinated output levels. Oil spiked following the agreement, with <a id="8d91bb86-50e0-3f4d-a6a2-692bd7d5a089" href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=intl&amp;utm_medium=ingest"> West Texas Intermediate </a> trading at $53.50 per barrel and <a id="9ea58116-c58d-3972-a5d7-5c1e2214248f" href="https://markets.businessinsider.com/commodities/oil-price?utm_source=intl&amp;utm_medium=ingest"> Brent </a> at $62.68. Prices are still in bear territory, however, losing nearly a quarter in value since the beginning of November.

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Wall Street wiped out gains for the year Thursday as concerns about a cocktail of factors including trade tensions, Treasury yields, and energy prices weighed on global markets, extending losses following the worst day for US equities in seven weeks.

The Dow Jones Industrial Average shed 1.95%, or more than 487 points. The Nasdaq Composite fell 1.99%, and the S&amp;P 500 was down 2.02%.

Selling pressure on futures was so strong in the first six minutes of trading that the CME Group Inc. was forced to intervene with market pauses to prevent severe price movements, according to <a id="7a786f31-c260-33a8-ad6f-2c122b33a418" href="https://www.bloomberg.com/news/articles/2018-12-06/-sell-all-battle-cries-heard-across-markets-ahead-of-u-s-open"> Bloomberg </a> .

Wall Street had suffered its worst day since October on Tuesday as expectations for a trade deal between Washington and Beijing unwound and after sections of the yield curve inverted. The stock market was closed Wednesday, a national day of mourning for former President George H.W. Bush who died over the weekend.

Canadian authorities said they arrested Meng Wanzhou, the chief financial officer of the Chinese cellular giant Huawei Technologies, on charges related to alleged Iran sanctions violations. The December 1 arrest cast doubt on trade relations between Washington and Beijing, who agreed over the weekend to pause tariff escalations for negotiations.

Optimism around the trade-war ceasefire has since waned after President Donald Trump called himself "a Tariff Man" in a tweet about Beijing, cementing expectations for further trade escalations between the largest economies if a deal isn’t reached within the next three months.

"The market's in repair mode following one of the worst equity selloffs of the year," Mark McCormick, a strategist at TD Securities, said in an email.

"There are many moving parts to the puzzle and yet Tariff Man's tweet looms large. It also wreaks of a classic 'buy the rumor, sell the fact' trade where the market priced in a bulk of the good news weeks ago."

Treasury yields continued to slide Thursday, with the 10-year down 6.3 basis points to 2.86% and the 2-year 8.6 basis points lower at 2.725%. Spreads between some long- and short-term bonds inverted this week, an occurrence seen as a potential recession signal, for the first time since the financial crisis. The <a id="423c613e-e76c-30b8-a460-0022066b109e" href="https://markets.businessinsider.com/currencies/usd-jpy?utm_source=intl&amp;utm_medium=ingest"> dollar </a> slipped 0.4% against the Japanese yen.

<a id="f24420f1-cc42-3e5b-ad06-17b1c9a364ae" href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=intl&amp;utm_medium=ingest"> Oil prices </a> slipped further into a bear market after OPEC reportedly reached an agreement to slash coordinated output levels by less than expected. West Texas Intermediate dropped 3.3% to around $51 per barrel, and Brent fell to just below $60.

Adding to concerns, the lens maker Largan Precision said its November revenue <a id="02b1d9d2-53af-3db1-a8a9-64f8d24721d5" href="https://www.businessinsider.com/apple-stock-suppliers-fall-after-iphone-lens-maker-reports-sales-drop-2018-12?utm_source=intl&amp;utm_medium=ingest"> declined by more than a quarter </a> from the same period a year earlier. <a id="8171262c-7b3a-3ab5-a505-6377b21998eb" href="https://www.businessinsider.com/apple-stock-suppliers-fall-after-iphone-lens-maker-reports-sales-drop-2018-12?utm_source=intl&amp;utm_medium=ingest"> Shares of Apple suppliers </a> — including Lumentum (-2.8%), Micron (-2.9%) and Texas Instruments (-2%) — tumbled after the results.

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Dow dives nearly 500 points, wiping out its gains for the year

Wall Street fell sharply Tuesday after optimism for easing trade tensions between Washington and Beijing faded and as Treasury yields turned lower, stirring concerns about the prospect of slowing economic growth around the world.

The Dow Jones Industrial Average dropped 2.1%, or as many as 600 points. The Nasdaq Composite shed 2.4%, and the S&amp;P 500 was down 2%. The three US indices had all rallied more than 1% Monday as President Donald Trump touted his meeting with Chinese President Xi Jinping over the weekend in Argentina.

But optimism faded after key details on the framework of a deal appeared unsettled. Not helping the mood, Trump named US Trade Representative Robert Lighthizer <a id="b463e484-d7f9-3304-a742-8427c0e93174" href="https://www.businessinsider.com/us-china-trade-war-robert-lighthizer-trump-delegation-2018-12?utm_source=intl&amp;utm_medium=ingest"> to lead negotiations with China </a> . With Lighthizer seen as a hardliner on China, the pick cast doubt on the likelihood of a quick agreement.

"While this outcome is preferable to many alternatives, investors should be clear that agreeing to negotiate is no guarantee of resolution,” said Ron Temple, managing director and head of US Equities at Lazard Asset Management. "Details are scant and the two sides have offered different statements of what was agreed."

Treasury yields continued to slide, with the 10-year down 4.8 basis points to 2.922%. Spreads between long- and short-term bonds inverted for the first time since the financial crisis, marking a move seen as a <a id="b8925d29-6ca9-37c7-aab5-9df8bb4f71f4" href="https://www.businessinsider.com/interest-rate-spreads-close-to-signaling-recession-2017-6?utm_source=intl&amp;utm_medium=ingest"> potential recession signal </a> .

"The inversion of parts of the yield curve is further evidence that investors are coming round to our downbeat view of the prospects for the US economy, and points to further weakness in the S&amp;P 500," said John Higgins, an analyst at Capital Economics.

The <a id="423c613e-e76c-30b8-a460-0022066b109e" href="https://markets.businessinsider.com/currencies/usd-jpy?utm_source=intl&amp;utm_medium=ingest"> dollar </a> stumbled 0.7% against the Japanese yen, a closely-watched exchange rate during times of financial stress.

Oil prices were mixed ahead of a meeting Thursday and Friday among OPEC and other major producers led by Russia, who are expected to make a deal to cut coordinated output levels. <a id="8d91bb86-50e0-3f4d-a6a2-692bd7d5a089" href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=intl&amp;utm_medium=ingest"> West Texas Intermediate </a> fell to trade just below $53 per barrel, while Brent rose 0.5% to nearly $62.

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The Dow drops 600 points as trade fears ratchet back up

The Dow Jones Industrial Average dropped 2.1%, or nearly 600 points. The Nasdaq Composite shed 2.4%, and the S&amp;P 500 was down 2%. The three US indices had all rallied more than 1% Monday as President Donald Trump touted his meeting with Chinese President Xi Jinping over the weekend in Argentina.

But optimism faded after key details on the framework of a deal appeared unsettled. Not helping the mood, Trump named US Trade Representative Robert Lighthizer <a href="https://www.businessinsider.com/us-china-trade-war-robert-lighthizer-trump-delegation-2018-12?utm_source=intl&amp;utm_medium=ingest" id="b463e484-d7f9-3304-a742-8427c0e93174"> to lead negotiations with China </a> . With Lighthizer seen as a hardliner on China, the pick cast doubt on the likelihood of a quick agreement.

Treasury yields continued to slide, with the 10-year down 4.8 basis points to 2.922%. Spreads between long- and short-term bonds inverted for the first time since the financial crisis, marking a move seen as a <a href="https://www.businessinsider.com/interest-rate-spreads-close-to-signaling-recession-2017-6?utm_source=intl&amp;utm_medium=ingest" id="b8925d29-6ca9-37c7-aab5-9df8bb4f71f4"> potential recession signal </a> .

The <a href="https://markets.businessinsider.com/currencies/usd-jpy?utm_source=intl&amp;utm_medium=ingest" id="423c613e-e76c-30b8-a460-0022066b109e"> dollar </a> stumbled 0.7% against the Japanese yen, a closely-watched exchange rate during times of financial stress.

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The Dow drops nearly 600 points as trade fears ratchet back up

A cease-fire between the US and China sparked hopes that the world’s largest economies can scrap protectionist policies that have cast uncertainty on the American agriculture sector. But for some farmers, damage from tariffs will outlast the trade war.

In a sideline meeting with Chinese President Xi Jinping on Saturday at the G20 summit in Argentina, President Donald Trump <a id="8881da18-3613-3813-a5dd-bd8f97984b10" href="https://www.businessinsider.com/trump-china-trade-war-xi-jinping-meeting-at-g20-course-2018-11?utm_source=intl&amp;utm_medium=ingest"> agreed to put off plans </a> to more than double the rate on most tariffs against Beijing to 25% at the beginning of next year.

With China agreeing to buy more agricultural goods from the US — though the amount wasn't specified —Trump quickly hailed the agreement as a victory for American farmers. Beijing has sought to reduce dependence on American farms as it retaliates against his administration, which imposed a flurry of tariffs on China in attempt to force change to trade practices seen as unfair.

"Farmers will be a a very BIG and FAST beneficiary of our deal with China," he <a id="3be21e03-2b48-3376-a12a-0deffb3f51c4" href="https://twitter.com/i/web/status/1069577273819443200"> wrote </a> on Twitter on Monday. "They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants."

While orders from China would all but sure pick back up if tariff levels were lowered to previous levels, it isn’t clear to what extent. Trade relationships have shifted. Futures contracts have been locked in. American crops have <a id="da028335-ce16-3b74-ad28-69af4e048c97" href="https://www.nytimes.com/reuters/2018/11/21/business/21reuters-usa-trade-china-grains.html"> rotted </a> .

Some farmers may not be able to get back customers they lost in wake of retaliatory duties. To avoid a 25% tax on shipments from American soybean growers, for example, the Chinese have turned to other major producers like Brazil. Soybean exports from the US to China fell 94% through mid-October compared with last year’s harvest, <a id="a33089e6-f9a7-3138-a86a-3358640b5d04" href="https://www.nytimes.com/2018/11/05/business/soybeans-farmers-trade-war.html"> the New York Times reported last month </a> .

Chad E. Hart, an agricultural economist at Iowa State University, estimates soybean farmers could recover around half of market share over the next year if tariffs were lifted immediately. In the long run, he said that could increase to about three quarters.

"We won't gain back everything we lost," Hart said. "We sort of lost our window of opportunity in the Chinese market, at least for this growing season. Once you've established trade flow and get that shipping all worked out, it's hard to want to move away from that."

While the window for the US to fill the Chinese soybean market before Brazilian crops come online dwindles, key details on the framework for an agreement <a id="78607594-23eb-336c-aeaf-896f363a6504" href="https://www.businessinsider.com/trump-xi-jinping-trade-war-tariff-delay-deal-2018-12?utm_source=intl&amp;utm_medium=ingest"> remain hazy </a> .

For instance, there could be a marked difference between what a "very significant" amount of agricultural goods means for each side. For American farmers, Hart said that would mean increasing both government and private purchases. He expects Beijing would only guarantee government purchases, while the rest would depend on price conditions.

Trump has vowed to pursue further escalations if a deal isn’t reached by a 90-day deadline set by his administration, a case that could lead to prolonged trade tensions.

Net soybean exports from the US will fall by nearly a third over the medium term in that case, estimates Wallace E. Tyner, a senior fellow at the National Center for Food and Agricultural Policy who teaches economics at Purdue University. Up to nine million acres of soybean fields could be lost to Brazil, he said.

"The real danger is that in the medium term, Brazil could plant a lot more soybean acreage," he said. "They're lower cost producers than we are. Once it's established and they have the infrastructure in place, that's a market we'll lose forever."

Still, some are just relieved by the possibility conditions might improve. After months of discounted prices and halted shipments, Iowa farmer and American Soybean Association president John Heisdorffer said the agreement was the first positive news for farmers since trade tensions began.

"If this suspension of tariff increases leads to a longer-term agreement, it will be extremely positive for the soy industry," he said in a statement. "We want to begin repairing damage done to our trade relations with China, which has been essential to successful soybean exports for years."

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America's farmers 'won't gain back everything' they've lost in Trump's trade war

Stocks soared Monday after the US and China reached a <a id="cca6316f-3311-31b8-a91d-10072c9f8ebe" href="https://www.businessinsider.com/trump-china-trade-war-tariffs-90-days-2018-12?utm_source=markets&amp;utm_medium=ingest?utm_source=intl&amp;utm_medium=ingest"> cease-fire on their trade battle </a> over the weekend, pausing expectations for proposed tariff escalations between the world's largest economies.

The Dow Jones Industrial Average jumped 1.6%, or more than 400 points. The Nasdaq Composite rose 1.4%, and the S&amp;P 500 was up 1.1%.

At a summit among leaders of the 20 industrialized nations in Argentina on Saturday, President Donald Trump and Chinese President Xi Jinping reached an agreement to at least temporarily put off plans to more than double the rate on a majority of tariffs against Beijing to 25% on January 1. With a 90-day deadline, market watchers are cautiously optimistic.

"This concludes only one battle so the trade war should linger on next year," said Mark McCormick, a strategist at TD Securities. "Still, positioning and valuation are critical factors that could see risk assets extend the rally into year-end.”

Early Monday, Trump said on Twitter that China would reduce duties on American cars. <a id="88cece19-79c0-3409-a59b-7d69049d2ecb" href="https://www.businessinsider.com/trump-china-reduce-tariffs-us-cars-auto-stocks-rally-2018-12?utm_source=intl&amp;utm_medium=ingest"> Automaker shares jumped </a> following the tweet, with Ford and General Motors both gaining close to 3%. European automakers BMW (+4.8%) and Daimler (+4.5%) also gained. Officials in Beijing didn’t immediately confirm or deny the assertion, <a id="4239848a-51f5-3958-a337-facda49e02c2" href="https://www.wsj.com/articles/trump-china-to-reduce-and-remove-tariffs-on-american-cars-1543811957?mod=article_inline"> the Wall Street Journal reports </a> .

Semiconductor companies that have the large sales exposure to China — including AMD (+7.5%), Nvidia (+5%) and NXP Semiconductors (+3.5%)—were also <a id="fc787d83-6863-3fa1-aba9-1c05a2fdad90" href="https://www.businessinsider.com/amd-stock-price-nvidia-chipmakers-rally-trump-xi-trade-truce-2018-12?utm_source=intl&amp;utm_medium=ingest"> sharply higher </a> following the detente.

Oil prices rallied more than 5% after shedding nearly a quarter in value last month, with <a id="8d91bb86-50e0-3f4d-a6a2-692bd7d5a089" href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=intl&amp;utm_medium=ingest"> West Texas Intermediate </a> trading around $53.30 per barrel and <a id="9ea58116-c58d-3972-a5d7-5c1e2214248f" href="https://markets.businessinsider.com/commodities/oil-price?utm_source=intl&amp;utm_medium=ingest"> Brent </a> just under $62. Saudi Arabia, OPEC's de facto leader, and Russia agreed over the weekend to cut coordinated production levels at a broader meeting among major producers this Thursday and Friday.

John Stoltzfus, chief investment strategist at Oppenheimer Asset Management expects a resolution between the US and China would be conducive to an extended rally in oil prices — albeit not too much above the levels seen prior to the decline that began in October.

“However, the deeper into the 90 days of the truce period talks between the US and China run without resolution, the less likely we believe that a significant rally in oil prices can persist,” he said.

Wall Street followed rallies in markets around the globe. Across the Atlantic, automakers helped lift the Stoxx 600 1.3%. In Asia, the Shanghai Composite gained more than 2.5% and the Nikkei 225 was up 1%.

Also over the weekend, former President George H.W. Bush <a id="202b41c8-bc0b-37f6-a2ca-5ad8252149df" href="https://www.businessinsider.com/george-hw-bush-dead-obituary-2018-4?utm_source=intl&amp;utm_medium=ingest"> died at 94 </a> . The New York Stock Exchange and the Nasdaq will close Wednesday, which Trump has designated a <a id="6b303a2e-0ce4-351e-a4e1-5f33b351f346" href="https://www.businessinsider.com/nasdaq-new-york-stock-exchange-to-close-in-honor-of-george-hw-bush-2018-12?utm_source=markets&amp;utm_medium=ingest?utm_source=intl&amp;utm_medium=ingest"> national day of mourning </a> for the 41st president.

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SEE ALSO: Global markets are ripping higher after Trump and Xi's trade-war agreement

The Dow rallies more than 400 points after Trump and Xi reach trade war cease-fire

After becoming the world's largest oil producer this year, US influence in the energy market has continued to grow.

US production rose to a record high of 11.475 million barrels per day in September, the <a id="bed4ad38-9618-33b9-a25f-e8681e40bc58" href="https://www.eia.gov/petroleum/production/"> Energy Information Administration </a> said Friday. That's about 20% higher than output over the same period in 2017 and the second largest year-over-year gain.

Technology like hydraulic fracking has helped put the US on its way to becoming a net energy exporter for the first time since the 1950's. Within the next five years, it is expected to ship more petroleum than it imports as rising output meets slowing domestic demand.

Record output levels, however, come at an uncertain time in the global energy market. Prices of <a id="8d91bb86-50e0-3f4d-a6a2-692bd7d5a089" href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=intl&amp;utm_medium=ingest"> West Texas Intermediate </a> , the US benchmark, have fallen by more than a quarter to near $50 a barrel over the past three months, the <a id="c9b173e7-2d02-317d-a97d-c9ddff5292b5" href="https://www.businessinsider.com/oil-is-taking-a-hit-after-us-inventories-gain-while-putin-says-prices-are-absolutely-fine-2018-11?utm_source=intl&amp;utm_medium=ingest"> lowest since October 2017 </a> .

OPEC and other major producers are considering coordinated output restrictions to stem a further drop in prices. Additionally, analysts at JPMorgan expect US production growth to slow over the next two years.

"This should help with a limited recovery in oil prices from current level," they said.

"However, this recovery is unlikely to last as structurally demand should slow in 2019-20 based on our economists' projection for GDP and low cost non-OPEC supply growth should put a cap on oil prices in the absence of any large scale geopolitical disruption."

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The US is becoming a force to be reckoned with in the oil market

At a summit among leaders of the 20 industrialized nations in Argentina on Saturday, President Donald Trump and China’s Xi Jinping reached an agreement to at least temporarily put off plans to more than double the rate on a majority of tariffs against Beijing to 25% on January 1. With a 90-day deadline, market watchers are cautiously optimistic.

Stocks fell Thursday amid concerns about escalating trade tensions, a day after Federal Reserve comments received as dovish helped the Dow rally by the most in eight months.

The Dow Jones Industrial Average fell 0.11%, and the Nasdaq Composite shed 0.25%. The S&amp;P 500 was down 0.22%. The three major US indices had risen for a third straight session Wednesday after Federal Reserve Chairman Jerome Powell said rates were "just below" the neutral level.

"Markets were cheered by Powell's dovish remarks, but trade dispute rhetoric between the US and China ahead of this weekend's G20 summit is keeping a lid on investor enthusiasm," said Vincent Heaney, a strategist at UBS.

Minutes from the Federal Reserve’s latest policy meeting <a id="e2b440e6-c842-30ca-a175-2dda8c4262e7" href="https://www.federalreserve.gov/monetarypolicy/files/fomcminutes20181108.pdf"> out Thursday </a> pointed to a December rate increase, but left the path for next year open. Market watchers have been closely monitoring for signs of whether recent equity turbulence or ongoing trade tensions could influence the Federal Reserve's rate path.

Yields on the 10-year note fell 1.6 basis points to 3.028% following the minutes, and the <a id="75430f48-f1f8-34ff-a08f-feb9f21ae258" href="https://markets.businessinsider.com/index/us-dollar-index?utm_source=intl&amp;utm_medium=ingest"> dollar </a> rose slightly against a basket of peers.

President Donald Trump and China's Xi Jinping are expected to meet at the G20 summit in Argentina this weekend. Trump has offered conflicting remarks about negotiations in recent days, however, stirring fears that more tariffs could be put in place between world's largest economies.

"I think we're very close to doing something with China but I don't know that I want to do it,” he told reporters Thursday, referring to a potential deal to ease tensions first reported by <a id="8dcb0436-8be3-3009-a586-c1a12556e788" href="https://www.wsj.com/articles/u-s-china-exploring-deal-to-ease-trade-tensions-1543508589?mod=hp_lead_pos1"> The Wall Street Journal </a> .

Not helping the mood, <a id="bf6c67cd-fa2a-367b-ab38-d4d6801645ce" href="https://www.reuters.com/article/us-usa-trade-china-navarro-idUSKCN1NY24E"> Reuters reported </a> Thursday afternoon that White House trade adviser Peter Navarro, a vocal critic of China who is seen as a policy hardliner, is expected to attend the Trump-Xi meeting.

On the commodities front, oil rose 3% after Russia signaled it could cut production. With West Texas Intermediate trading below $50 a barrel at session lows and Brent around $60, however, prices are still deep in bear territory. OPEC and other major producers are set to discuss coordinated output levels at a meeting next week.

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Stocks snap their 3-day winning streak as attention turns to the Trump-Xi meeting

Corporate credit levels and quality are top risks to the economy but the outlook remains solid and rates are "just below" a neutral level, Federal Reserve Chair Jerome Powell said Wednesday.

A Federal Reserve report out earlier Wednesday showed some American businesses have the most debt in two decades. Still, officials "see no major asset class where valuations appear far in excess of standard benchmarks," Powell said in his speech at the Economic Club of New York.

The Federal Open Market Committee is forecasting continued growth, low unemployment, and inflation near 2%, he said, adding there is "a great deal to like" about the outlook.

Market watchers were closely monitoring the speech for signs of whether recent turbulence in equity markets or ongoing trade tensions could influence the Federal Reserve’s rate path.

“Chairman Powell describing rates as 'just below' neutral is a welcome change from the ‘long way’ from neutral he conveyed in October,” said Adam Ozimek, an economist at Moody’s. “While this change in rhetoric is relatively minor, it reinforces what other FOMC members have been saying recently. These comments tilt the odds just slightly in favor of fewer hikes in 2019.”

The Fed is expected to increase its benchmark interest rate at a December meeting, but the outlook for next year is up in the air. Officials have hiked three times this year, bringing the target range to between 2% and 2.25% in September, and eight times since 2015.

Stocks have suffered a bruising couple of months, with the three major US indexes wiping out their 2018 gains in November. Perhaps most troubling, high-flying technology stocks that led the latest bull run have been at the center of recent sell-offs. Meanwhile, ongoing trade tensions have cast uncertainty on the outlook for economic growth.

President Donald Trump has directly blamed the Fed for trouble on Wall Street, calling increasing rates "ridiculous." There is a consensus among economists and bipartisan lawmakers, however, that increasing the cost of borrowing can be necessary to avoid high levels of inflation.

On Tuesday, Richard Clarida, the Fed’s second in command, said it's "especially important" to pay attention to new economic data as monetary policy approaches a neutral stance. The central bank is set to release meeting minutes from its latest policy meeting on Thursday.

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Powell says rates are 'just below' a neutral level, flags rising corporate debt as a risk

Stocks surged Wednesday after Federal Reserve Chairman Jerome Powell gave a speech that was received as more dovish than expected, lifting Wall Street to its best day in months after a series of bruising sell-offs in October and November.

The Dow Jones Industrial Average jumped 2.5%, or more than 600 points, marking its best day since March. The Nasdaq Composite gained 212 points, or 3%, and the S&amp;P 500 was up 61 points, or 2.3%.

Powell said Wednesday that corporate credit levels and quality <a href="https://markets.businessinsider.com/news/stocks/federal-reserve-system-powell-says-rates-just-below-neutral-level-2018-11-1027764481?utm_source=intl&amp;utm_medium=ingest" id="4f12180c-d558-35b2-a06a-c4c634cbf13d"> are top risks to the economy </a> , but the outlook remains solid, and rates are "just below" a neutral level.

"These comments tilt the odds just slightly in favor of fewer hikes in 2019," said Adam Ozimek, an economist at Moody’s. "This is good news given that the economy is adding jobs quickly alongside a lack of accelerating inflation."

Market watchers will continue to monitor for signs of whether recent turbulence in equity markets or ongoing trade tensions could influence the Federal Reserve's rate path in meeting minutes out Thursday.

Treasury yields, which can point to market expectations for interest rates, fell following Powell's speech. The 10-year shed 1.3 basis points to 3.046%, and the 2-year was down 2.6 basis points to 2.805%.

Trade-sensitive stocks, including <a href="https://markets.businessinsider.com/stocks/ba-stock?utm_source=intl&amp;utm_medium=ingest" id="cf93a697-3887-3e80-a9d5-d0028eacbf9e"> Boeing </a> (up $15, or 4.8%) and <a href="https://markets.businessinsider.com/stocks/cat-stock?utm_source=intl&amp;utm_medium=ingest" id="5dc05eb7-0629-394e-a317-b1f6503406ef"> Caterpillar </a> (up $6, or 5%), led the Dow higher. President Donald Trump and Chinese President Xi Jinping are expected to meet at the G20 in Argentina on Saturday, with tariff escalations between the world’s largest economies on the line.

On Tuesday, The New York Times <a href="https://www.nytimes.com/2018/11/27/us/politics/trump-xi-trade-g-20.html?action=click&amp;module=Top%20Stories&amp;pgtype=Homepage" id="14396c2c-61c1-370c-a0eb-35022d9a1f43"> reported </a> that Trump is worried about the long-term effects his trade policies could have on the market and the economy. Still, the president told The Wall Street Journal this week that he expects to increase tariff rates on Chinese imports in January.

Oil plunged more than 3% after the US <a href="https://www.eia.gov/dnav/pet/PET_STOC_WSTK_DCU_NUS_W.htm" id="78fe708e-3270-31eb-a40e-673e96d21d77"> said </a> in a report that stockpiles climbed for a 10th straight week. Prices plunged deeper into bear territory, with <a href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=intl&amp;utm_medium=ingest" id="8d91bb86-50e0-3f4d-a6a2-692bd7d5a089"> West Texas Intermediate </a> trading around $50.50 per barrel and <a href="https://www.cnbc.com/quotes/?symbol=@LCO.1" id="ed4f89b7-88c6-3c20-a685-eb3f26a3c006"> Brent </a> below $59. OPEC and other major producers are expected to discuss coordinated output levels at a meeting next week.

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SEE ALSO: Powell says rates are 'just below' a neutral level, flags rising corporate debt as a risk

The Dow rallies, jumps more than 600 points in best session since March after Fed chairman speech

Stocks turned mostly positive Tuesday, recovering from earlier losses after President Donald Trump said he expects protectionist policies between the world's largest economies to increase.

The Dow Jones Industrial Average rose 0.4% after falling as many as 225 points. The Nasdaq Composite closed mostly flat following sharp losses, and the S&amp;P 500 also recovered to trade up 0.3%.

"Markets could remain volatile ahead of pivotal developments later this week, including minutes from the Federal Reserve and a meeting between the US and Chinese presidents," said Vincent Heaney, a strategist at UBS.

White House economic adviser Larry Kudlow said Tuesday afternoon that a meeting between Trump and Chinese President Xi Jinping at the G20 meeting in Argentina this weekend could "turn the page" on the trade war.

On Monday, however, Trump <a id="b1e2e4f8-e5ca-37ad-a9c5-1143495a148f" href="https://www.wsj.com/articles/trump-expects-to-move-ahead-with-boost-on-china-tariffs-1543266545"> told the Wall Street Journal </a> he expects to move forward with a proposal to more than double the tariff rate from 10% to 25% on $200 billion worth of Chinese imports in January.

He also said if negotiations between Washington and Beijing don't go well, his administration could place duties on the remainder of shipments from China to the US. Apple, whose products could be included in that tranche, slid as much as 1.5% before paring losses to close down 0.19% at $174.28 a share.

Signs of whether trade tensions or recent market turbulence could influence the Federal Reserve’s rate path will be closely watched for in meeting minutes out Thursday. Tuesday morning, Fed Vice Chair Richard Clarida said it’s <a id="fe3e27c2-8deb-3d4d-a7c3-95b30de9c4b8" href="https://www.businessinsider.com/feds-clarida-backs-gradual-rate-hikes-says-watch-data-2018-11?utm_source=intl&amp;utm_medium=ingest"> "especially important" </a> to pay attention to new economic data as monetary policy approaches a neutral stance.

The <a id="75430f48-f1f8-34ff-a08f-feb9f21ae258" href="https://markets.businessinsider.com/index/us-dollar-index?utm_source=intl&amp;utm_medium=ingest"> dollar </a> climbed against a basket of peers following the comment, and Treasury yields fell. Home price gains were the weakest in nearly two years in September, rising 5.5% compared with 5.7% a year earlier, the S&amp;P CoreLogic Case-Shiller National Home Price Index showed early Tuesday.

Major US shopping days around the Thanksgiving holiday failed to offer much relief, even to retailers that brought in a record number of sales this year. <a id="172a468b-14b9-39f8-a90d-07e2db81550c" href="https://markets.businessinsider.com/stocks/amzn-stock?utm_source=intl&amp;utm_medium=ingest"> Amazon </a> was mostly flat after the e-commerce giant said the most products in <a id="ff20d37c-805f-3623-ac10-b50498a84664" href="https://www.businessinsider.com/amazon-cyber-monday-black-friday-2018-biggest-shoppings-days-ever-2018-11?utm_source=intl&amp;utm_medium=ingest"> its history </a> were ordered on Black Friday and Cyber Monday. The <a id="186477de-5c48-3c00-ac2d-e7bee98ce394" href="https://markets.businessinsider.com/etfs/spdr-s&amp;p-retail-etf?utm_source=intl&amp;utm_medium=ingest"> SPDR S&amp;P Retail ETF </a> was up 0.3%.

Oil prices were slightly higher, with <a id="8d91bb86-50e0-3f4d-a6a2-692bd7d5a089" href="https://markets.businessinsider.com/commodities/oil-price?type=wti?utm_source=intl&amp;utm_medium=ingest"> West Texas Intermediate </a> trading just below $52 per barrel and <a id="9ea58116-c58d-3972-a5d7-5c1e2214248f" href="https://markets.businessinsider.com/commodities/oil-price?utm_source=intl&amp;utm_medium=ingest"> Brent </a> around $61 a barrel. Prices are still deep in a bear market, having shed more than a quarter of their value over the past three months. OPEC and other major producers led by Russia are set to discuss coordinated production cuts next week.

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SEE ALSO: Bank of America's $2.8 trillion wealth management CIO reveals his biggest market fear, which he warns could trigger the next recession if left unchecked

Stocks recover amid hope for US-China trade talks

As President Donald Trump maintains protectionist policies with global trading partners, an increasing number of farms in the Midwest are struggling to stay afloat.

At least 84 farm operations in Minnesota, Montana, North and South Dakota, and parts of northwestern Wisconsin filed for bankruptcy in the 12 months ending in June, according to a new analysis from the Minneapolis Federal Reserve, more than twice the level seen over the same period in 2014.

The strain of low commodity prices on farmers and ranchers has been compounded by tariffs, Ron Wirtz, regional director for the central bank, said <a id="6abb8bee-2d9a-38ce-a74f-e26dd6cf0a39" href="https://www.minneapolisfed.org/publications/fedgazette/chapter-12-bankruptcies-on-the-rise-in-the-ninth-district"> in the report </a> . Trump has placed tariffs on more than $300 billion worth of imports to date and threatened his policies could further escalate on multiple fronts.

As countries retaliate against the Trump administration with duties on American goods, key commodity prices have fallen sharply. <a id="cd63fe14-7d43-305f-a5eb-aa4276671f2a" href="https://markets.businessinsider.com/commodities/soybeans-price?utm_source=intl&amp;utm_medium=ingest"> Soybeans </a> , for example, have shed nearly a fifth of their value since April. <a id="4a064f3c-085d-33c1-a87a-de0b7fdb1ec6" href="https://www.nytimes.com/2018/11/05/business/soybeans-farmers-trade-war.html"> The New York Times reported </a> this month that exports of the legume to China fell 94% through mid-October from a year earlier.

Farming margins have been "squeezed for some time, so the tariffs are certainly just more problems on top of a list of continuing problems," said Kevin McNew, chief economist at Farmers Business Network.

States where bankruptcies are on the rise are especially vulnerable to trade tensions with China, McNew said, which placed retaliatory duties on American soybeans earlier this year. While growers in other parts of the country have other foreign markets to turn to, the upper Midwest is highly dependent on soybean trade with China.

And in Wisconsin, where about 60% of all farm bankruptcies were filed, there are more small-sized farms that tend to be particularly vulnerable to price changes.

Falling prices have also exerted pressure on farming finances throughout the rest of the Midwest, with more than half of respondents in a Kansas City Federal Reserve survey reporting lower farm income than a year ago.

Trump is expected to meet with Chinese President Xi Jinping on Saturday as the leaders attend the G20 summit in Argentina. But the president and his administration, asserting tariffs will pressure other countries to change trade practices seen as unfair, have cast doubt on negotiations in recent days.

Uncertainty has weighed on farmers' outlooks for the rest of the year and beyond. In Missouri and Nebraska, more than 70% of survey respondents anticipated incomes would continue to fall throughout the next three months.

"I would say we're on the start of something and not the end of something," McNew said. "There's just nothing on the horizon that really suggests things are going to get better."

Poor farming conditions could pose risks to Trump and his party in the next election, even in reliably red states. Gregory Wawro, a political science professor at Columbia University, noted that while voters in rural regions have become increasingly Republican over the past few election cycles, retrospective economic voting is an important factor in presidential voting decisions.

"Evidence indicates that, perhaps surprisingly, voters base their vote less on their personal economic experience than on their perceptions of the performance of the national economy," he said. "

But if regional economies are suffering and voters trace this to tariff policies, I would not be at all surprised to see voters in those regions to be less inclined to support Trump's reelection bid."

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SEE ALSO: The government is raking in billions of dollars from Trump's tariffs. Americans are the ones paying.

Farm bankruptcies are surging as Trump's trade war drags on

Stocks jumped Monday, staging a comeback following a series of sell-offs that had wiped out Wall Street’s 2018 gains last week, as investors waded back into the market on the biggest online-shopping day of the year.

The Dow Jones Industrial Average rose 1.4%, or more than 350 points. The S&amp;P 500 climbed 1.5% and out of correction territory, while the Nasdaq Composite gained more than 2%. The three major US indices had fallen sharply in recent months on the back of a cocktail of concerns, including the prospect of cooling demand and rising rates.

“Whether the volatility of the last eight weeks will be followed by a market bounce, or a deeper pullback, will largely depend on the development of political risk, central bank policy, and incoming economic data,” said Mark Haefele, chief investment officer at UBS.

Retail stocks rallied as investors found optimism from Cyber Monday and Black Friday, which were expected to result in <a id="16d2c6e4-9e3d-3654-a7e3-8fe31dbbb9ed" href="https://www.businessinsider.com/cyber-monday-2018-predicted-biggest-online-shopping-day-us-history-2018-11?utm_source=intl&amp;utm_medium=ingest"> historic sales numbers </a> , with the SPDR S&amp;P Retail ETF climbing 1.9%.

Gina Heeb

Articles written by the author

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