December 19, 2019

“Gold prices edged higher on Thursday after the U.S. House of Representatives voted to impeach President Donald Trump, stoking fears of political uncertainty in the world’s largest economy. Spot gold was up 0.1% at $1,476.69 per ounce. U.S. gold futures edged up 0.1% to $1,480.70 per ounce. Trump became the third U.S. president to be impeached as the Democratic-led House formally charged him with abuse of power and obstruction of Congress in a step that will inflame partisan tensions.

Cautious sentiment supported bullion, often seen as an alternative investment during times of political and financial uncertainty. ‘The impeachment is resulting in a slight increase of the uncertainties and we’re seeing gold inch higher on the back of that,’ said ANZ analyst Daniel Hynes. ‘This news is also offsetting headwinds such as strong equity markets, the trade deal and better economic

data.’ Although the reaction to impeachment was muted, Asian shares pulled back from a one-and-a-half-year peak, while the U.S. dollar eased slightly against a basket of currencies, making gold cheaper for holders of other currencies. If the U.S. Senate convicts, ‘… then that throws next year’s election in a very uncertain place,’ Ilya Spivak, a senior currency strategist at DailyFx said.”

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KITCO NEWS/Neil Christensen

Gold prices up slightly following disappointing Philly Fed Survey data

December 19, 2019

Gold Prices“The gold market continues to spin its wheels, seeing only a little movement as U.S. regional manufacturing data disappoints expectations, according to the Philadelphia Federal Reserve. The Philly Fed said that its manufacturing business outlook dropped to a reading of 0.3 in December, down from November’s reading of 10.4 and significantly missing expectations; Consensus forecasts were calling for a reading around 8.1.  ‘The December Manufacturing Business Outlook Survey indicated essentially flat growth in the region’s manufacturing sector this month.

February gold futures last traded at $1,480.50 an ounce, up 0.12% on the day. Despite the weaker-than-expected data, the components of the report were relatively positive; the new orders index rose to 9.4, up from November’s reading of 8.4 … One major weak spot in the region’s manufacturing sector was the labor market. The report said that its number of employees index dropped to 17.8, down from November’s reading of 21.5. Some good news for gold prices, inflation pressure appears to be on the rise. The Prices paid index rose to 19, up from November’s reading of 7.8.”

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THE WALL STREET JOURNAL/Amara Omeokwe and Josh Mitchell

U.S. Existing Home Sales Decreased 1.7% in November

December 19, 2019

Housing Market“Sales of previously owned U.S. homes declined more than expected in November, the second drop in three months and a sign limited inventory is constraining would-be home buyers. Existing-home sales fell 1.7% in November to a seasonally adjusted annual rate of 5.35 million, the National Association of Realtors said. Economists a 0.4% decrease.  Sales were up 2.7% last month from November 2018, the fifth straight month of year-over-year gains. October sales were revised down to 5.44 million compared with an earlier estimate of 5.46 million.

A lack of sufficient housing inventory to meet buyer demand continues to be a limiting factor for the housing market, according to Jessica Lautz, the trade group’s vice president of demographics.

There was a 3.7 month-supply of homes on the market at the end of November, at the current sales pace … Inventory has been particularly limited for homes priced at the lower end, according to NAR. Sales of homes priced at $250,000 and below declined in November from the prior year, while sales priced $500,000 to $750,000 saw the strongest gains, rising 8.0% year-over-year.”

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BLOOMBERG/Daniel Alpert and Robert C. Hockett

The Jobs Market Isn’t as Healthy as It Seems

December 19, 2019

Unhealthy Job Market“A hallmark of the U.S. economy’s record expansion has been steady growth in employment. Judging from the jobless rate, in fact, the labor market is the best it’s been in half a century. But what is missing in the focus on the numbers is a troubling deterioration in the quality of jobs created. A close look at labor trends reveals that while the U.S. jobs market has expanded, the caliber of the positions created in the largest chunk of the workforce has steadily and significantly declined, leaving Americans working fewer hours on average, and in lower-paying positions. These changes to what we call job quality as distinguished from quantity — account for much that now ails the American economy and, as a consequence, society more broadly.”

“Increasingly, a greater share of job gains are occurring within the lowest quality job subsectors – in particular retail, leisure and hospitality, administrative, waste management, and health-care and social assistance services. While not all the positions in these subsectors are low quality, both the average job and the vast majority of the positions in these subsectors offer less than the mean weekly income of all U.S. P&NS jobs. In fact, the percentage of P&NS jobs created in just these four subsectors corresponds almost exactly to the percentage of goods-producing jobs lost in America from 1990 through today. We have, in other words, replaced most of our highest quality jobs not merely with lower quality jobs, but with lowest quality jobs.”

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CNN BUSINESS/Nathaniel Meyersohn

More than 9,300 stores closed in 2019

December 19, 2019

Stores Closing“2019 was another bruising year for many American retailers, despite healthy consumers and a strong economy. This year, US retailers announced 9,302 store closings, a 59% jump from 2018 and the highest number since Coresight Research began tracking the data in 2012. Bankruptcies in the retail sector intensified this year and many struggling chains cut stores. That led to a spike in closings.

Payless, Gymboree, Charlotte Russe and Shopko all filed for bankruptcy and closed a combined 3,720 stores, according to Coresight. The majority of those were because of Payless, which filed for its second bankruptcy in February and shuttered 2,100 US stores.  Discount chain Fred’s filed for bankruptcy in September and closed 564 stores. Forever 21 also filed for bankruptcy that month and said it will close up to 178 stores. Forever 21’s closures are not in Coresight’s report since they are not finalized. Other retailers, such as Ann Taylor parent Ascena Retail (ASNA), Family Dollar, GNC (GNC), Walgreens (WBA), Signet Jewelers (SIG), Victoria’s Secret and JCPenney (JCP), slashed their store footprints to save money and prop up higher-performing stores. Family Dollar closed 359 this year, while Signet, the parent company of mall stalwarts Kay, Jared and Zales, announced 159 closures.”

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YAHOO FINANCE/Sibile Marcellus

‘We squandered a major economic recovery’: Harvard professor

December 18, 2019

Squandered Economic Recovery“The nation wasted the major economic recovery, according to a new report by Harvard Business School on U.S. competitiveness.  ‘We had this wonderful recovery. It could have given us the chance to take some significant resources and devote them to some of our well-known challenges, like infrastructure or health care…none of that happened. Instead, we squandered a major economic recovery and didn’t use it to make things better,’ said Harvard Business School professor Michael Porter, a co-author of the study.

The business community’s role in politics has made a significant contribution to Washington’s dysfunction, according to HBS’s report. The majority of the business leaders surveyed said businesses’ overall engagement worsened the political system by advancing policies that benefited special interests.  The report lays out the different ways in which businesses engage in politics today. The $6 billion spent annually on lobbying is just one facet; others include spending on elections and ballot initiatives, efforts to influence employees’ votes and donations, and adding former government officials to companies’ payrolls. The overwhelming majority of business leaders surveyed in the report said lobbying primarily advanced company interests, sometimes at the expense of the public interest.”

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