The Consumer Electronics Show (CES) kicks off in Vegas with 175,000 belted geeks checking out the latest gadgets. One company from Spain unveiled a two-way car charger meaning your electric vehicle can now act like a power wall. At the close The Dow was off 119 at 28,583 on lighter trading volume. Tesla stock continued to hit highs and SpaceX had its first launch of the year last night sending 60 communications satellites into orbit.
Middle East tensions are affecting both gold and “black gold” aka oil. Gold has risen to a level not seen since January 2013 rising over $100 an ounce in the past couple weeks to a current high of $1,571. Prices of WTI crude oil also rose after the Baghdad hit to over $63 a barrel but pulled back last night after traders pulled hedges on the feeling that Iran will not mess with oil shipments in the Straits of Hormuz because to do so would not hurt the US and possibly provoke the Japanese and Chinese who are heavily dependent on Middle East oil from Kuwait and Saudi Arabia as well as LNG from Qatar. A couple of months ago Japan sent a warship to the area to help with US and British escort patrols and any action from Iran could bring negative response from nations other than the US. We will see how this plays out but caution is prudent.
The latest trade data is in and the US trade deficit continues to fall with the latest reading showing a drop of 8.2% which is the lowest reading in three years. US exports to China are up 13.7% while imports from China are down 9.2%. Brian Wesbury at First Trust noted that for the year (through November) imports from China are down 15.2% while imports from Vietnam, Taiwan and India are up 34.2%, 18.9% and 5.9% respectively. These figures show that global supply chains are shifting. The scoutmaster of Troop 100 works for a big California based tech firm and he mentioned to me before Christmas while we were working the tree lot that all of their supply chains had moved out of China during 2019 to Malaysia and India. He said they still sell to China but no longer produce product in China.