Friday, May 20, 2016

Markets end a 3 week losing streak

Dow gained 65, advancers over decliners better than 3-1 & NAZ rose 57.  The MLP index shot up 4+ to the 305s & the REIT index is still in the 333s.  Junk bond funds did little & Treasuries slid lower.  Oil edged lower & gold was off a tad (more on both below).

AMJ (Alerian MLP Index tracking fund)

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CLM16.NYM....Crude Oil Jun 16....47.79 Down ...0.37  (0.8%)

Live 24 hours gold chart [Kitco Inc.]

Gold fell for a 3rd straight week, the longest stretch of declines since Nov, amid speculation the Federal Reserve will raise interest rates next month.  Traders boosted bets that policy makers will raise interest rates, spurred by comments from Fed officials calling for at least 2 rate increases this year, & minutes of the last FOMC policy meeting in Apr suggesting a rate increase would be appropriate in Jun if the economy continued to improve.  Gold had rallied to a 15-month high earlier in May on expectations that the Fed would keep rates lower for longer amid risks to the global economy, adding to the appeal of owning non-interest-bearing assets.

Gold Extends Weekly Losing Run Amid ‘Hawkish’ Fed Commentary

Oil lost more ground after data from Baker Hughes showed that the number of active US rigs drilling for crude was unchanged after falling over the last 8 weeks.  The US oil-rig count stood at 318 as.  The total rig count fell 2 to 404.

Baker Hughes Says Weekly U.S. Oil-rig Count Is Unchanged

Oil scored a more than 3% gain for the week with production outages in Africa & Canada expected to help ease the glut of crude supplies.  Prices for the session, however, settled lower following news that exports from an eastern port in Libya were set to resume & data showing that the weekly number of active US oil rigs was unchanged. 

Oil Futures Gain More Than 3% For The Week

General Motors will spend $100M to reimburse customers who bought 2016 Chevrolet Traverse, GMC Acadia & Buick Enclave sport utility vehicles with overstated fuel economy figures, according to a leaker.  Fuel economy was overstated by 1-2 miles per gallon because the company failed to reflect new emissions-related hardware in calculations of efficiency for window stickers, according to a statement.  The 135K owners of the SUVs will receive a debit card or a 48-month, 60K-mile protection plan, GM said.  The company notified dealers today & will start sending letters to vehicle owners next week.  GM last Fri told dealers to stop selling the models because it had found the window-sticker errors, which it described as “inadvertent.”  Sales have since resumed.  Most lessees & buyers taking the cards will get $450-$900 in value & some will get as much as $1500, depending on lease terms & the amount of mileage overstated.  The stock rose 23¢.  If you would like to learn more about GM, click on this link:

GM Said to Pay $100 Million Over SUV Fuel-Economy Mistake

General Motors (GM)

While stocks were up, this was hardly a convincing rally.  Earnings are largely in & they did not tell a good story.  After a 6 week decline, bargain hunters were looking.  But their attitude was cautious.  The Dow finished down 100 from the highs in the AM.  Not encouraging for the bulls.

Dow Jones Industrials


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