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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).
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.
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.
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.
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: club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
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.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.40393489558702034)
...0.37 
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