Dow gained 219, advancers over decliners better than 2-1 & NAZ jumped up 112. The MLP index was up 1+ to the 267s & the REIT index added 1+ to the 341s. Junk bond funds rose & Treasuries were sold, taking the yield on the 10 year Treasury up a big 7 basis points to 2.89%. Oil dropped 1+ to the 65s (more below) & gold gave back 7, falling to 1297.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.8887475436783909)
Crude futures fell, with the US benchmark posting a 2nd consecutive week of declines as American oil output comes close to matching that of top producer Russia. North Sea Brent crude's premium over West Texas Intermediate (WTI) futures remained near 3-year highs above $10 a barrel, having surpassed $11 on yesterday. The premium has doubled in less than a month, as a lack of pipeline capacity in the US has trapped a lot of output inland. WTI crude fell $1.23 (1.8%) to $65.81 a barrel. For the week, WTI was down 3%, adding to last week's near 5% decline & shrugging off a 3.6M-barrel drop in US crude stockpiles last week. Global benchmark Brent was down 81¢ (1%) at $76.75 per barrel. Brent was still set for an increase of 0.5% on the week. US crude production has been rising to record levels since late last year. In Mar it jumped 215K barrels per day (bpd) to 10.47M bpd, a new monthly record, the Energy Information Administration said. US energy companies added oil rigs for a 2nd week in a row, 2 oil rigs, bringing the total count to 861, the highest level since Mar 2015. Leakers have said that Saudi Arabia, the effective leader of OPEC, & Russia were discussing boosting output by about 1M bpd to compensate for losses in supply from Venezuela & to address concerns about the impact of US sanctions on Iranian output. This pushed Brent to a three-week low below $75 a barrel on Mon. Brent recovered later in the week, however, when a Gulf source flagged that any rise in production would be gradual. Russia would be able to raise its oil output within months to levels last seen before a global production-cutting deal took effect if there is a decision to unwind the pact, a Russian Energy Ministry official said.
US crude falls 3% on the week, settling at $65.81, amid US supply growth and OPEC uncertainty
Pres Trump said he will meet with Kim Jong Un in Singapore later this month after all, ending more than a week of uncertainty about whether direct denuclearization talks would go on. Key North Korean official Kim Yong Chol, who is sanctioned over the 2014 Sony cyberattack, talked to Trump in the Oval Office for more than an hour today & delivered a letter from North Korean dictator Kim Jon Un. In the letter, the head of the communist dictatorship was expected to show interest in meeting with Trump. Trump told reporters he does not expect the first meeting will lead to an agreement about Pyongyang dismantling its nuclear & missile programs. He said he sees a framework developing "over a period of time." "I think it'll be a process," he said following the meeting. "I never said it goes in one meeting. I think it's going to be a process." Secretary of State Mike Pompeo met with a North Korean delegation this week as the Trump administration discussed the possibility of holding the previously scapped meeting between Trump & Kim. On Thurs, Trump tweeted that his administration had "very good meetings with North Korea."
AMJ (Alerian MLP Index tracking fund)
Pres Trump's imposition of steel & aluminum
tariffs on Canada, Mexico & the EU infuriated
Congressional Reps & the key US allies, but according to his
chief economic adviser Larry Kudlow, it's merely a negotiating tactic to
secure free trade conditions. “When you have
these complicated trade negotiations, part of it -- and part of the
president's quiver -- is going to be tariffs, whether we like it or
not,” he said. “But he has to use them in order to achieve the goal of leveling
the playing field and bringing down these barriers.” The
White House announced yesterday that for the European trading bloc,
Canada & Mexico would end a 2-month exemption from the 25% steel & 10% aluminum tariffs announced in Mar. The tariffs went into
effect today, sparking intl concerns of a potential trade
war. But the director of the National Economic
Council, who declined to say whether tariffs would be finalized or not, said the pres is hoping to achieve “fairness and reciprocity.” “That
is the best way not only for an even playing field, but to create
economic growth,” Kudlow, a self-avowed free trade advocate, added.
“We’re just asking that these countries play ball with us.” In
a tweet, the pres lambasted Canada for treating the US
agricultural sector “very poorly for a very long period of time.” “Highly
restrictive on Trade!” Trump wrote. “They must open their markets and
take down their trade barriers! They report a really high surplus on
trade with us. Do Timber & Lumber in U.S.?”
Trump tariffs on US allies a negotiating tactic for free trade: Larry Kudlow
Already under fire for his combative trade
policies, Pres Trump intensified pressure on
Canada, demanding that America's neighbor & close ally "open their
markets and take down trade barriers." Trump's
tweet came a day after he ignited global condemnation by imposing
tariffs on steel & aluminum imports from Canada & 2 other key allies — the EU & Mexico. The
US had sought use the tariff threat as cudgel to win
concessions from Canada & Mexico in talks to renegotiate the North
American Free Trade Agreement. But the NAFTA talks sputtered anyway, &
the Trump administration imposed the tariffs at midnight last night. The
pres took to Twitter to accuse Canada of treating US
"farmers very poorly for a long period of time." And he repeated his
inaccurate claim that Canada runs a trade surplus with the US. In fact, the Commerce Dept numbers show, the US recorded a trade surplus with Canada for each of the past 3
years. Trump's
antagonistic trade policies, & specifically the steel & aluminum
tariffs, drew intl denunciation. French Pres Emmanuel
Macron said that he told Trump in a phone call that the new US
tariffs on European, Mexican & Canadian goods were illegal & a
"mistake." Macron pledged the retaliation would be "firm" & "proportionate," in line with World Trade Organization rules. Germany's Volkswagen, Europe's largest automaker, warned that the decision could start a trade war that no side would win. The EU & China said they will deepen ties on trade & investment as a result. "This
is stupid — it's counterproductive," Francis Maude, a former British
trade minister, said. "Any government that embarks on a
protectionist path inflicts the most damage on itself." Trump's
move makes good on his campaign vows to crack down on trading partners
that he claims exploit poorly negotiated trade agreements to run up big
trade surpluses with the US.
Trump takes aim at Canada as US protest his tariffs
Crude futures fell, with the US benchmark posting a 2nd consecutive week of declines as American oil output comes close to matching that of top producer Russia. North Sea Brent crude's premium over West Texas Intermediate (WTI) futures remained near 3-year highs above $10 a barrel, having surpassed $11 on yesterday. The premium has doubled in less than a month, as a lack of pipeline capacity in the US has trapped a lot of output inland. WTI crude fell $1.23 (1.8%) to $65.81 a barrel. For the week, WTI was down 3%, adding to last week's near 5% decline & shrugging off a 3.6M-barrel drop in US crude stockpiles last week. Global benchmark Brent was down 81¢ (1%) at $76.75 per barrel. Brent was still set for an increase of 0.5% on the week. US crude production has been rising to record levels since late last year. In Mar it jumped 215K barrels per day (bpd) to 10.47M bpd, a new monthly record, the Energy Information Administration said. US energy companies added oil rigs for a 2nd week in a row, 2 oil rigs, bringing the total count to 861, the highest level since Mar 2015. Leakers have said that Saudi Arabia, the effective leader of OPEC, & Russia were discussing boosting output by about 1M bpd to compensate for losses in supply from Venezuela & to address concerns about the impact of US sanctions on Iranian output. This pushed Brent to a three-week low below $75 a barrel on Mon. Brent recovered later in the week, however, when a Gulf source flagged that any rise in production would be gradual. Russia would be able to raise its oil output within months to levels last seen before a global production-cutting deal took effect if there is a decision to unwind the pact, a Russian Energy Ministry official said.
US crude falls 3% on the week, settling at $65.81, amid US supply growth and OPEC uncertainty
Pres Trump said he will meet with Kim Jong Un in Singapore later this month after all, ending more than a week of uncertainty about whether direct denuclearization talks would go on. Key North Korean official Kim Yong Chol, who is sanctioned over the 2014 Sony cyberattack, talked to Trump in the Oval Office for more than an hour today & delivered a letter from North Korean dictator Kim Jon Un. In the letter, the head of the communist dictatorship was expected to show interest in meeting with Trump. Trump told reporters he does not expect the first meeting will lead to an agreement about Pyongyang dismantling its nuclear & missile programs. He said he sees a framework developing "over a period of time." "I think it'll be a process," he said following the meeting. "I never said it goes in one meeting. I think it's going to be a process." Secretary of State Mike Pompeo met with a North Korean delegation this week as the Trump administration discussed the possibility of holding the previously scapped meeting between Trump & Kim. On Thurs, Trump tweeted that his administration had "very good meetings with North Korea."
Trump says June 12 summit with Kim Jong Un is back on
Minneapolis Fed Pres Neel Kashkari said there are still many Americans without jobs even though the unemployment rate fell to 3.8% in May, an 18-year low. "I still think there is some slack in the labor market," Kashkari said. He added the unemployment rate was misleading because it only counted people who are actively looking for work. Labor force participation data for workers aged 25-55 suggest there are 1M fewer prime-age workers in the labor force in 2018 than in 2006.
Fed's Kashkari says there is still some slack in the labor market
Stocks began the day with a strong advance & pretty much held those gains throughout the day. Next week the jobs report will fade & more attention will be paid to goings with trade negotiations. And that area looks to be depressing. Meanwhile the Dow keeps chugging along around 24.5K, unable to break away from that trend line.
Dow Jones Industrials
No comments:
Post a Comment