Dow went slid back 13, decliners over advancers 4-3 & NAZ added 21. The MLP index went up 1+ to the 272s & the REIT index was fractionally lower to the 349s. Junk bond funds inched higher & Treasuries continued to be sold, taking the yield on the 10 year Treasury up a very big 7 basis points to 2.96%. Oil slid lower to the 67s (more below) & gold dropped 6 to 1224.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.17236399986518913)
Shares of Halliburton (HAL) fell sharply as investors grew worried about demand for the company's oilfields services slowing down in the Permian Basin, a key region for the company. HAL said some of its customers are reducing activity & lowering their rig count as production in West Texas & New Mexico outpaces the capacity at which crude oil can be transported out of the region, creating bottlenecks in the supply chain. The bottlenecks have pushed the price of regional crude to a steep discount to benchmark US oil & are threatening to dampen demand for oilfield services & equipment. Despite the demand concerns surrounding the Permian Basin, HAL still sees future profitability in the area. "Tightness is an indicator of a great resource, and what is occurring in the Permian today is not new. In some ways, we're a victim of our own success, as we develop longer laterals with better production. As a result, we expect this area to have temporary softness in the back half of 2018, but it's poised to regain activity as a calendar turns to 2019 and additional pipeline capacity is available." CEO Jeffrey Miller said. "We will manage through the year-end and be ready for the increased activity next year. I expect that these temporary efficiency drags will create headwinds for additional upward pricing in the third quarter. Our competitors' new and uncontacted equipment is also creating pricing pressure in some areas. We will continue our efforts to optimize pricing and utilization, pursue continued technology implantation and control cost to maintain our industry-leading returns." Miller added. HAL met expectations for EPS of 58¢. The company, however, beat revenue expectations, generating $6.147B compared with the $6.112B that was estimated. Revenue also rose 24% to $6.15B in its 2nd qtr compared to last year. The stock sank 3.66 (8%).
If you would like to learn more about HAL, click on this link:
club.ino.com/trend/analysis/stock/HAL?a_aid=CD3289&a_bid=6ae5b6f7
Halliburton on track for worst day in four years on lower anticipated demand for oilfield services
US oil prices settled lower, giving up earlier gains as the market played down the impact of rising tensions between the US & Iran. Sep WTI oil on its first full session as a front-month contract, settled at $67.89, down 37¢ (0.5%) for the session, after tapping a high of $69.31.
The finance ministers & central bankers of the G-20 group of countries ended their meeting here with little progress on resolving global trade tensions sparked by Pres Trump's tariffs, with the US & EU both insisting their conditions for trade talks must be met. Treasury Secretary Steve Mnuchin got the ball rolling Sat morning when he told reporters that the US is ready to start talks on trade agreements with China, the EU & the Japanese, but that those trading partners must first level the playing field by removing tariffs, non-tariff trade barriers & subsidies. Mnuchin specifically mentioned that US companies shouldn't be forced into joint ventures with Chinese companies to do business in China nor be forced to transfer technology. He upped the ante by adding that “it’s definitely a realistic possibility” Trump will follow through on a threat to impose tariffs on all $500B worth of goods the US imports from China each year. The US has already set levies on $34B of machinery & components from the Asian country, with tariffs on another $16B of imports scheduled. The Trump administration also is looking at targeting an additional $200B of Chinese products.
Stocks were back to stumbling along, waiting for more earnings reports. Little was accomplished today. On Jan 26, the Dow reached its record, 26,616. Then it pulled back to the 24-45K area in early Feb where it has remained. The US economy is doing fairly well, but a lack or progress on trade discussion have been a damper on bringing more buyers to the stock market (shown below). Until these uncertainties go away, many investors will be afraid to commit which will limit further advances in stock prices.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
White House economic advisers are spreading the
word that Q2 GDP, out on Fri, may surpass 4% - the first
time growth has hit or exceeded that number since Q3-2014. Ahead of the
data, Trump administration officials are preparing a major victory lap & plan to use the strong data points as proof that the president’s
economic policies of lower taxes & deregulation have reversed years of
economic malaise that followed the financial crisis & Pres Obama's fiscal agenda. Of course if the numbers fail to meet
expectations, the White House will be deprived of a powerful talking
point administration officials plan to use to reverse the negative
publicity following Trump's meeting with Russian Pres
Putin, as well as the ongoing investigation into Russian campaign
meddling. But
Trump & his economic team are increasingly convinced the GDP numbers
will be strong; his economic advisers are privately telling
associates that GDP growth should rise to 4.3-4.4% for Q2. Pres Trump is even more
optimistic, telling one associate he expects Q2 GDP to rise
to as much as 4.8%. If
GDP does surpass 4% on a quarterly basis it will be the first time it
has done so since 2014, when it registered 5.2%
during Obama's 2nd term in office. Even so, economic advisers in the
Trump administration, such as Larry Kudlow, have blamed Obama's policies
of higher taxes & enhanced regulations for the relatively feeble
economic growth during his 8 years in office, where GDP never grew
above 3% on a yearly basis. Trump hasn't been bashful about touting the
progress of the economy under his watch, in which unemployment has
fallen to 4%, near an 18-year low. He even raised eyebrows tweeting
about the jobs data shortly before the May report was released. The
tweet jolted the financial markets & the $ rose as traders
prepared for the official report, which in turn was strong, showing that
US employers added 223K workers & unemployment dipped to 3.8%. Still,
as the White House prepares to tout GDP as evidence of the
administration's economic prowess & progress, some business leaders & economists have expressed doubts that certain fiscal policies, as
they relate to trade, may be problematic & soon endanger growth.
US economic growth nears 5%; time to celebrate?
Shares of Halliburton (HAL) fell sharply as investors grew worried about demand for the company's oilfields services slowing down in the Permian Basin, a key region for the company. HAL said some of its customers are reducing activity & lowering their rig count as production in West Texas & New Mexico outpaces the capacity at which crude oil can be transported out of the region, creating bottlenecks in the supply chain. The bottlenecks have pushed the price of regional crude to a steep discount to benchmark US oil & are threatening to dampen demand for oilfield services & equipment. Despite the demand concerns surrounding the Permian Basin, HAL still sees future profitability in the area. "Tightness is an indicator of a great resource, and what is occurring in the Permian today is not new. In some ways, we're a victim of our own success, as we develop longer laterals with better production. As a result, we expect this area to have temporary softness in the back half of 2018, but it's poised to regain activity as a calendar turns to 2019 and additional pipeline capacity is available." CEO Jeffrey Miller said. "We will manage through the year-end and be ready for the increased activity next year. I expect that these temporary efficiency drags will create headwinds for additional upward pricing in the third quarter. Our competitors' new and uncontacted equipment is also creating pricing pressure in some areas. We will continue our efforts to optimize pricing and utilization, pursue continued technology implantation and control cost to maintain our industry-leading returns." Miller added. HAL met expectations for EPS of 58¢. The company, however, beat revenue expectations, generating $6.147B compared with the $6.112B that was estimated. Revenue also rose 24% to $6.15B in its 2nd qtr compared to last year. The stock sank 3.66 (8%).
If you would like to learn more about HAL, click on this link:
club.ino.com/trend/analysis/stock/HAL?a_aid=CD3289&a_bid=6ae5b6f7
Halliburton on track for worst day in four years on lower anticipated demand for oilfield services
US oil prices settled lower, giving up earlier gains as the market played down the impact of rising tensions between the US & Iran. Sep WTI oil on its first full session as a front-month contract, settled at $67.89, down 37¢ (0.5%) for the session, after tapping a high of $69.31.
U.S. oil prices give up earlier gains to settle with a loss
The finance ministers & central bankers of the G-20 group of countries ended their meeting here with little progress on resolving global trade tensions sparked by Pres Trump's tariffs, with the US & EU both insisting their conditions for trade talks must be met. Treasury Secretary Steve Mnuchin got the ball rolling Sat morning when he told reporters that the US is ready to start talks on trade agreements with China, the EU & the Japanese, but that those trading partners must first level the playing field by removing tariffs, non-tariff trade barriers & subsidies. Mnuchin specifically mentioned that US companies shouldn't be forced into joint ventures with Chinese companies to do business in China nor be forced to transfer technology. He upped the ante by adding that “it’s definitely a realistic possibility” Trump will follow through on a threat to impose tariffs on all $500B worth of goods the US imports from China each year. The US has already set levies on $34B of machinery & components from the Asian country, with tariffs on another $16B of imports scheduled. The Trump administration also is looking at targeting an additional $200B of Chinese products.
G-20 makes little headway on settling global trade tensions sparked by U.S. tariffs
Stocks were back to stumbling along, waiting for more earnings reports. Little was accomplished today. On Jan 26, the Dow reached its record, 26,616. Then it pulled back to the 24-45K area in early Feb where it has remained. The US economy is doing fairly well, but a lack or progress on trade discussion have been a damper on bringing more buyers to the stock market (shown below). Until these uncertainties go away, many investors will be afraid to commit which will limit further advances in stock prices.
Dow Jones Industrials
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