Dow surged 320, advancers over decliners 2-1 & NAZ went up 67. The MLP index was fractionally higher to the 264s & the REIT index slid back 3+ to the 355s. Junk bond funds remained mixed & Treasuries were hit with selling pressure. Oil inched up to the 74s ( more below) & gold continued weak, adding all of 3 to 1259.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.17236399986518913)
ECB head Mario Draghi says that new trade barriers are the main risk to Europe's economy & that it's up to the EU to "lead by example" by supporting economic openness & reforming its institutions. Draghi told the European parliament that the bank had decided to phase out its €2.4T ($2.8T), 3-year stimulus program at year-end because inflation is finally trending in line with the ECB's goal of just under 2%. Along with that, economic growth has created 8.4M jobs since mid-2013. The risks now "mainly relate to the threat of increased protectionism," he added. Pres Trump has imposed tariffs on steel & aluminum imports & on a range of Chinese goods, leading to retaliation from China, the EU & others. Trump's moves have emphasized national interest & country-to-country deals, instead of putting trade issues in intl, rules-based frameworks such as the World Trade Organization. Draghi said that "a strong and united European Union can help reap the benefits of economic openness while protecting its citizens against unchecked globalization." "In leading by example, the EU can lend support to multilateralism and global trade, which have been cornerstones of growing economic prosperity over the past seven decades," he added. Draghi said that in order to accomplish that EU would have to strengthen its own institutions, including the setup of the 19-country euro currency. Draghi urged risk-sharing measures such as EU-level deposit insurance that would reassure depositors their savings would be safe even if their country ran into financial trouble. He said that sharing financial risk between eurozone countries could strengthen the system, which should ease the concerns of bigger, richer countries like Germany that they could be exposed to the weaknesses of poorer states. He cited the work of the US Federal Deposit Insurance Corp. With its backstop from the US federal gov, the FDIC could wind up 500 troubled banks without causing financial instability. The corresponding number of shaky banks purged from the system in the eurozone was 10 times lower, another reason the region's banking sector still faces difficulties.
British Prime Minister Theresa May said that preparations for a "no deal" Brexit would be stepped up & that Parliament should prepare for a number of different outcomes. The comments followed the abrupt resignation today of a key member of May's Cabinet, Foreign Secretary Boris Johnson. David Davis, the minister directly charged with handling Britain's exit from the EU, resigned hours before. May's critics seized on the dual departures to chastise May's handling of Brexit & to suggest that her gov is ill-suited to facilitate the complex disentanglement of 2 of the world's major economies. The £, which had erased its earlier gains against the $ following Johnson's resignation, fell further after May's Brexit comments. May & EU leaders have been reluctant to address the possibility of the EU & the UK failing to reach an agreement on Britain's departure from the EU. Failure to reach a deal could imperil the EU's budget, as well as the rights of citizens in the UK & EU to live & travel away from home. On Fri, May secured a victory over the fiercest euroskeptics in her Cabinet. May's gov signed off on a plan for a soft Brexit that would preserve many of the trade & regulatory ties between the EU & the UK. Today on Twitter, European Council President Donald Tusk said that, while politicians such as Johnson & Davis come & go, "the problems they have created for people remain." "I can only regret that the idea of #Brexit has not left with Davis and Johnson. But...who knows," he wrote.
British Prime Minister May says Parliament should prepare for several outcomes, including the possibility of no Brexit deal
The White House says Pres Trump "continues to look forward to" his meeting with British Prime Minister Theresa May this week despite the turmoil that Brexit is creating in her gov. May defended her plan for Britain's exit from the EU after British Foreign Secretary Boris Johnson & Brexit Secretary David Davis both resigned. White House spokeswoman Sarah
Huckabee Sanders said that "The President
continues to look forward to his working visit with the Prime Minister
on July 13, and further strengthening the U.S.-U.K. special
relationship." Trump will make his
maiden voyage to the UK as pres following a NATO summit in
Brussels & before heading to Helsinki for a summit with Russia's Putin.
US crude ended the session little changed after trading lower throughout much of the day on news about the timeline for the end of a major Canadian production outage. Meanwhile, global benchmark Brent gained on looming sanctions on Iran & falling production in Libya. West Texas Intermediate crude settled the day a nickel higher at $73.85 & Brent crude, the intl benchmark for oil, was up $1.06 (1.4%) at $78.17 a barrel. The US says it wants to reduce oil exports from Iran, the world's 5th-biggest producer, to zero by Nov, which would oblige other big producers to pump more. In Canada, majority stakeholder Suncor (SU) said that some Syncrude production would come back online in Jul, sooner than expected. It will not resume full operations until Sep, however, which is later than expected. The 360K-barrel-per-day (bpd) facility in northern Alberta has been shut since late Jun, cutting oil flows into Cushing, Oklahoma, the delivery point for US crude futures. Stocks in Cushing rose slightly between Tues & Fri, according to analysts who saw the data. Cushing inventories hit a 3½-year low last week. The market has grown concerned that if the Saudis offset the losses from Iran, it will leave oil markets at risk of further production declines in countries like Venezuela & Libya.
US crude ticks up 5 cents, settling at $73.85, pressured by potential end of Canadian crude outage
The stock market began the day strong & never looked back. The index is pushing on 25K once again but the good news behind the advance is limited. After Trump announces the Supreme Court nomination in a few hours, he'll be heading for Europe to meet with NATO, other euro leaders & Putin. That will make for a very busy trip. Even with numerous intl issues, higher tariffs will dominate discussions. The case for unbridled optimism is difficult to see. Uncertainty is riding high & that is not encouraging for a market rally. Earnings from the big banks will be announced later this week, followed by corp earnings next week. Hang on for a wild ride!
AMJ (Alerian MLP Index tracking fund)
German Chancellor Angela Merkel & Chinese Prime
Minister Li Keqiang stressed their commitment to a multilateral trade
system in the wake of Trump's decision to impose widespread
tariffs, saying it was to everyone's benefit. Speaking
in Berlin after the 2 countries signed deals worth €20B
($23.6B), Li told said the projects demonstrated how nations
could work together. In addition to multiple
joint cooperation projects between gov agencies, companies like
BASF, BMW, Volkswagen, Daimler, Siemens & Bosch announced deals &
partnerships. "Free trade plays a strong
leading role for both sides and for the world economy," Li said in the Berlin chancellery. On Fri, Pres Trump imposed 25% tariffs on $34B of Chinese goods in response to
complaints Beijing steals or pressuring companies to hand over
technology. China announced retaliatory tariffs on a similar amount of
US goods. Trump has also imposed tariffs on
aluminum & steel imports that include the EU & has
threatened additional tariffs on products like automobiles, singling out
Germany in particular. Bavaria-based automaker
BMW has already been caught in the middle of escalating trade strife
between the US & China, saying it would have to raise prices
on SUVs it builds in the US that it exports to China, after Beijing
raised the import tax on cars from the US to 40% from
15%. "We have a lot of direct investment in the United States of America, we have a lot of direct investment in China," Merkel said. "It
really is a multilateral interdependent system that at its best most
likely is really a plurilateral win-win situation when we stick to the
rules." She also applauded China for relaxing
rules on foreign investment, saying that it was important to see "the
market opening in China in this area is not only words, but is also
being followed by deeds." In one deal finalized
today, Chinese firm CATL announced that it would build a factory in
the German state of Thuringia to build batteries to supply to BMW for
use in electric cars. BMW said it had agreed to
purchase €4B worth of batteries, with €1.5B of
sales in Germany & 2.5B in China. Merkel said the company brings a product & technology to Germany that wasn't previously available. She added, however: "If we could do it ourselves, I'd also not be sad."
Germany, China lobby against US trade tariffs
ECB head Mario Draghi says that new trade barriers are the main risk to Europe's economy & that it's up to the EU to "lead by example" by supporting economic openness & reforming its institutions. Draghi told the European parliament that the bank had decided to phase out its €2.4T ($2.8T), 3-year stimulus program at year-end because inflation is finally trending in line with the ECB's goal of just under 2%. Along with that, economic growth has created 8.4M jobs since mid-2013. The risks now "mainly relate to the threat of increased protectionism," he added. Pres Trump has imposed tariffs on steel & aluminum imports & on a range of Chinese goods, leading to retaliation from China, the EU & others. Trump's moves have emphasized national interest & country-to-country deals, instead of putting trade issues in intl, rules-based frameworks such as the World Trade Organization. Draghi said that "a strong and united European Union can help reap the benefits of economic openness while protecting its citizens against unchecked globalization." "In leading by example, the EU can lend support to multilateralism and global trade, which have been cornerstones of growing economic prosperity over the past seven decades," he added. Draghi said that in order to accomplish that EU would have to strengthen its own institutions, including the setup of the 19-country euro currency. Draghi urged risk-sharing measures such as EU-level deposit insurance that would reassure depositors their savings would be safe even if their country ran into financial trouble. He said that sharing financial risk between eurozone countries could strengthen the system, which should ease the concerns of bigger, richer countries like Germany that they could be exposed to the weaknesses of poorer states. He cited the work of the US Federal Deposit Insurance Corp. With its backstop from the US federal gov, the FDIC could wind up 500 troubled banks without causing financial instability. The corresponding number of shaky banks purged from the system in the eurozone was 10 times lower, another reason the region's banking sector still faces difficulties.
ECB head Draghi: Trade protectionism is main risk to economy
British Prime Minister Theresa May said that preparations for a "no deal" Brexit would be stepped up & that Parliament should prepare for a number of different outcomes. The comments followed the abrupt resignation today of a key member of May's Cabinet, Foreign Secretary Boris Johnson. David Davis, the minister directly charged with handling Britain's exit from the EU, resigned hours before. May's critics seized on the dual departures to chastise May's handling of Brexit & to suggest that her gov is ill-suited to facilitate the complex disentanglement of 2 of the world's major economies. The £, which had erased its earlier gains against the $ following Johnson's resignation, fell further after May's Brexit comments. May & EU leaders have been reluctant to address the possibility of the EU & the UK failing to reach an agreement on Britain's departure from the EU. Failure to reach a deal could imperil the EU's budget, as well as the rights of citizens in the UK & EU to live & travel away from home. On Fri, May secured a victory over the fiercest euroskeptics in her Cabinet. May's gov signed off on a plan for a soft Brexit that would preserve many of the trade & regulatory ties between the EU & the UK. Today on Twitter, European Council President Donald Tusk said that, while politicians such as Johnson & Davis come & go, "the problems they have created for people remain." "I can only regret that the idea of #Brexit has not left with Davis and Johnson. But...who knows," he wrote.
British Prime Minister May says Parliament should prepare for several outcomes, including the possibility of no Brexit deal
The White House says Pres Trump "continues to look forward to" his meeting with British Prime Minister Theresa May this week despite the turmoil that Brexit is creating in her gov. May defended her plan for Britain's exit from the EU after British Foreign Secretary Boris Johnson & Brexit Secretary David Davis both resigned. White House spokeswoman Sarah
Huckabee Sanders said that "The President
continues to look forward to his working visit with the Prime Minister
on July 13, and further strengthening the U.S.-U.K. special
relationship." Trump will make his
maiden voyage to the UK as pres following a NATO summit in
Brussels & before heading to Helsinki for a summit with Russia's Putin.White House recommits to Trump-May meeting
US crude ended the session little changed after trading lower throughout much of the day on news about the timeline for the end of a major Canadian production outage. Meanwhile, global benchmark Brent gained on looming sanctions on Iran & falling production in Libya. West Texas Intermediate crude settled the day a nickel higher at $73.85 & Brent crude, the intl benchmark for oil, was up $1.06 (1.4%) at $78.17 a barrel. The US says it wants to reduce oil exports from Iran, the world's 5th-biggest producer, to zero by Nov, which would oblige other big producers to pump more. In Canada, majority stakeholder Suncor (SU) said that some Syncrude production would come back online in Jul, sooner than expected. It will not resume full operations until Sep, however, which is later than expected. The 360K-barrel-per-day (bpd) facility in northern Alberta has been shut since late Jun, cutting oil flows into Cushing, Oklahoma, the delivery point for US crude futures. Stocks in Cushing rose slightly between Tues & Fri, according to analysts who saw the data. Cushing inventories hit a 3½-year low last week. The market has grown concerned that if the Saudis offset the losses from Iran, it will leave oil markets at risk of further production declines in countries like Venezuela & Libya.
US crude ticks up 5 cents, settling at $73.85, pressured by potential end of Canadian crude outage
The stock market began the day strong & never looked back. The index is pushing on 25K once again but the good news behind the advance is limited. After Trump announces the Supreme Court nomination in a few hours, he'll be heading for Europe to meet with NATO, other euro leaders & Putin. That will make for a very busy trip. Even with numerous intl issues, higher tariffs will dominate discussions. The case for unbridled optimism is difficult to see. Uncertainty is riding high & that is not encouraging for a market rally. Earnings from the big banks will be announced later this week, followed by corp earnings next week. Hang on for a wild ride!
Dow Jones Industrials
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