Dow rose 175 (closing at the highs), advancers over decliners 3-2 & NAZ went up 83. The MLP index added 1 to the 251s & the REIT index lost 2 to the 262s. Junk bond funds rallied along with stocks & Treasuries were sold. Oil pulled back to the 54s & gold fell 4 to 1317 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Gold futures posted a 2nd straight session decline, in part as a leading $ index gained, though bullish analysts considered the metal's action to be only a pause in its recent uptrend. Apr gold fell $2.80 (0.2%) to settle at $1319 an ounce. Prices based on the most-active contracts, however, rose 1.9% last week. The ICE US $ index was up 0.3%, making commodities priced in the greenback less attractive to users of other currencies. And major stock indices traded higher as gold futures settled. Gold futures tallied a 2nd weekly climb in a row thru last Fri after the Federal Reserve hinted at a pause in interest-rate hikes. US employment data reinforced a picture of a solid labor market, but one that isn't likely to sway the Fed from its newfound “patient” policy stance, a development that helped to hand gold a solid 3% Jan gain, its 3th straight monthly advance.
Oil futures finished lower, after briefly touching their highest intraday levels of the year, with prices giving up some of the gains they scored last week as concerns over a potential slowdown in energy demand resurfaced. Demand concerns were reignited today following the release of surprisingly weak Chinese & US economic data. Those included the surprisingly soft Chinese General Services PMI for Jan released overnight, which showed the Composite level dip to 50.9 from 52.2 in Dec, barely holding expansion territory which was then followed up by a whiff in the delayed release of the US factory orders data from Nov, which pushed prices down to early lows. West Texas Intermediate crude oil for Mar delivery fell 70¢ (1.3%) to settle at $54.56 a barrel after tapping a high of $55.75. The contract settled up 2.7% to $55.26 a barrel Fri, with prices tracking the front-month contracts logging their highest finish since Nov. The month of Jan saw WTI crude rise 18.5% & 2.9% on the week. Apr Brent was off 24¢ (0.4%) to $62.51 a barrel after reaching a session peak of $63.63. It rose 3.1% to $62.75 a barrel Fri. Prices based on the front-month contract gained 15% in Jan & about 1.8% last week. The intraday highs for both crude benchmarks were the loftiest so far this year &, after posting hefty gains in Jan & climbing last week. Fundamental factors remain mostly supportive. Baker Hughes on Fri reported that the number of active US rigs drilling for oil fell by 15 to 847 this week. That more than offset the increase of 10 in the oil-rig count from a week earlier. And analysts were also optimistic that more Venezuela oil production will come off the market thanks to US sanctions. The Trump administration unveiled sanctions on Venezuela's state-owned oil firm Petróleos de Venezuela last week in an effort to cut off money to Pres Nicolás Maduro, days after opposition leader Juan Guaidó declared himself interim pres of the country. The political turmoil raises the risk of disruption to Venezuela’s oil output.
Rep Dan Kildee said that China's trade practices are the biggest threat to workers in his home state of Mich. “When China can produce cheap steel and dump it into global markets, that undermines the ability of our manufacturers to compete,” Kildee said. He added that US officials must reach an agreement with their Chinese counterparts that will ensure American workers can compete on an even playing field. “Those other factors are important, but they’re not going to be as important as getting trade right,” Kildee added. Pres Trump said he expects to meet with Chinese Pres Xi Jinping soon in an effort to iron out a trade deal between the 2 countries. The White House said in a statement that Mar 1 is a hard deadline to reach an agreement on trade, & will hike tariffs on Chinese goods the following day (as planned) if talks fail. The world's 2 largest economies agreed to a 90-day trade truce on the sidelines of the Group of 20 Summit in Argentina late last year. As the trade war progresses, China continues to face economic headwinds that include lackluster equity & auto markets. Auto sales in China fell 6% to 22.7M units last year, according to the China Passenger Car Association. US automakers have felt the strain of the less-than-rosy Chinese car market. Michigan, known for its auto manufacturing industry, is home to 3 of the largest American car manufacturers – known as the “Big Three” – & produced more than 2M cars & trucks at 11 different assembly lines within the state in 2017, according to data from the Detroit Chamber of Commerce. Automotive-related jobs grew more than 1% over the past 5 years & are expected to grow another 3% by 2022. Kildee said he supports Trump's decision to push back against Beijing due to the economic threat it poses, but hoped the administration would have taken a different, more strategic approach that would not negatively affect US allies. “I wish that it would’ve been done in a multilateral fashion because what we ended up doing is essentially penalizing Canada for China’s misdeeds,” the congressman said. “The president was not wrong to take on China when it comes to its dumping of steel.” But China isn’t the only threat to the American workforce. The advent of new technology, artificial intelligence (AI) in particular, could alter the structure of the US labor force & take away jobs in both blue collar & white collar industries.
Techs were strong all day, taking NAZ higher. The Dow was hit with selling in the first hour of trading. Then the bulls returned & took the Dow higher for the rest of the day. But there was little significant news for traders to digest. More earnings are coming later this week starting with Google (GOOGL) after the close. The Dow is up a staggering 3.4K since the Christmas eve low (shown below) with hardly a hiccup along the way. The volatility index (VIX) has plunged from a unusually higher level of 36 to 15 currently. During much of last year the VIX was near where it is today!! Investors again are embracing risk, except for the gold buyers.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Gold futures posted a 2nd straight session decline, in part as a leading $ index gained, though bullish analysts considered the metal's action to be only a pause in its recent uptrend. Apr gold fell $2.80 (0.2%) to settle at $1319 an ounce. Prices based on the most-active contracts, however, rose 1.9% last week. The ICE US $ index was up 0.3%, making commodities priced in the greenback less attractive to users of other currencies. And major stock indices traded higher as gold futures settled. Gold futures tallied a 2nd weekly climb in a row thru last Fri after the Federal Reserve hinted at a pause in interest-rate hikes. US employment data reinforced a picture of a solid labor market, but one that isn't likely to sway the Fed from its newfound “patient” policy stance, a development that helped to hand gold a solid 3% Jan gain, its 3th straight monthly advance.
Gold posts second loss in a row, but analysts see higher prices ahead
Oil futures finished lower, after briefly touching their highest intraday levels of the year, with prices giving up some of the gains they scored last week as concerns over a potential slowdown in energy demand resurfaced. Demand concerns were reignited today following the release of surprisingly weak Chinese & US economic data. Those included the surprisingly soft Chinese General Services PMI for Jan released overnight, which showed the Composite level dip to 50.9 from 52.2 in Dec, barely holding expansion territory which was then followed up by a whiff in the delayed release of the US factory orders data from Nov, which pushed prices down to early lows. West Texas Intermediate crude oil for Mar delivery fell 70¢ (1.3%) to settle at $54.56 a barrel after tapping a high of $55.75. The contract settled up 2.7% to $55.26 a barrel Fri, with prices tracking the front-month contracts logging their highest finish since Nov. The month of Jan saw WTI crude rise 18.5% & 2.9% on the week. Apr Brent was off 24¢ (0.4%) to $62.51 a barrel after reaching a session peak of $63.63. It rose 3.1% to $62.75 a barrel Fri. Prices based on the front-month contract gained 15% in Jan & about 1.8% last week. The intraday highs for both crude benchmarks were the loftiest so far this year &, after posting hefty gains in Jan & climbing last week. Fundamental factors remain mostly supportive. Baker Hughes on Fri reported that the number of active US rigs drilling for oil fell by 15 to 847 this week. That more than offset the increase of 10 in the oil-rig count from a week earlier. And analysts were also optimistic that more Venezuela oil production will come off the market thanks to US sanctions. The Trump administration unveiled sanctions on Venezuela's state-owned oil firm Petróleos de Venezuela last week in an effort to cut off money to Pres Nicolás Maduro, days after opposition leader Juan Guaidó declared himself interim pres of the country. The political turmoil raises the risk of disruption to Venezuela’s oil output.
Oil futures finish lower after touching highest intraday level of 2019
Rep Dan Kildee said that China's trade practices are the biggest threat to workers in his home state of Mich. “When China can produce cheap steel and dump it into global markets, that undermines the ability of our manufacturers to compete,” Kildee said. He added that US officials must reach an agreement with their Chinese counterparts that will ensure American workers can compete on an even playing field. “Those other factors are important, but they’re not going to be as important as getting trade right,” Kildee added. Pres Trump said he expects to meet with Chinese Pres Xi Jinping soon in an effort to iron out a trade deal between the 2 countries. The White House said in a statement that Mar 1 is a hard deadline to reach an agreement on trade, & will hike tariffs on Chinese goods the following day (as planned) if talks fail. The world's 2 largest economies agreed to a 90-day trade truce on the sidelines of the Group of 20 Summit in Argentina late last year. As the trade war progresses, China continues to face economic headwinds that include lackluster equity & auto markets. Auto sales in China fell 6% to 22.7M units last year, according to the China Passenger Car Association. US automakers have felt the strain of the less-than-rosy Chinese car market. Michigan, known for its auto manufacturing industry, is home to 3 of the largest American car manufacturers – known as the “Big Three” – & produced more than 2M cars & trucks at 11 different assembly lines within the state in 2017, according to data from the Detroit Chamber of Commerce. Automotive-related jobs grew more than 1% over the past 5 years & are expected to grow another 3% by 2022. Kildee said he supports Trump's decision to push back against Beijing due to the economic threat it poses, but hoped the administration would have taken a different, more strategic approach that would not negatively affect US allies. “I wish that it would’ve been done in a multilateral fashion because what we ended up doing is essentially penalizing Canada for China’s misdeeds,” the congressman said. “The president was not wrong to take on China when it comes to its dumping of steel.” But China isn’t the only threat to the American workforce. The advent of new technology, artificial intelligence (AI) in particular, could alter the structure of the US labor force & take away jobs in both blue collar & white collar industries.
China, artificial intelligence, among biggest threats to US workforce
Techs were strong all day, taking NAZ higher. The Dow was hit with selling in the first hour of trading. Then the bulls returned & took the Dow higher for the rest of the day. But there was little significant news for traders to digest. More earnings are coming later this week starting with Google (GOOGL) after the close. The Dow is up a staggering 3.4K since the Christmas eve low (shown below) with hardly a hiccup along the way. The volatility index (VIX) has plunged from a unusually higher level of 36 to 15 currently. During much of last year the VIX was near where it is today!! Investors again are embracing risk, except for the gold buyers.
Dow Jones Industrials
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