Dow gained 67, advancers over decliners around 5-4 & NAZ rose 24. The MLP index lost 1+ to the 255s (extending its longer term sideways trend) & the REIT index dropped 9+ to the 372s. Junk bond funds inched higher & Treasuries continued to be sold. Oil climbed back to the 64s & gold tumbled 12 to 1279 (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)
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Gold futures declined, with the precious metal suffering its lowest finish YTD, as equity benchmarks in the US flirted with records & gov bond yields advanced, reflecting growing appetite for assets perceived as risky over so-called havens. The yellow metal may have also suffered from additional pressure after a report said that Venezuela recently sold $400M in gold, in a potential move to offset US sanctions on the country. Gold for Jun delivery on Comex fell $14.10 (1.1%) to settle at $1277 an ounce. That was the lowest finish for a most-active contract since Dec 26. Meanwhile, the shift toward stocks comes as the Federal Reserve & other central bankers have adopted a more accommodative posture in monetary policy, highlighted by the US central bank suggesting that it was unlikely to lift interest rates in 2019. That stance has helped to push yields of benchmark gov debt higher, with the 10-year Treasury note yielding 2.59%. Rising yields can undercut demand for bullion because the commodity doesn't carry a coupon. That environment of lower rates has been supportive of stock buying & the Dow along with the S&P 500 & NAZ were all near all-time closing highs when gold futures settled.
Gold drops to lowest level of the year on climb in stocks and bond yields
Oil futures finished higher, with the US benchmark rebounding after a drop to a more than one-week low a day earlier, as investors awaited weekly petroleum data, which may reveal a 4th straight weekly rise in domestic crude inventories & declines in product supplies. US benchmark, West Texas Intermediate crude for May delivery rose 65¢ (1%) to settle at $64.05 a barrel. It also fell yesterday to finish at $63.40, the lowest for a most-active contract since Apr 5. Jun Brent crude the global benchmark, added 54¢ (0.8%) to $71.72 a barrel in Europe. Oil pulled back yesterday after Russia's finance minister reportedly questioned his country’s participation in a production-cut deal led by OPEC that’s been credited in part for a rally that's seen the US benchmark surge nearly 40% since the end of last year as Brent rose more than 30%. The deal is set to expire at the end of Jun & OPEC & its allies have scheduled their next official meeting for Jun 25-26. Renewed fighting in Libya has raised concerns about the durability of a pickup in oil exports by the country. Sanctions on Venezuela & approaching expiration of US waivers for importers of Iranian oil have also contributed to supply jitters. The EIA was forecast to report an increase of 1.8M barrels in crude stockpiles for the week ended Apr 12, according to estimates. Analysts also forecast declines of 2.5M barrels for gasoline & 1.6M barrels for distillates. Last week, the EIA reported a hefty 7M-barrel rise in crude inventories, but gasoline stocks had dropped by 7.7M barrels.
Oil ends higher as investors await inventory data
The National Association of Home Builders’ monthly confidence index rose one point to 63 in Apr, the trade group said. The one-point increase in Apr matched the Econoday consensus of the forecasts. Any reading over 50 signals improving conditions. The gauge of current sales conditions rose one point to 69, but the one that tracks expectations for the coming 6 months fell one point to 71. The sub-index that measures traffic of prospective buyers jumped 3 points to 47. The traffic component of this particular index has long been an outlier, only rarely rising above the neutral 50 line. Apr's increase was enough to make the reading a 6-month high, but that says more about the past 6 months than it does about the path forward for housing. The sentiment index tumbled 8 points in Nov, charting a bigger monthly decline than what was seen in the worst of the housing crisis a decade ago, as market headwinds finally caught up to builders. Since then, the index has clawed its way back, but the 2019 average of 61 still badly lags the 67 average throughout 2018. Still, many analysts remain optimistic about the housing market. Mortgage rates remain low, uncertainty around the 2017 tax law changes is receding, & macro conditions support homeownership for many more Americans. Builders have under-bult their investory in this business cycle, in stark contrast to the bubble years, so consumer demand remains robust. When the Commerce Dept reports on Mar new construction Fri, economists expect the pace of building to have picked up more than 5% for the month.
The popular stock averages keep climbing towards the records reached last Oct. However so far the early earnings reports & macro economic data have been undewhelming. The bulls are hoping for better news going forward.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
White House economic adviser Larry Kudlow said the
US is continuing to make good progress “on all the key points” in its
trade negotiations with China. “We
continue to make very good progress across the board,” he said. “These are the largest in scope
negotiations in U.S. China trade-relations history.” According to Kudlow, noteworthy progress has been
made on enforcement, intellectual property theft, & forced transfer of
technology, & tariff & non-tariff barriers for agriculture & industrial commodities. “Let’s just take this one day at a time,” he added. “We like what we see.” Top US & China trade officials are expected to resume talks this week.
UnitedHealth Group (UNH), a Dow stock, beat Q1 expectations & hiked its 2019 forecast, but shares of the nation's largest health
insurer continued their slump as investors worry about growing
Congressional scrutiny of how the company & its competitors do
business. CEO David Wichmann told said that some of the proposals
being discussed now could hurt doctor-patient relationships, destabilize
the health care system and produce costs big enough to hurt the
economy, all without improving care access. "The
path forward is to achieve universal coverage and it can be
substantially reached through existing public and private platforms,"
Wichmann said, referring to the system's current mix of commercial
coverage & gov funded programs like Medicare & Medicaid. Overall, EPS climbed to $3.73,
topping estimates by 13¢. Total revenue climbed about 9% to $60.31B. UNH expects 2019 adjusted EPS of $14.50-14.75, up from its previous forecast for $14.40-14.70. Analysts expect EPS of $14.65. The stock sank 9.24 (4%).
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UnitedHealth beats expectations all around, stock still lags
Gold futures declined, with the precious metal suffering its lowest finish YTD, as equity benchmarks in the US flirted with records & gov bond yields advanced, reflecting growing appetite for assets perceived as risky over so-called havens. The yellow metal may have also suffered from additional pressure after a report said that Venezuela recently sold $400M in gold, in a potential move to offset US sanctions on the country. Gold for Jun delivery on Comex fell $14.10 (1.1%) to settle at $1277 an ounce. That was the lowest finish for a most-active contract since Dec 26. Meanwhile, the shift toward stocks comes as the Federal Reserve & other central bankers have adopted a more accommodative posture in monetary policy, highlighted by the US central bank suggesting that it was unlikely to lift interest rates in 2019. That stance has helped to push yields of benchmark gov debt higher, with the 10-year Treasury note yielding 2.59%. Rising yields can undercut demand for bullion because the commodity doesn't carry a coupon. That environment of lower rates has been supportive of stock buying & the Dow along with the S&P 500 & NAZ were all near all-time closing highs when gold futures settled.
Gold drops to lowest level of the year on climb in stocks and bond yields
Oil futures finished higher, with the US benchmark rebounding after a drop to a more than one-week low a day earlier, as investors awaited weekly petroleum data, which may reveal a 4th straight weekly rise in domestic crude inventories & declines in product supplies. US benchmark, West Texas Intermediate crude for May delivery rose 65¢ (1%) to settle at $64.05 a barrel. It also fell yesterday to finish at $63.40, the lowest for a most-active contract since Apr 5. Jun Brent crude the global benchmark, added 54¢ (0.8%) to $71.72 a barrel in Europe. Oil pulled back yesterday after Russia's finance minister reportedly questioned his country’s participation in a production-cut deal led by OPEC that’s been credited in part for a rally that's seen the US benchmark surge nearly 40% since the end of last year as Brent rose more than 30%. The deal is set to expire at the end of Jun & OPEC & its allies have scheduled their next official meeting for Jun 25-26. Renewed fighting in Libya has raised concerns about the durability of a pickup in oil exports by the country. Sanctions on Venezuela & approaching expiration of US waivers for importers of Iranian oil have also contributed to supply jitters. The EIA was forecast to report an increase of 1.8M barrels in crude stockpiles for the week ended Apr 12, according to estimates. Analysts also forecast declines of 2.5M barrels for gasoline & 1.6M barrels for distillates. Last week, the EIA reported a hefty 7M-barrel rise in crude inventories, but gasoline stocks had dropped by 7.7M barrels.
Oil ends higher as investors await inventory data
The National Association of Home Builders’ monthly confidence index rose one point to 63 in Apr, the trade group said. The one-point increase in Apr matched the Econoday consensus of the forecasts. Any reading over 50 signals improving conditions. The gauge of current sales conditions rose one point to 69, but the one that tracks expectations for the coming 6 months fell one point to 71. The sub-index that measures traffic of prospective buyers jumped 3 points to 47. The traffic component of this particular index has long been an outlier, only rarely rising above the neutral 50 line. Apr's increase was enough to make the reading a 6-month high, but that says more about the past 6 months than it does about the path forward for housing. The sentiment index tumbled 8 points in Nov, charting a bigger monthly decline than what was seen in the worst of the housing crisis a decade ago, as market headwinds finally caught up to builders. Since then, the index has clawed its way back, but the 2019 average of 61 still badly lags the 67 average throughout 2018. Still, many analysts remain optimistic about the housing market. Mortgage rates remain low, uncertainty around the 2017 tax law changes is receding, & macro conditions support homeownership for many more Americans. Builders have under-bult their investory in this business cycle, in stark contrast to the bubble years, so consumer demand remains robust. When the Commerce Dept reports on Mar new construction Fri, economists expect the pace of building to have picked up more than 5% for the month.
Home-builder sentiment hits a 6-month high in April as the housing recovery takes hold
The popular stock averages keep climbing towards the records reached last Oct. However so far the early earnings reports & macro economic data have been undewhelming. The bulls are hoping for better news going forward.
Dow Jones Industrials
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