Dow rose 33, advancers over decliners better than 2-1 & NAZ went up 37. The MLP index gained 2 to the 248s. Junk bond funds crawled higher & Treasuries continued to be in demand. Oil jumped up 1+ to the 52s after an attack on 2 oil tankers in the Strait of Hormuz & gold added 2 to 1339.
AMJ (Alerian MLP Index tracking fund)
US stocks rise, oil surges on tanker attacks
OPEC cuts 2019 oil demand amid concerns about trade tensions
CEOs became less optimistic about the US economy as the Trump administration ratcheted up trade tensions with key partners, according to the latest Business Roundtable survey. The Business Roundtable’s CEO Economic Outlook Index fell by 5.7 points in Q2 to 89.5. It also marked the 5th straight qtr of declining optimism. Capital expenditure plans, CEO plans for hiring & expectations for sales also fell from the previous qtr. “Business leaders are ready and eager to invest and hire in the United States,” Joshua Bolten, CEO of the Business Roundtable, said. “Yet, the uncertainty over trade policy is making it more difficult for companies to invest and operate confidently.” Trade tensions have been rising since last year as the Trump administration tries to correct what it feels are unfair trade conditions between the US & other countries. Most noticeably, the US has gone after goods from China & Mexico, 2 key trade partners. Late last month, Pres Trump threatened to impose a 5% levy on all imports from Mexico that eventually could have escalated to 25%. Trump said last week the 2 countries struck a deal to avoid those tariffs that included Mexico curbing immigration into the US. But while US-Mexico trade tensions have been quelled for the moment, US-China trade fears remain. The US hiked tariffs on $200B worth of Chinese goods in May to 25% from 10%. & China retaliated by raising levies on $60 B worth of US imports. Concerns over tighter trade conditions & their impact on the global economy & corp profits led to a massive sell-off in May. The S&P 500 plunged more 6% last month. However the Business Roundtable said the CEO Economic Outlook Index remains above its historical average of 82.6. Hiring & capital investment plans are also above historical levels. The survey was also conducted May 16-Jun 3, which Bolten called “a turbulent few weeks for U.S. trade relations with China and Mexico.”
CEO optimism takes a hit in the second quarter as trade headwinds persist
US import prices post the largest drop in 5 months
The buyers are back & bidding up prices. However there is a lack of enthusiasm behind today's rise. Stocks are largely resting after the rally in early Jun as trade worries are getting more attention by investors. Demand for gold & Treasuries continues strong.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 52.59 | +1.45 | +2.8% |
| GC=F | Gold | 1,339.90 | +3.10 | +0.2% |
Reports that 2 oil tankers near the strategic Strait of Hormuz were attacked, has sent oil rising & is giving a boost to oil producers. One
of the tankers carried oil bound for Japan, whose Prime Minister Shinzo
Abe was wrapping up a high-stakes visit in Tehran that sought to ease
tensions between Iran & the US. A 3rd of all oil traded by sea passes through the strait, which is the narrow mouth of the Persian Gulf. Brent Crude prices rose as much as 4%, while US crude added 3% . This comes a day after oil plunged more than 4%, weighed
down by a weaker outlook for demand and a rise in US crude
inventories despite expectations of extended supply cuts led by OPEC. In Asia, China's Shanghai Composite
finished the day flat, rebounding from early losses. Hong Kong's Hang
Seng fell 1.8%, then rebounded for a tiny gain & Japan's Nikkei ended the day 0.3% higher. In Europe, Britain's FTSE 100 inched higher, France's CAC 40 was also up a tad & Germany's DAX rose 0.5%.
US stocks rise, oil surges on tanker attacks
OPEC slashed its outlook for oil consumption in 2019, blaming intl trade tensions for hurting demand for crude while also pointing to further challenges ahead. In
a monthly report, OPEC
said world oil demand will increase by close to 1.14M barrels
per day this year, 70K bpd less than initially expected. In Q1, demand increased by less than 1M barrels a day.
Output also fell in May, as a result of US sanctions on Iran. “Throughout the first half of this year, ongoing
global trade tensions have escalated, threatening to spill over, and
geo-political risks remained in many key regions,” the organization said
in the report. “This has resulted in a slowdown in global economic
activities, and weaker growth in global oil demand.” OPEC, Russia & other major producers implemented a deal in early Janu cut oil output by 1.2M bpd. The outlook comes ahead of OPEC's Jun
25-26 meeting, during which investors will be waiting to see whether the
world's major oil producers will prolong their supply cuts. Oil slid into a bear market last week, its 2nd of the year, with prices at one point falling as much as 5%, adding to May's 16% slump. A year-long trade spat
between the US & China has dragged on prices this year. But prices surged by almost 4% today after suspected attacks on 2 oil tankers in the Gulf of Oman. "We are aware of reports of an attack on ships in the Gulf of Oman,"
White House press secretary Sarah Sanders said. "The U.S.
Government is providing assistance and will continue to assess the
situation."
OPEC cuts 2019 oil demand amid concerns about trade tensions
CEOs became less optimistic about the US economy as the Trump administration ratcheted up trade tensions with key partners, according to the latest Business Roundtable survey. The Business Roundtable’s CEO Economic Outlook Index fell by 5.7 points in Q2 to 89.5. It also marked the 5th straight qtr of declining optimism. Capital expenditure plans, CEO plans for hiring & expectations for sales also fell from the previous qtr. “Business leaders are ready and eager to invest and hire in the United States,” Joshua Bolten, CEO of the Business Roundtable, said. “Yet, the uncertainty over trade policy is making it more difficult for companies to invest and operate confidently.” Trade tensions have been rising since last year as the Trump administration tries to correct what it feels are unfair trade conditions between the US & other countries. Most noticeably, the US has gone after goods from China & Mexico, 2 key trade partners. Late last month, Pres Trump threatened to impose a 5% levy on all imports from Mexico that eventually could have escalated to 25%. Trump said last week the 2 countries struck a deal to avoid those tariffs that included Mexico curbing immigration into the US. But while US-Mexico trade tensions have been quelled for the moment, US-China trade fears remain. The US hiked tariffs on $200B worth of Chinese goods in May to 25% from 10%. & China retaliated by raising levies on $60 B worth of US imports. Concerns over tighter trade conditions & their impact on the global economy & corp profits led to a massive sell-off in May. The S&P 500 plunged more 6% last month. However the Business Roundtable said the CEO Economic Outlook Index remains above its historical average of 82.6. Hiring & capital investment plans are also above historical levels. The survey was also conducted May 16-Jun 3, which Bolten called “a turbulent few weeks for U.S. trade relations with China and Mexico.”
CEO optimism takes a hit in the second quarter as trade headwinds persist
US import prices fell by the most in 5 months
in May amid a broad decline in the cost of goods, the latest indication
of muted inflation that strengthens the case for the Federal Reserve to
cut interest rates this year. The Labor Dept said import prices dropped 0.3% last month, the biggest decline
since last Dec. Data for Apr was revised down to show import
prices rising 0.1% instead of climbing 0.2% as previously reported. The forecast called for import prices slipping 0.2% in May. In
the 12 months thru May, import prices fell 1.5% after decreasing 0.3%
in Apr. The report came on the heels of data
showing consumer prices remained tame in May, supporting financial
market expectations that the Fed would cut rates this year. The
calls for an easing of monetary policy are being driven by a slowing
economy against the backdrop of worsening trade tensions between the
US & China. Pres Trump in early May imposed
additional tariffs of up to 25% on $200B of Chinese goods,
prompting retaliation by Beijing. Trump on Mon threatened further duties on Chinese imports if no
deal was reached when he meets Chinese Pres Xi Jinping at a G20
summit later this month in Japan. Import prices exclude duties. In
May, prices for imported fuels & lubricants declined 1.0% after
rising 1.7% in the prior month. Imported food prices dropped
0.8% last month after surging 2.7% in Apr. The report also showed export prices fell 0.2% in May after nudging up
0.1% in Apr. Export prices fell 0.7% on a year-on-year basis in May
after gaining 0.2% in Apr. Soybean prices tumbled 20.6% year-on-year.
US import prices post the largest drop in 5 months
The buyers are back & bidding up prices. However there is a lack of enthusiasm behind today's rise. Stocks are largely resting after the rally in early Jun as trade worries are getting more attention by investors. Demand for gold & Treasuries continues strong.
Dow Jones Industrials
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