Dow was off 3, decliners ahead of advancers 5-4 & NAZ fell 18. The MLP index pulled back 1+ to the 257s. Junk bond funds were mixed. & Treasuries attracted buyers today. Oil dropped to 62 (more below) & gold went up 6 to 1337.
AMJ (Alerian MLP Index tracking fund)
US stocks trade cautiously as consumer prices edge higher
White House acting chief of staff Mick Mulvaney thinks efforts to strike an infrastructure deal with congressional Dems are probably “done” after talks blew up last month. Still, he said that Pres Trump & House Speaker Nancy Pelosi will have to cooperate on pressing issues in the coming months, from passing a budget to approving trade agreements. “But we will have to work with them on the spending matter. So there’s a bunch of stuff we’ll do. It’s just the infrastructure,” Mulvaney said The White House official also said “we’re trying to work with” Dems on passing the US-Mexico-Canada Agreement (USMCA). Pelosi & members of her caucus have showed skepticism about ratifying Trump's replacement for NAFTA amid concerns about how it would affect labor & environmental protections, as well as pharmaceutical prices.
Trump and Pelosi can still work together, but an infrastructure deal is likely dead, Mulvaney says
US consumer prices barely rise; underlying inflation muted
Oil falls over 2% on weaker demand growth, gain in US crude stocks
The Jun rally is taking a rest today. There is no dramatic new news & longer term problems with trade remain. The Dow has had a healthy advance after a rough time in May. However, demand is still strong for gold & Treasuries.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 52.15 | -1.12 | -2.1% |
| GC=F | Gold | 1,336.20 | +5.00 | +0.4% |
Stocks traded cautiously, the day after the Dow snapped a 6-day winning streak. The consumer price index edged up 0.1% in May,
the cost of food was offset by cheaper gasoline, the gov said. The CPI gained 0.3% in Apr. In the 12
months thru May, the CPI increased 1.8%, slowing from Apr's
1.9% gain. The forecast called for an increase of 0.1%. Core CPI nudged up 0.1% for the 4th straight month. Oil
prices fell more than 2%, weighed down by a weaker
outlook for demand & a rise in US crude inventories despite
expectations of extended supply cuts led by OPEC. In Asia, China's Shanghai Composite fell 0.6%. Hong Kong's Hang Seng dropped 1.7% & Japan's Nikkei ended
the day off 0.4%. In
Europe, Britain's FTSE 100 was down 0.6%, France's CAC 40 fell
0.6% & Germany's DAX was lower by 0.3%.
US stocks trade cautiously as consumer prices edge higher
White House acting chief of staff Mick Mulvaney thinks efforts to strike an infrastructure deal with congressional Dems are probably “done” after talks blew up last month. Still, he said that Pres Trump & House Speaker Nancy Pelosi will have to cooperate on pressing issues in the coming months, from passing a budget to approving trade agreements. “But we will have to work with them on the spending matter. So there’s a bunch of stuff we’ll do. It’s just the infrastructure,” Mulvaney said The White House official also said “we’re trying to work with” Dems on passing the US-Mexico-Canada Agreement (USMCA). Pelosi & members of her caucus have showed skepticism about ratifying Trump's replacement for NAFTA amid concerns about how it would affect labor & environmental protections, as well as pharmaceutical prices.
Trump and Pelosi can still work together, but an infrastructure deal is likely dead, Mulvaney says
US consumer prices barely rose in May, pointing
to moderate inflation that together with a slowing economy could
increase pressure on the Federal Reserve to cut interest rates this
year. The report from the Labor Dept, however,
showed some pockets of inflation, with rents & healthcare costs rising
solidly, which could buy the central bank some time before easing
monetary policy. Fed
policymakers are scheduled to meet on Jun 18-19 against the backdrop
of rising trade tensions, slowing growth & a sharp step-down in hiring
in May that has led financial markets to price in at least 2 interest
rate cuts by the end of 2019. Fed Chairman Jerome Powell said
last week that the central bank was closely monitoring the implications
of the trade war on the economy & would “act as appropriate to
sustain the expansion.” A rate cut is not expected next week. The consumer price index edged up 0.1% last month as a rebound in the
cost of food was offset by cheaper gasoline after the
CPI gained 0.3% in Apr. In the 12 months thru May, the CPI
increased 1.8%, slowing from Apr's 1.9% gain. The forecast was for the CPI to rise 0.1% in May & 1.9%
year-on-year. Excluding the volatile food & energy components,
the CPI nudged up 0.1% for the 4th straight month. Core
CPI was held down by a sharp decline in the prices of used cars &
trucks as well as motor vehicle insurance. In the 12 months thru May, core CPI rose 2.0% after advancing 2.1% in Apr. The $ dropped sharply against a basket of currencies after the
release of the data while Treasury yields fell. Stock index
futures pared losses slightly. A
report yesterday showing core producer prices advancing solidly for a 2nd consecutive month in May had offered hope for a firmer core CPI
reading in May, as well as in the inflation measure tracked by the Fed
for monetary policy. The Fed's preferred inflation measure, the
core personal consumption expenditures (PCE) price index, increased 1.6% in the year to Apr after gaining 1.5% in Mar. Data for May
will be released later this month. The core PCE price index has been
running below the Fed's 2% target this year.
US consumer prices barely rise; underlying inflation muted
Oil prices fell almost 2%, weighed
down by a weaker outlook for demand & a rise in US crude inventories
despite expectations of extended supply cuts led by OPEC. Brent
crude futures, the intl benchmark for oil prices, were down
$1.17 (1.9%) at $61.12 a barrel & West Texas
Intermediate crude futures were down $1.13 (2.1%) at $52.14. The Energy Information Administration (EIA)
cut its forecasts for 2019 world oil demand growth & US crude
production yesterday. A surprise increase in US crude stockpiles also kept oil prices under pressure. US crude inventories
rose 4.9M barrels last week to 482.8M
barrels, data from the American Petroleum Institute (API) showed. That compared with expectations for a decrease of
481K barrels. Trade tensions between the
US & China also
weighed on prices. Pres Trump said he was holding up a
trade deal with China. European shares pulled
back from 3-week highs as this month's recovery rally
ran out of steam on the back of soft Chinese factory activity & trade
frictions. Hedge fund managers are liquidating bullish oil positions at the fastest rate since Q4. With
the next meeting of OPEC set for the end of Jun, the market is looking to whether the
world's major oil producers will prolong their supply cuts. OPEC,
along with non-members including Russia, have limited their oil output
by 1.2M barrels per day since the start of the year to prop up
prices.
Oil falls over 2% on weaker demand growth, gain in US crude stocks
The Jun rally is taking a rest today. There is no dramatic new news & longer term problems with trade remain. The Dow has had a healthy advance after a rough time in May. However, demand is still strong for gold & Treasuries.
Dow Jones Industrials
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