Dow dropped 43, decliners slightly ahead of advancers & NAZ declined 29. The MLP index was off 1+ to 247. Junk bond funds inched higher & Treasuries were in demand once again. Oil sank 2+ to the 51s (more below) & gold rose 5 to 1336.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Foxconn said that it planned to make servers, networking products & automotive central controls at its factory in Wisconsin. The plant, which is not operational yet, was originally focused on next-generation LCD displays for televisions & other similar products. The announcement, which was made at Foxconn's first-ever investor day, underscores the controversy at the $10B Wisconsin plant, which is heavily subsidized by gov programs in exchange for creating 13K jobs. Some Wisconsin residents believe that the state is paying too much for Foxconn's factory. The announcement also shows how one of the world’s top electronics manufacturers, which assembles products for top technology companies, is dealing with the possibility of increasing tariffs that would make goods imported from China significantly more expensive. A Foxconn official previously said last month that the Wisconsin plant will make a “variety of products for multiple vertical industries.” “It’s not limited to one product, so we will do commercial TVs up to 65 inches,” Jay Lee, the vice chairman of the board of directors of Foxconn Industrial Internet, said. “The multiple liquid crystal display sizes that we can produce are applicable in a variety of industries from automotive to education to entertainment to health care to medicine to security in smart city applications,” he continued. At Foxconn’s investor day, the company also said that it had enough production capacity outside of China to help Apple (AAPL), a Dow & NAZ stock, if the US-China trade war were to affect the iPhone
Foxconn says it won’t just make TVs in Wisconsin but will also build servers and ot…
The US ran a $208B deficit in May, a jump of 41% from a year ago, the Treasury Dept said. Most of the jump can be explained by Jun 1 occurring on a weekend, which forced some federal payments into May. Excluding those calendar adjustments, the deficit still would have increased by 8%, with spending up by 6% & revenue up by 4%. In May, the net interest on the public debt surged 34% because the Treasury Dept had to factor in the adjustment on principal for inflation-protected securities. That won’t be an issue in future months as the total inflation adjustment is actually smaller this year than last, the Congressional Budget Office (CBO) noted. What will recur are growing payments for Medicare, Social Security & defense. Medicare spending surged 73% — mostly because of the timing shift, though it would have rose 18% otherwise. Social Security benefits rose by 11% & defense spending rose 23%. Revenue rose 7% mostly due to a rise in individual & payroll taxes, driven by rising employment, wages & hours worked. The Treasury Dept notes that since Mar, the individual income tax numbers are comparable because similar withholding formulas have been in place. Customs duties, tariffs, mostly, jumped 62% to $5B. The US has increased tariffs on $200B of Chinese goods to 25% & is threatening to levy that same rate on over $300B more if trade negotiations between Pres Trump & Chinese Pres Xi Jinping are not successful. The US might record a T$ deficit this fiscal year (or it'll be close) according to the CBO — as the spending increase is met by stagnant revenue growth. Financial markets, far from worrying about the fiscal condition, are making it cheaper & cheaper for the gov to finance this spending. The yield on the 10-year Treasury has dropped from as high as 3.23% in Nov to just 2.13%.
Home sales have lagged expectations so far this year, but one indicator suggests the housing market may be set for a rebound. Housing confidence and sentiment about buying and selling are pointing to a more balanced market & an economic backdrop that supports homeownership, according to the Pulsenomics Housing Confidence Index. Pulsenomics is an independent research firm that specializes in real estate data analytics. The firm polls economists, analysts & strategists on their expectations for prices in the future. For overall housing sentiment, the company surveys thousands of ordinary American households. Confidence, as measured by the Composite 20 index of the largest metro areas, hit a 5-year high of 71.65 in Q1. Any index reading over 50 signals improvement. Q1 also represented what is called “a healthy meeting of the minds” between would-be buyers & sellers. The economy — wage growth, specifically — has finally improved enough to make consumers confident about homeownership, even as media attention on the flagging housing market last year gave hope to some wannabe buyers. Lower mortgage rates since the start of 2019 are also helping. Meanwhile, more & more homeowners are finally realizing that now might be an okay time to sell. Sales of previously-owned homes have fallen in 3 out of 4 months this year, although new-home sales are running about 7% higher than last year’s pace while, home prices accelerated in Apr for the first time in a year.
Oil prices logged the lowest finish since Jan as US crude supplies climbed a 2nd week in a row & concerns about energy demand persisted on the back of growing US-China trade tensions. West Texas Intermediate crude for Jul fell $2.13 (4%) to settle at $51.14 a barrel. That was the lowest front-month contract finish since Jan 14. Aug Brent crude lost $2.32 (3.7%) to $59.97 a barrel, the lowest front-month finish since Jan.28. Both benchmarks had ended roughly flat yesterday. The Energy Information Administration reported that US crude supplies climbed by 2.2M barrels last week, a 2nd weekly gain in a row. The forecast called for a modest increase of 80K barrels. The American Petroleum Institute on yesterday reported a nearly 4.9M-barrel rise. The EIA estimated a 100K barrel-per-day decline in total US crude production last week, to 12.3M barrels a day, though output remains in record territory. In its Short-term Energy Outlook report released yesterday, the EIA reduced its forecasts for this year’s oil prices & for US crude-oil production in 2019 & 2020. The EIA forecasts 2019 domestic crude production of 12.3M barrels a day, down 1% from the May forecast. Monthly oil reports from OPEC & the IEA will be released tomorrow & Fri, respectively. The IEA's report will include forecasts for 2020. Trade tensions continue to be a major concern, linked to a potential slowdown in energy demand growth. Pres Trump today said he’s got “a feeling” the US & China will reach a trade deal, but held out the possibility of more tariffs on Chinese goods without one. The market also awaits a decision by OPEC & its allies on whether to extend their production-cut deal past the end of this month, when it expires.
The stock market took a breather, well deserved after its run this month. The bulls are feeling good. But they will need help from favorable news stories to extend this run. Safe haven gold & Treasuries continue to be purchased.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Foxconn said that it planned to make servers, networking products & automotive central controls at its factory in Wisconsin. The plant, which is not operational yet, was originally focused on next-generation LCD displays for televisions & other similar products. The announcement, which was made at Foxconn's first-ever investor day, underscores the controversy at the $10B Wisconsin plant, which is heavily subsidized by gov programs in exchange for creating 13K jobs. Some Wisconsin residents believe that the state is paying too much for Foxconn's factory. The announcement also shows how one of the world’s top electronics manufacturers, which assembles products for top technology companies, is dealing with the possibility of increasing tariffs that would make goods imported from China significantly more expensive. A Foxconn official previously said last month that the Wisconsin plant will make a “variety of products for multiple vertical industries.” “It’s not limited to one product, so we will do commercial TVs up to 65 inches,” Jay Lee, the vice chairman of the board of directors of Foxconn Industrial Internet, said. “The multiple liquid crystal display sizes that we can produce are applicable in a variety of industries from automotive to education to entertainment to health care to medicine to security in smart city applications,” he continued. At Foxconn’s investor day, the company also said that it had enough production capacity outside of China to help Apple (AAPL), a Dow & NAZ stock, if the US-China trade war were to affect the iPhone
Foxconn says it won’t just make TVs in Wisconsin but will also build servers and ot…
The US ran a $208B deficit in May, a jump of 41% from a year ago, the Treasury Dept said. Most of the jump can be explained by Jun 1 occurring on a weekend, which forced some federal payments into May. Excluding those calendar adjustments, the deficit still would have increased by 8%, with spending up by 6% & revenue up by 4%. In May, the net interest on the public debt surged 34% because the Treasury Dept had to factor in the adjustment on principal for inflation-protected securities. That won’t be an issue in future months as the total inflation adjustment is actually smaller this year than last, the Congressional Budget Office (CBO) noted. What will recur are growing payments for Medicare, Social Security & defense. Medicare spending surged 73% — mostly because of the timing shift, though it would have rose 18% otherwise. Social Security benefits rose by 11% & defense spending rose 23%. Revenue rose 7% mostly due to a rise in individual & payroll taxes, driven by rising employment, wages & hours worked. The Treasury Dept notes that since Mar, the individual income tax numbers are comparable because similar withholding formulas have been in place. Customs duties, tariffs, mostly, jumped 62% to $5B. The US has increased tariffs on $200B of Chinese goods to 25% & is threatening to levy that same rate on over $300B more if trade negotiations between Pres Trump & Chinese Pres Xi Jinping are not successful. The US might record a T$ deficit this fiscal year (or it'll be close) according to the CBO — as the spending increase is met by stagnant revenue growth. Financial markets, far from worrying about the fiscal condition, are making it cheaper & cheaper for the gov to finance this spending. The yield on the 10-year Treasury has dropped from as high as 3.23% in Nov to just 2.13%.
U.S. budget deficit widens to $208 billion in May
Home sales have lagged expectations so far this year, but one indicator suggests the housing market may be set for a rebound. Housing confidence and sentiment about buying and selling are pointing to a more balanced market & an economic backdrop that supports homeownership, according to the Pulsenomics Housing Confidence Index. Pulsenomics is an independent research firm that specializes in real estate data analytics. The firm polls economists, analysts & strategists on their expectations for prices in the future. For overall housing sentiment, the company surveys thousands of ordinary American households. Confidence, as measured by the Composite 20 index of the largest metro areas, hit a 5-year high of 71.65 in Q1. Any index reading over 50 signals improvement. Q1 also represented what is called “a healthy meeting of the minds” between would-be buyers & sellers. The economy — wage growth, specifically — has finally improved enough to make consumers confident about homeownership, even as media attention on the flagging housing market last year gave hope to some wannabe buyers. Lower mortgage rates since the start of 2019 are also helping. Meanwhile, more & more homeowners are finally realizing that now might be an okay time to sell. Sales of previously-owned homes have fallen in 3 out of 4 months this year, although new-home sales are running about 7% higher than last year’s pace while, home prices accelerated in Apr for the first time in a year.
Housing market sentiment hits a 5-year high: a good omen for sales?
Oil prices logged the lowest finish since Jan as US crude supplies climbed a 2nd week in a row & concerns about energy demand persisted on the back of growing US-China trade tensions. West Texas Intermediate crude for Jul fell $2.13 (4%) to settle at $51.14 a barrel. That was the lowest front-month contract finish since Jan 14. Aug Brent crude lost $2.32 (3.7%) to $59.97 a barrel, the lowest front-month finish since Jan.28. Both benchmarks had ended roughly flat yesterday. The Energy Information Administration reported that US crude supplies climbed by 2.2M barrels last week, a 2nd weekly gain in a row. The forecast called for a modest increase of 80K barrels. The American Petroleum Institute on yesterday reported a nearly 4.9M-barrel rise. The EIA estimated a 100K barrel-per-day decline in total US crude production last week, to 12.3M barrels a day, though output remains in record territory. In its Short-term Energy Outlook report released yesterday, the EIA reduced its forecasts for this year’s oil prices & for US crude-oil production in 2019 & 2020. The EIA forecasts 2019 domestic crude production of 12.3M barrels a day, down 1% from the May forecast. Monthly oil reports from OPEC & the IEA will be released tomorrow & Fri, respectively. The IEA's report will include forecasts for 2020. Trade tensions continue to be a major concern, linked to a potential slowdown in energy demand growth. Pres Trump today said he’s got “a feeling” the US & China will reach a trade deal, but held out the possibility of more tariffs on Chinese goods without one. The market also awaits a decision by OPEC & its allies on whether to extend their production-cut deal past the end of this month, when it expires.
Oil prices settle at roughly 5-month low as data show U.S. supplies climbing
The stock market took a breather, well deserved after its run this month. The bulls are feeling good. But they will need help from favorable news stories to extend this run. Safe haven gold & Treasuries continue to be purchased.
Dow Jones Industrials
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