Dow gained 249 (near a record close), advancers over decliners 5-2 & the NAZ went up 64. The MLP index added 1+ to the 247s. Junk bond funds attracted buyers & Treasuries rose, bringing the yield on the 10 year Treasury to 2.0%. Oil finished up 3+ to the 56s & gold shot up a staggering 45 to 1393 (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)
Trump says Iranian downing of US drone may have been unintentional
US oil jumped on after Iran shot down a U.S. military drone, prompting Pres Trump to blast Tehran on Twitter & fueling concerns of a conflict between the 2 countries. West Texas Intermediate crude settled up $2.89 (5.4%) to $56.65 a barrel after surging as much as 6%. Brent crude, the global benchmark, was up $2.79 (4.5%) at $64.61 a barrel. Trump took to Twitter to criticize what US officials say was Iran’s attack on a US surveillance drone earlier in the day, saying that Tehran made a “very big mistake.” Trump said later that the public will “find out” about whether the US plans to retaliate with a military strike, but said he finds it “hard to believe it was intentional.” The drone downing came amid a standoff between DC & Tehran, stemming from the the administration's decision to withdraw from the 2015 Iran nuclear agreement. Prior to the drone attack over the Strait of Hormuz, the US accused Iran of recent attacks on oil tankers in the Persian Gulf region. The strained relationship has sent crude prices soaring since more than 20% of the world's oil output comes from the Middle East. Any threats to the free flow of oil through key chokepoint the Strait of Hormuz could dampen crude supplies.
US oil surges 5.4% to settle at $56.65 after Trump says Iran made a ‘very big mistake’
Gold hit a 5-year high after a dovish Federal Reserve opened the door to further rate cuts, pressuring Treasury yields & the $. Spot gold prices surged to levels not seen in more than 5 years. The commodity is trading 2.2% higher at $1389 per ounce. Gold futures also saw strong gains, rising 3.3% to $1394 per ounce. Following the Fed meeting, where the central bank left interest rates unchanged but opened the door for a possible rate cut in the future, the 10-year Treasury yield fell below 2% for the first time since Nov 2016, breaching an important psychological level. The yield on the 3-month Treasury note trickled lower to 2.146% & the 2-year note dropped to 1.716%. Lower gold prices make gold attractive. The shorter end of the yield curve tends to move in line with interest rate movements, meaning that a lower expected Fed funds rate will likely drive short term yields down. As the yields on the shorter-duration notes go down, gold becomes more attractive as an investment option due to its relatively higher yield. Fed Chair Powell said at a post meeting news conference that “many participants now see the case for somewhat more accommodative policy has strengthened. ”
Gold prices surge to more than five-year high after dovish Fed opens door for rate cut
US companies brought home more profits stashed overseas in 2018, the first year after the tax-law overhaul, than initially estimated. Firms repatriated $776B in foreign profits last year, the Commerce Dept said. The agency revised up its estimate made in Mar by more than $111B.
Just about all investments had a stellar day. You don't see that too often. Stock averages are at or next to record highs. At same time gold & Treasuries are at multi year highs. Even oil got a pop with all the excitement in the Mid East. While gold & Treasuries are sensitive to lower yields, they are also being purchased by investors who have negative thoughts about the economy. That's a major disconnect while stock prices are bid higher. Time will settle that difference.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Pres Trump told reporters that Iran may not have intentionally downed an unmanned US
surveillance drone. He said the public will “find out” about whether
the US intends to retaliate with a military strike. “I find it
hard to believe it was intentional,” Trump said during a White House
meeting with Canadian Prime Minister Justin Trudeau. “I think they made a mistake, and I’m not just talking the country made
a mistake. I think that someone under the command of that country made a
big mistake,” Trump added. Stocks briefly dipped to session
lows after Trump said “you’ll soon find out” when asked if the US
would strike Iran. They resumed their climb with his subsequent comments
about Iran's intentions. US officials said earlier in the day
that an Iranian missile had shot down the drone over the Strait of
Hormuz, a shipping route thru which much of the world’s oil flows.
Iran claimed that the drone was above its territory. Talking with
reporters, Trump repeated the claim that the drone was flying above
intl waters. But the pres suggested that the incident may
have been unintended & done by someone who was “loose & stupid.” He
declined to rule out talks with Tehran, saying that he would see what
happens.
Trump says Iranian downing of US drone may have been unintentional
US oil jumped on after Iran shot down a U.S. military drone, prompting Pres Trump to blast Tehran on Twitter & fueling concerns of a conflict between the 2 countries. West Texas Intermediate crude settled up $2.89 (5.4%) to $56.65 a barrel after surging as much as 6%. Brent crude, the global benchmark, was up $2.79 (4.5%) at $64.61 a barrel. Trump took to Twitter to criticize what US officials say was Iran’s attack on a US surveillance drone earlier in the day, saying that Tehran made a “very big mistake.” Trump said later that the public will “find out” about whether the US plans to retaliate with a military strike, but said he finds it “hard to believe it was intentional.” The drone downing came amid a standoff between DC & Tehran, stemming from the the administration's decision to withdraw from the 2015 Iran nuclear agreement. Prior to the drone attack over the Strait of Hormuz, the US accused Iran of recent attacks on oil tankers in the Persian Gulf region. The strained relationship has sent crude prices soaring since more than 20% of the world's oil output comes from the Middle East. Any threats to the free flow of oil through key chokepoint the Strait of Hormuz could dampen crude supplies.
US oil surges 5.4% to settle at $56.65 after Trump says Iran made a ‘very big mistake’
Gold hit a 5-year high after a dovish Federal Reserve opened the door to further rate cuts, pressuring Treasury yields & the $. Spot gold prices surged to levels not seen in more than 5 years. The commodity is trading 2.2% higher at $1389 per ounce. Gold futures also saw strong gains, rising 3.3% to $1394 per ounce. Following the Fed meeting, where the central bank left interest rates unchanged but opened the door for a possible rate cut in the future, the 10-year Treasury yield fell below 2% for the first time since Nov 2016, breaching an important psychological level. The yield on the 3-month Treasury note trickled lower to 2.146% & the 2-year note dropped to 1.716%. Lower gold prices make gold attractive. The shorter end of the yield curve tends to move in line with interest rate movements, meaning that a lower expected Fed funds rate will likely drive short term yields down. As the yields on the shorter-duration notes go down, gold becomes more attractive as an investment option due to its relatively higher yield. Fed Chair Powell said at a post meeting news conference that “many participants now see the case for somewhat more accommodative policy has strengthened. ”
Gold prices surge to more than five-year high after dovish Fed opens door for rate cut
US companies brought home more profits stashed overseas in 2018, the first year after the tax-law overhaul, than initially estimated. Firms repatriated $776B in foreign profits last year, the Commerce Dept said. The agency revised up its estimate made in Mar by more than $111B.
U.S. Companies Repatriated More Profits in 2018 Than Estimated
Just about all investments had a stellar day. You don't see that too often. Stock averages are at or next to record highs. At same time gold & Treasuries are at multi year highs. Even oil got a pop with all the excitement in the Mid East. While gold & Treasuries are sensitive to lower yields, they are also being purchased by investors who have negative thoughts about the economy. That's a major disconnect while stock prices are bid higher. Time will settle that difference.
Dow Jones Industrials
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