Dow surged 511 (closing st the highs), advancers over decliners about 4-1 & NAZ jumped up 194. The MLP index gained 2+ to the 248s. Junk bond funds rose & Treasuries continued in demand. Oil crawled higher in the 53s & gold went up 2 to 1325.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Federal Reserve Vice Chairman Richard Clarida said the economy is in a good place but he & his fellow central bankers are willing to take action if conditions change. “We will put in policies that need to be in place to keep the economy, which is in a very good place right now, and it’s our job to keep it there,” he said. Clarida spoke as financial markets anticipate at least 2 interest rate cuts before the end of the year. The Fed's most recent forecast is to leave rates unchanged, but recent pressures from the escalating trade war & turbulence in the bond market have goosed market expectations. Though noncommittal about the future of rates, he said he will be watching current conditions, in particular the trade war & the inverted yield curve in the bond market, for clues about where the Fed should go next. If conditions change, he added that would influence his decision-making. In particular, he addressed the issue of an insurance rate but, done as a preventive measure to get ahead of a slowdown. “I’m not going to look into a crystal ball. I will look into the past,” Clarida said. “That has been in the monetary policy toolkit in the past.” The remarks came at a conference in which the Fed is soliciting input on the tools it uses to carry out its dual mandate of full employment and price stability, as well as how it communicates its actions.
Vice Chair Clarida: If economy slows, Fed will implement policy to keep it in a ‘good place’
Factory orders in the US fell sharply in Apr for the 2nd time in 3 months, adding to mounting evidence of a broad slowdown in a key segment of the US economy. Orders dropped 0.8% in the month, the gov said. The forecast called for a 0.9% decline. Demand was even weaker for durable goods, products such as autos, appliances & machines meant to last at least 3 years. These orders sank an unrevised 2.1%. Orders declined for iron, steel, construction machinery, computers, autos & passenger planes. The decline in bookings for durable goods was partly offset by a 0.5% increase in orders for nondurable goods such as clothes & grocery items. A closely followed gauge of business investment, core orders for durable goods, fell by a revised 1%. The yearly pace of business investment slowed in Apr to 1.2% from 3.8%, marking the smallest 12-month increase since the final month of Obama's presidency in Jan 2017. Manufacturers have curbed production because of weaker exports, slower demand at home & uncertainty caused by trade fights with China & other countries. The industry isn't big enough anymore to plunge the US into recession al by itself, but a prolonged drag makes the economy more susceptible to a downturn.
Federal Reserve Bank of Chicago Pres Charles Evans said he doesn't see the need to lower short-term rates, a move that is priced into financial markets. “I think the fundamentals for the economy continue to be solid” & the labor market is strong even as inflation is still short of the official 2% target, Mr. Evans said.
Farmer sentiment plunged to its lowest level in nearly 3 years as the trade war with China escalated & concerns about economic conditions grew, according to a survey. May's Purdue University/CME Group Ag Economy Barometer declined 14 points from the prior month to a reading of 101, which is the lowest point since Oct 2016. It said the sentiment index is now at levels that have erased all gains recorded following Pres Trump's election. “Ag producers are telling us the agricultural economy weakened considerably this spring as the barometer has fallen 42 points (29%) since the start of this year,” said James Mintert, director of Purdue’s Center for Commercial Agriculture & the barometer's principal investigator. Farmers have been facing one of the wettest spring seasons in decades as a result of heavy rains & flooding in large sections of the Midwest & Eastern Plains region. Corn & soybean planting paces are the slowest on record since the mid-1990s, according to the Dept of Agriculture. The later planting means the crops are considered more susceptible to risk of injury & lower yields from summer heat & early fall frost damage. Also, some producers may switch to shorter season varieties of corn & soybeans, but that also comes at the risk of lower yielding crops. “Farmers are facing tough decisions in the midst of a wet planting season and a lot of uncertainty surrounding trade discussions,” Mintert said. Soybean farmers have been among the hardest hit in the China trade war in terms of $ value. Last year, China put retaliatory tariffs in place on a variety of agricultural & food products, from soybeans, corn & wheat to dairy & certain meat products. Before the trade war, China bought roughly ½ of US soybean exports. But the value of soybean exports to China fell 74% to $3.1B in 2018 from $12.2B the previous year, according to the USDA.
Farmer sentiment hits the lowest level since before Trump’s election as the Chin…
Fed officials sent clear signals they will help the economy if needed. Nothing like those words to warm the hearts of investors. However intl trade remains a mess. Much more will be needed for a fix. After today's rally, the Dow is back to where it was in early Feb on the way up. Demand for gold & Treasuries along with today's stock market rally continue to be strong. More will be needed than 2 rate cuts to help the economy.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The job market continues to hum along nicely, with
both the number of openings and median pay increasing slightly,
according to the most-recent Glassdoor Job Market Report. The
number of open positions climbed by 2% to 5.76M, up from 5.69M in May 2018. Pay rose by 2%, with the median worker in the
US earning $53,273. It's a very hot job market,
with literally more openings than workers available to fill them. That
creates a situation where workers, at least those in some high-demand
fields, have more leverage than they normally would. As
has generally been the case, most of the jobs seeing the biggest
increases pay below the median annual salary. That's true of 9 of the
10 positions with the fastest pay growth.
Only truck driver, a job that has severe worker shortages, comes in above the median. It's generally a good time to be a worker, but
employees at the bottom of the pay scale are still struggling. Many
large retailers, for example, have increased wages, but the numbers for
people in less-skilled & unskilled jobs are still hard, or impossible,
to live on. These numbers basically tell
Americans that education & skill matter. If you want to make a salary
above the median, you need to have some level of specialized skill. That
doesn't always mean college, a truck driver has specific training but
doesn't need a degree, but to get paid, it's very clear you need
training or school. The economy shows no sign
of slowing down, & that should continue to drive wages for
lower-paying jobs higher. Workers in those jobs, however, need to make
an effort to learn the skills needed to advance beyond those positions.
Job Openings, Pay Inched Up Slightly in May
Federal Reserve Vice Chairman Richard Clarida said the economy is in a good place but he & his fellow central bankers are willing to take action if conditions change. “We will put in policies that need to be in place to keep the economy, which is in a very good place right now, and it’s our job to keep it there,” he said. Clarida spoke as financial markets anticipate at least 2 interest rate cuts before the end of the year. The Fed's most recent forecast is to leave rates unchanged, but recent pressures from the escalating trade war & turbulence in the bond market have goosed market expectations. Though noncommittal about the future of rates, he said he will be watching current conditions, in particular the trade war & the inverted yield curve in the bond market, for clues about where the Fed should go next. If conditions change, he added that would influence his decision-making. In particular, he addressed the issue of an insurance rate but, done as a preventive measure to get ahead of a slowdown. “I’m not going to look into a crystal ball. I will look into the past,” Clarida said. “That has been in the monetary policy toolkit in the past.” The remarks came at a conference in which the Fed is soliciting input on the tools it uses to carry out its dual mandate of full employment and price stability, as well as how it communicates its actions.
Vice Chair Clarida: If economy slows, Fed will implement policy to keep it in a ‘good place’
Factory orders in the US fell sharply in Apr for the 2nd time in 3 months, adding to mounting evidence of a broad slowdown in a key segment of the US economy. Orders dropped 0.8% in the month, the gov said. The forecast called for a 0.9% decline. Demand was even weaker for durable goods, products such as autos, appliances & machines meant to last at least 3 years. These orders sank an unrevised 2.1%. Orders declined for iron, steel, construction machinery, computers, autos & passenger planes. The decline in bookings for durable goods was partly offset by a 0.5% increase in orders for nondurable goods such as clothes & grocery items. A closely followed gauge of business investment, core orders for durable goods, fell by a revised 1%. The yearly pace of business investment slowed in Apr to 1.2% from 3.8%, marking the smallest 12-month increase since the final month of Obama's presidency in Jan 2017. Manufacturers have curbed production because of weaker exports, slower demand at home & uncertainty caused by trade fights with China & other countries. The industry isn't big enough anymore to plunge the US into recession al by itself, but a prolonged drag makes the economy more susceptible to a downturn.
Factory orders sink again, highlight soft underbelly of U.S. economy
Federal Reserve Bank of Chicago Pres Charles Evans said he doesn't see the need to lower short-term rates, a move that is priced into financial markets. “I think the fundamentals for the economy continue to be solid” & the labor market is strong even as inflation is still short of the official 2% target, Mr. Evans said.
Fed’s Evans Doesn’t See Case for a Rate Cut Yet
Farmer sentiment plunged to its lowest level in nearly 3 years as the trade war with China escalated & concerns about economic conditions grew, according to a survey. May's Purdue University/CME Group Ag Economy Barometer declined 14 points from the prior month to a reading of 101, which is the lowest point since Oct 2016. It said the sentiment index is now at levels that have erased all gains recorded following Pres Trump's election. “Ag producers are telling us the agricultural economy weakened considerably this spring as the barometer has fallen 42 points (29%) since the start of this year,” said James Mintert, director of Purdue’s Center for Commercial Agriculture & the barometer's principal investigator. Farmers have been facing one of the wettest spring seasons in decades as a result of heavy rains & flooding in large sections of the Midwest & Eastern Plains region. Corn & soybean planting paces are the slowest on record since the mid-1990s, according to the Dept of Agriculture. The later planting means the crops are considered more susceptible to risk of injury & lower yields from summer heat & early fall frost damage. Also, some producers may switch to shorter season varieties of corn & soybeans, but that also comes at the risk of lower yielding crops. “Farmers are facing tough decisions in the midst of a wet planting season and a lot of uncertainty surrounding trade discussions,” Mintert said. Soybean farmers have been among the hardest hit in the China trade war in terms of $ value. Last year, China put retaliatory tariffs in place on a variety of agricultural & food products, from soybeans, corn & wheat to dairy & certain meat products. Before the trade war, China bought roughly ½ of US soybean exports. But the value of soybean exports to China fell 74% to $3.1B in 2018 from $12.2B the previous year, according to the USDA.
Farmer sentiment hits the lowest level since before Trump’s election as the Chin…
Fed officials sent clear signals they will help the economy if needed. Nothing like those words to warm the hearts of investors. However intl trade remains a mess. Much more will be needed for a fix. After today's rally, the Dow is back to where it was in early Feb on the way up. Demand for gold & Treasuries along with today's stock market rally continue to be strong. More will be needed than 2 rate cuts to help the economy.
Dow Jones Industrials
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