Dow finished the day up 3 (after earlier losses), advancers over decliners 5-4 & NAZ climbed 22. The MLP index was off 1+ to the 253s & the REIT index slid back a tad to the 388s. Junk bond funds drifted lower & Treasuries rose in price. Oil retreated 1+ to the 55s (more below) & gold jumped up 23 to 1446, a new 6 year high.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
NY Fed President John Williams says the Fed needs to ‘act quickly’ if there is ‘economic distress’
IBM (IBM), a Dow stock, reported better-than-expected Q2 earnings, but the stock bounced around as the company's guidance for the year held steady. The key numbers were:
If you would like to learn more about IBM, click on this link:
club.ino.com/trend/analysis/stock/IBM?a_aid=CD3289&a_bid=6ae5b6f7
IBM reports better-than-expected earnings, maintains full-year guidance
The leading economic index fell 0.3% in Jun to mark the biggest decline in 3 years, suggesting US growth is likely to be softer in the months ahead. The decline in Jun, however, appears to be a bit of an anomaly. Weekly jobless claims spiked in Jun, but have since fallen again. And manufacturing orders & housing permits were unusually weak last month, suggesting a rebound might be in the cards soon. A measure of current conditions rose 0.1% & a " lagging" index climbed 0.6%. The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks & valleys.
The Philadelphia Fed said its gauge of business activity in its region rebounded strongly in Jul after hitting its lowest level in 4 months in Jun. The regional Fed bank's index rose to 21.8 in Jul from 0.3 in Jun. The Jul level is the highest in a year after the index was 16.6 in May. Any reading above zero indicates improving conditions. The forecast called for a 4.5 reading. The barometer on new orders increased 11 points to 18.9 while the shipments index rose 8 points to 24.9. The measure on 6-month business outlook rose 17 points to 38, its highest reading since last May. 51% of the manufacturers surveyed said they have seen a “modest“ increase in demand for their products over recent months. The surprising gain offsets some of the gloom surrounding manufacturing. On Mon, a similar survey conducted by the NY Fed saw sentiment rebound partially in Jul. Manufacturing has hit a rough patch this year, with the impact of intl trade policy tensions & a strong $ holding down activity. Industrial production has declined for 2 straight qtrs, according to figures released Tues.
Philadelphia Fed manufacturing gauge rebounds sharply in July to highest level in a year
Earlier gains for oil futures on the back of increased tensions in the Middle East gave way to sizable declines, pushing US & global benchmark prices to their lowest settlements in a month. Aug WTI crude lost $1.48 (2.6%) to settle at $55.30 a barrel after falling 1.5% yesterday. Intl benchmark Sep Brent declined $1.73 (2.7%) to $61.93 after tumbling 1.1% yesterday. Both benchmarks logged their lowest front-month contract finish since Jun 19. Prices had been trading higher early today, after Iran's Revolutionary Guard said it seized a foreign oil tanker, which it claims was smuggling 1M liters of fuel near the island of Larak in the Persian Gulf on Sun. Prices also posted declines yesterday after the Energy Information Administration yesterday reported that domestic crude supplies fell for a 5th consecutive week, but by less than the market expected—& petroleum products posted sizable gains.
Oil prices drop nearly 3% to lowest settlement in a month
There was some excitement for stocks today. The market was lower on dreary word about trade talks. Then Williams gave helpful comments (above) about a rate cut at the end of Jul. The Dow shot up more than 100. Meanwhile gold, bets against the stock market, had a stellar day.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Central bankers need to act quickly & forcefully
when rates are low & economic growth is slowing, NY Federal
Reserve Pres John Williams said. The influential
policymaker delivered a speech discussing what should be done when
central banks are near the “zero lower bound,” or close to as low as
rates can go. “It’s better to take preventative measures than to wait for disaster to
unfold,” he said. Rather than keep rates elevated to give central banks
room to cut in the face of a crisis, Williams said the proper move is
not to “keep your powder dry.” “When the ZLB is nowhere in view,
one can afford to move slowly and take a ‘wait and see’ approach to
gain additional clarity about potentially adverse economic developments.
But not when interest rates are in the vicinity of the ZLB,” he said in his remarks. “In that case, you want to do the opposite, and
vaccinate against further ills. When you only have so much stimulus at
your disposal, it pays to act quickly to lower rates at the first sign
of economic distress.” Williams spoke as the policymaking FOMC is expected to cut its benchmark interest rate
during the Jul 30-31 meeting. Officials are worried about persistently
low inflation, spillover from a global slowdown & the fallout from
back-&-forth tariffs between the US & China. The Fed
currently pegs the overnight funds rate at 2.25%-2.5% — above zero, but still well below normal levels that have
prevailed during past economic expansions. Williams
did not directly address whether he favors a cut, though markets are
pricing in a 100% chance of a qtr-point reduction & a 38%
probability that the Fed might cut by ½ a point. However, he said that when faced with low rates and slowing
growth, the best strategy is to “take swift action” & “keep interest
rates lower for longer.” “The expectation of lower interest rates
in the future lowers yields on bonds and thereby fosters more favorable
financial conditions overall. This will allow the stimulus to pick up
steam, support economic growth over the medium term, and allow inflation
to rise,” he added.
NY Fed President John Williams says the Fed needs to ‘act quickly’ if there is ‘economic distress’
IBM (IBM), a Dow stock, reported better-than-expected Q2 earnings, but the stock bounced around as the company's guidance for the year held steady. The key numbers were:
- Earnings: $3.17 excluding certain items, vs. $3.07 per share as expected.
- Revenue: $19.16B, vs. $19.16B as expected.
If you would like to learn more about IBM, click on this link:
club.ino.com/trend/analysis/stock/IBM?a_aid=CD3289&a_bid=6ae5b6f7
IBM reports better-than-expected earnings, maintains full-year guidance
The leading economic index fell 0.3% in Jun to mark the biggest decline in 3 years, suggesting US growth is likely to be softer in the months ahead. The decline in Jun, however, appears to be a bit of an anomaly. Weekly jobless claims spiked in Jun, but have since fallen again. And manufacturing orders & housing permits were unusually weak last month, suggesting a rebound might be in the cards soon. A measure of current conditions rose 0.1% & a " lagging" index climbed 0.6%. The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks & valleys.
U.S. leading economic index posts biggest drop since 2016
The Philadelphia Fed said its gauge of business activity in its region rebounded strongly in Jul after hitting its lowest level in 4 months in Jun. The regional Fed bank's index rose to 21.8 in Jul from 0.3 in Jun. The Jul level is the highest in a year after the index was 16.6 in May. Any reading above zero indicates improving conditions. The forecast called for a 4.5 reading. The barometer on new orders increased 11 points to 18.9 while the shipments index rose 8 points to 24.9. The measure on 6-month business outlook rose 17 points to 38, its highest reading since last May. 51% of the manufacturers surveyed said they have seen a “modest“ increase in demand for their products over recent months. The surprising gain offsets some of the gloom surrounding manufacturing. On Mon, a similar survey conducted by the NY Fed saw sentiment rebound partially in Jul. Manufacturing has hit a rough patch this year, with the impact of intl trade policy tensions & a strong $ holding down activity. Industrial production has declined for 2 straight qtrs, according to figures released Tues.
Philadelphia Fed manufacturing gauge rebounds sharply in July to highest level in a year
Earlier gains for oil futures on the back of increased tensions in the Middle East gave way to sizable declines, pushing US & global benchmark prices to their lowest settlements in a month. Aug WTI crude lost $1.48 (2.6%) to settle at $55.30 a barrel after falling 1.5% yesterday. Intl benchmark Sep Brent declined $1.73 (2.7%) to $61.93 after tumbling 1.1% yesterday. Both benchmarks logged their lowest front-month contract finish since Jun 19. Prices had been trading higher early today, after Iran's Revolutionary Guard said it seized a foreign oil tanker, which it claims was smuggling 1M liters of fuel near the island of Larak in the Persian Gulf on Sun. Prices also posted declines yesterday after the Energy Information Administration yesterday reported that domestic crude supplies fell for a 5th consecutive week, but by less than the market expected—& petroleum products posted sizable gains.
Oil prices drop nearly 3% to lowest settlement in a month
There was some excitement for stocks today. The market was lower on dreary word about trade talks. Then Williams gave helpful comments (above) about a rate cut at the end of Jul. The Dow shot up more than 100. Meanwhile gold, bets against the stock market, had a stellar day.
Dow Jones Industrials
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