Dow fell 68 (closing at the lows), decliners over advancers about 5-4 & NAZ pulled back 60. The MLP index rose 1+ to the 254s & the REIT index sank 6+ to the 382s. Junk bond funds hardly budged in price & Treasuries slid lower in price. Oil went up in the 55s (more below) & gold drifted back 1 to 1426 following recent strength.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The Univ of Mich's preliminary estimate of consumer confidence remained stable in Jul. The consumer sentiment index came in at 98.4, little changed from the Jun's figure of 98.2. The current conditions index dropped slightly lower, but was countered by a rebound in the expectations index. Overall, sentiment continues to be at elevated levels & is supportive of consumer spending. Consumers' income expectations continued to be positive, with around 61% of all respondents expecting income to either surpass or keep pace with inflation. Similarly, 45.2% expect family income levels to surpass inflation over the next 5 years. This is in line with consumers' favorable expectations of labor market conditions. Moreover, 55% of all respondent now anticipate interest rates to either fall or remain the same, compared with 41% in May & 28% at the start of this year. Looking at inflation expectations, the year-ahead rate moved one-tenth lower, to 2.6%, while the long-term inflation expectations measure rose 3-tenths to 2.6%.
U.S. consumer confidence remains stable in July, University of Michigan’s sentiment index rises to 98.4
Shares of American Express (AXP), Dow stock, slumped, after a positive earnings report & confirmation of its full-year outlook wasn't quite good enough for the recent rally to record highs to resume. The decline was enough to make the stock the biggest among components. EPS rose to $2.07 from $1.84 in the year-ago period & beat the estimate for EPS of $2.03. Revenue increased 8% to $10.84B, just above the consensus of $10.83B, as the consumer services business showed the fastest growth. The company also affirmed its 2019 financial guidance ranges, of adjusted EPS of $7.85-8.35 & revenue growth of 8-10%. On the post-earnings conference call, CFO Jeff Campbell indicated that the 2019 EPS outlook was actually increased slightly. In Mar, the company said EPS would be at the “lower end” of the guidance range. “Given where we are today, I will expect our full-year EPS results to be more in line with the middle part of our original guidance range,” Campbell said. The stock fell 3.58.
If you would like to learn more about AXP, click on this link:
club.ino.com/trend/analysis/stock/AXP?a_aid=CD3289&a_bid=6ae5b6f7
Oil futures finished higher after reports that Iran seized a U.K.-flagged ship in the Gulf of Oman. Prices still settled lower for the week, however, on worries about a slowdown in demand. Aug West Texas Intermediate oil added 33¢ (0.6%) to settle at $55.63 a barrel. It fell 7.6% for the week after settling yesterday at its lowest in a month.
Stocks saw selling in the PM as hopes for a ½ point rate cut diminished. Earnings are not getting a warm reception by investors. Good enough does not seem to be quite good enough. Gold is at multi year highs while stock averages are essentially at new records. The disconnect between safe & risky investments continues. That can not last!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
House Speaker Nancy Pelosi is rejecting the White House's latest debt limit proposal, which demanded $150B in spending cuts cuts. Last night, the Trump administration sent Dems a budget agreement,
requesting they choose an area to cut $150B in spending, out of
an option of $574M in saving options, to offset the costs of a 2-year budget cap agreement. Officials said that the proposal is a starting point. Negotiations between administration officials & congressional
leaders are expected to continue today, as they hope to pen a deal
in order to set up a House vote on it next week -- ahead of Congress'
impending Aug recess. Treasury Secretary Steve Mnuchin said yesterday that lawmakers were close to an agreement &
that he was confident the gov is not at risk of defaulting
on its debt. “I think that everyone is in
agreement that we won’t do anything that puts the U.S. government at
risk in terms of our issue of defaulting,” he said.
“I think that nobody wants a shutdown in any scenario.” In
the “most conservative” scenario, Mnuchin said it's possible the
federal gov has an issue at the beginning of Sep before
lawmakers are scheduled to return from their summer recess on Sep 9.
He previously warned House Speaker Nancy Pelosi that the gov
could run out of cash by early Sep if Congress didn't raise the
debt ceiling ahead of its Aug recess. “That’s why I’ve encouraged them to raise the debt ceiling before they leave,” he added. The debt ceiling, currently set at $20.46T, is the
legal limit on the total amount of debt that the federal gov can
accrue; according to the Committee for a Responsible Federal Budget, it
applies to both the $16.2T held by the public & the $5.9T owed by the gov.
PELOSI REPORTEDLY REJECTS LATEST WHITE HOUSE DEBT LIMIT OFFER OVER SPENDING CUTS
The Univ of Mich's preliminary estimate of consumer confidence remained stable in Jul. The consumer sentiment index came in at 98.4, little changed from the Jun's figure of 98.2. The current conditions index dropped slightly lower, but was countered by a rebound in the expectations index. Overall, sentiment continues to be at elevated levels & is supportive of consumer spending. Consumers' income expectations continued to be positive, with around 61% of all respondents expecting income to either surpass or keep pace with inflation. Similarly, 45.2% expect family income levels to surpass inflation over the next 5 years. This is in line with consumers' favorable expectations of labor market conditions. Moreover, 55% of all respondent now anticipate interest rates to either fall or remain the same, compared with 41% in May & 28% at the start of this year. Looking at inflation expectations, the year-ahead rate moved one-tenth lower, to 2.6%, while the long-term inflation expectations measure rose 3-tenths to 2.6%.
U.S. consumer confidence remains stable in July, University of Michigan’s sentiment index rises to 98.4
Federal Reserve officials signaled they are ready to cut interest
rates by a qtr-percentage point at their coming meeting, while
indicating the potential for additional reductions because they are
worried about a slowdown in global growth, an increase in trade-policy
uncertainty & a pullback in inflation. Officials aren’t
prepared for bolder action by making a ½-point cut, as analysts &
traders have speculated in recent days, according to the officials'
recent public statements & interviews.
Fed Officials Signal Quarter-Point Rate Cut Likely at July Meeting
Shares of American Express (AXP), Dow stock, slumped, after a positive earnings report & confirmation of its full-year outlook wasn't quite good enough for the recent rally to record highs to resume. The decline was enough to make the stock the biggest among components. EPS rose to $2.07 from $1.84 in the year-ago period & beat the estimate for EPS of $2.03. Revenue increased 8% to $10.84B, just above the consensus of $10.83B, as the consumer services business showed the fastest growth. The company also affirmed its 2019 financial guidance ranges, of adjusted EPS of $7.85-8.35 & revenue growth of 8-10%. On the post-earnings conference call, CFO Jeff Campbell indicated that the 2019 EPS outlook was actually increased slightly. In Mar, the company said EPS would be at the “lower end” of the guidance range. “Given where we are today, I will expect our full-year EPS results to be more in line with the middle part of our original guidance range,” Campbell said. The stock fell 3.58.
If you would like to learn more about AXP, click on this link:
club.ino.com/trend/analysis/stock/AXP?a_aid=CD3289&a_bid=6ae5b6f7
American Express stock leads Dow losers after 2019 outlook disappoints bulls
Oil futures finished higher after reports that Iran seized a U.K.-flagged ship in the Gulf of Oman. Prices still settled lower for the week, however, on worries about a slowdown in demand. Aug West Texas Intermediate oil added 33¢ (0.6%) to settle at $55.63 a barrel. It fell 7.6% for the week after settling yesterday at its lowest in a month.
Oil gains for the session, but U.S. prices drop over 7% for the week
Stocks saw selling in the PM as hopes for a ½ point rate cut diminished. Earnings are not getting a warm reception by investors. Good enough does not seem to be quite good enough. Gold is at multi year highs while stock averages are essentially at new records. The disconnect between safe & risky investments continues. That can not last!
Dow Jones Industrials
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