Dow went up 99 (near the highs of today), advancers slightly ahead of decliners & NAZ slid back 7. The MLP index was off 1+ to the 224s & the REIT index rose 3+ to the 394s. Junk bond funds fluctuated & Treasuries surged, taking the yield on the 10 year Treasury below 1.53% (more below). Oil continued lower, falling into the 54s, & gold added 4 to 1532 (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)
Investors clamored into the safety of US gov bonds, sending the 30-year Treasury bond yield below 2% for the first time & the 10-year Treasury note yield below 1.5%, a 3-year low. Around 2:PM. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, hit a 3-year low of 1.475%, while the yield on the 30-year Treasury bond was at 1.944%, after earlier falling to 1.941% for the first time ever. The 2-year Treasury yield was 1.467%, its lowest level since Oct 2017. The historic drop in long-term US bond yields comes shortly after interest rates on the closely watched 10-year & 2-year Treasuries inverted. The inversion of this key part of the yield curve has previously been a reliable indicator of economic recessions. That part of the curve was positively sloping again yesterday but only slightly.
10-year Treasury yield falls to three-year low below 1.5%, 30-year rate declines to record lo
Oil prices fell more than 1% today, extending the previous session’s 3% drop, pressured by mounting recession concerns & a surprise boost in US crude inventories. In a sign of investor concern that the world's biggest economy could be heading for recession, weighing on oil demand, the Treasury bond yield curve inverted yesterday for the first time since 2007. China's threat to impose counter-measures in retaliation for the latest US tariffs on $300B of Chinese goods also weighed on oil prices. Brent crude fell as much as 3%, to $57.67 a barrel. The intl benchmark was 2.4% lower at $58.05 & West Texas Intermediate crude (WTI) was down 1.4%, to $54.47. The price of Brent is still up 10% this year thanks to supply cuts led by OPEC & allies such as Russia, a group known as OPEC+. In Jul, OPEC+ agreed to extend oil output cuts until Mar 2020 to prop up prices. A Saudi official on Aug 8 indicated more steps may be coming, saying “Saudi Arabia is committed to do whatever it takes to keep the market balanced next year.” But the efforts of OPEC+ have been outweighed by worries about the global economy amid the US-China trade dispute & uncertainty over Brexit, as well as rising US stockpiles of crude & higher output of US shale oil. China reported disappointing data for Jul, including a surprise drop in industrial output growth to a more than 17-year low. A slump in exports sent Germany's economy into reverse in Q2. Meanwhile, a 2nd week of unexpected rises in US crude inventories is adding to the pressure. US crude stocks grew by 1.6M barrels last week, compared with expectations for a drop of 2.8M barrels, the Energy Information Administration (EIA) said. Providing some support to US crude prices, inventories at Cushing, Oklahoma, the delivery point for WTI, fell by about 2M barrels last week, traders said.
Oil slides 1.4% on recession fears, China’s trade threats
Gold prices recovered earlier losses to score a modest gain & another finish at a more than 6-year high, on the back of haven-related buying spurred on by risks to the global economy. Gold for Dec tacked on $3.40 (0.2%) to settle at $1531, the highest most-active contract finish since Apr 2013. Gold had fallen early today as US benchmark stock indices moved up following yesterday's rout, which had been inspired by growing recession fears tied to weak economic data out of Europe & China. An inversion of the main measure of the US yield curve, which is seen as a recession warning signal, amplified stock market losses. Among economic data yesterday, US retail sales surged in Jul, climbing by a better-than-expected 0.7%. Industrial production in Jul, however, fell by 0.2%, marking the 2nd drop in the past 4 months. Meanwhile, stocks appeared to take some solace from remarks by a spokesperson for China’s foreign ministry who said Beijing still hoped to reach a mutually acceptable solution on the trade conflict. Earlier, China said it was prepared to take unspecified steps to retaliate for planned US tariffs set to take effect on Sep 1.
Gold ekes out a gain to notch another finish at a more than 6-year high
US industrial output fell in Jul, as the manufacturing sector continued to struggle with trade-related headwinds. Industrial production, a measure of factory, mining & utility output, declined a seasonally adjusted 0.2% in Jul from the prior month, the Federal Reserve said.
Today's rally hardly warmed the hearts of the bulls. There is plenty of excitement out there for investors to assess. The inverted yield curve is getting the most attention because it makes everybody nervous. US-China trade talks are going nowhere, an economy in China with slower growth rates & the mess in Hong Kong adds to investor anxiety. These are difficult times for nervous investors, so they keep buying gold & Treasuries. Meanwhile the Dow is still down roughly 2K from hits record high in mid Jul. Loyal investors will hang in there.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Investors clamored into the safety of US gov bonds, sending the 30-year Treasury bond yield below 2% for the first time & the 10-year Treasury note yield below 1.5%, a 3-year low. Around 2:PM. ET, the yield on the benchmark 10-year Treasury note, which moves inversely to price, hit a 3-year low of 1.475%, while the yield on the 30-year Treasury bond was at 1.944%, after earlier falling to 1.941% for the first time ever. The 2-year Treasury yield was 1.467%, its lowest level since Oct 2017. The historic drop in long-term US bond yields comes shortly after interest rates on the closely watched 10-year & 2-year Treasuries inverted. The inversion of this key part of the yield curve has previously been a reliable indicator of economic recessions. That part of the curve was positively sloping again yesterday but only slightly.
10-year Treasury yield falls to three-year low below 1.5%, 30-year rate declines to record lo
Oil prices fell more than 1% today, extending the previous session’s 3% drop, pressured by mounting recession concerns & a surprise boost in US crude inventories. In a sign of investor concern that the world's biggest economy could be heading for recession, weighing on oil demand, the Treasury bond yield curve inverted yesterday for the first time since 2007. China's threat to impose counter-measures in retaliation for the latest US tariffs on $300B of Chinese goods also weighed on oil prices. Brent crude fell as much as 3%, to $57.67 a barrel. The intl benchmark was 2.4% lower at $58.05 & West Texas Intermediate crude (WTI) was down 1.4%, to $54.47. The price of Brent is still up 10% this year thanks to supply cuts led by OPEC & allies such as Russia, a group known as OPEC+. In Jul, OPEC+ agreed to extend oil output cuts until Mar 2020 to prop up prices. A Saudi official on Aug 8 indicated more steps may be coming, saying “Saudi Arabia is committed to do whatever it takes to keep the market balanced next year.” But the efforts of OPEC+ have been outweighed by worries about the global economy amid the US-China trade dispute & uncertainty over Brexit, as well as rising US stockpiles of crude & higher output of US shale oil. China reported disappointing data for Jul, including a surprise drop in industrial output growth to a more than 17-year low. A slump in exports sent Germany's economy into reverse in Q2. Meanwhile, a 2nd week of unexpected rises in US crude inventories is adding to the pressure. US crude stocks grew by 1.6M barrels last week, compared with expectations for a drop of 2.8M barrels, the Energy Information Administration (EIA) said. Providing some support to US crude prices, inventories at Cushing, Oklahoma, the delivery point for WTI, fell by about 2M barrels last week, traders said.
Oil slides 1.4% on recession fears, China’s trade threats
Gold prices recovered earlier losses to score a modest gain & another finish at a more than 6-year high, on the back of haven-related buying spurred on by risks to the global economy. Gold for Dec tacked on $3.40 (0.2%) to settle at $1531, the highest most-active contract finish since Apr 2013. Gold had fallen early today as US benchmark stock indices moved up following yesterday's rout, which had been inspired by growing recession fears tied to weak economic data out of Europe & China. An inversion of the main measure of the US yield curve, which is seen as a recession warning signal, amplified stock market losses. Among economic data yesterday, US retail sales surged in Jul, climbing by a better-than-expected 0.7%. Industrial production in Jul, however, fell by 0.2%, marking the 2nd drop in the past 4 months. Meanwhile, stocks appeared to take some solace from remarks by a spokesperson for China’s foreign ministry who said Beijing still hoped to reach a mutually acceptable solution on the trade conflict. Earlier, China said it was prepared to take unspecified steps to retaliate for planned US tariffs set to take effect on Sep 1.
Gold ekes out a gain to notch another finish at a more than 6-year high
US industrial output fell in Jul, as the manufacturing sector continued to struggle with trade-related headwinds. Industrial production, a measure of factory, mining & utility output, declined a seasonally adjusted 0.2% in Jul from the prior month, the Federal Reserve said.
Industrial Sector Struggled in July
Today's rally hardly warmed the hearts of the bulls. There is plenty of excitement out there for investors to assess. The inverted yield curve is getting the most attention because it makes everybody nervous. US-China trade talks are going nowhere, an economy in China with slower growth rates & the mess in Hong Kong adds to investor anxiety. These are difficult times for nervous investors, so they keep buying gold & Treasuries. Meanwhile the Dow is still down roughly 2K from hits record high in mid Jul. Loyal investors will hang in there.
Dow Jones Industrials
No comments:
Post a Comment