Dow soared 371 (at session highs), advancers over decliners about 5-1 & NAZ jumped 176. The MLP index went up 2+ to the 232s & the REIT index gained 6 to the 397s. Junk bond funds fluctuated & Treasuries declined in price following recent strength. Oil shot up 1+ to the high 52s after yesterday's decline & gold slid back 2 to 1516 (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)
China decries Trump administration's ban on government business with Huawei
Indian automaker Mahindra considers second US plant in Michigan
Dec gold declined $10.10 (0.7%) to $1509 an ounce, after marking the highest level for the precious metal since 2013 based on most-active contracts. Gold holding above the psychologically important $1500 was seen as a sign that the uptrend remains firmly intact for the precious metals, amid anxieties about the health of the global economy & intl trade clashes between 2 world superpowers. China-US trade tensions softened somewhat early after the People's Bank of China set its daily reference rate for the onshore yuan at the weakest level since 2008, but the currency fixing at 7.0039 per $ was at a slightly weaker level than had been expected, helping to calm some worries that Beijing would use its currency to engage in a more aggressive trade clash with the US. Metals have mostly benefited from weakness in equity markets as investors eschew assets perceived as risky in favor of those considered safe havens like gold & sovereign debt. Consequently, a slide in gov debt to ultra-low & negative rates also has helped to buttress bullion & silver, which don't bear a coupon but tend to rally in times of uncertainty. Risk appetite resurfaced on today, drawing demand away from gold, with the Dow & the S&P 500 each enjoying gains over 1%. The 10-year Treasury note's yield fall steadied today, rising to around 1.718% from 1.675% yesterday, which represented its lowest level since Oct 2016. The brisk climb for metals has stoked some worries that commodities may be vulnerable to a more severe pullback if the $ remains elevated.
Oil prices, which plunged into a bear market this week, reclaimed some of their steep loss today, tracking gains for global stock markets as upbeat news emerged from China. West Texas Intermediate (WTI) crude for Sep delivery snapped back $1.45 (2.8%) to $52.54 a barrel. Its 4.7% plunge to $51.09 yesterday was the lowest settlement for the contract since Jan. Oct Brent crude was up $1.15 (2%) at $57.38 a barrel. It fell 4.6% to $56.23 a day earlier, the lowest finish since Jan. WTI remains off roughly 21% from its 2019 settlement high of $66.30 hit on Apr 23, which by most measures, is a return to bear-market territory. Brent has fallen about 23% since the late-Apr high-water mark. Stock indices after China fixed its onshore currency at a level that was higher than expected and as trade data out of the world's 2nd-largest economy was more upbeat, helping to stabilize jittery global markets for now. Oil prices tumbled yesterday, aggravating what's been the worst start to any month since 2015 for US-priced crude, as the White House's tussles with major trade partners, including large oil consumer China, are seen as a risk to global energy demand. Pres Trump said last week he will slap a 10% tariff on a further $300B in Chinese imports from Sep 1, a move which sent global equity markets into a tailspin before the respite midweek.
Just another wild day for the stock market. This time the bulls took command at the opening & did not give that away throughout the session. While there was profit taking in gold, it was mild. Negative thinking investors are still around. The Volatility Index dropped 2+ to the low 17s, but continues above the sub 15 levels that are typical during better times for stocks. More significant price swings lie ahead. But the thought of a rate in Sep is keeping the bulls happy.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Chinese officials criticized the Trump administration's decision to move forward this week with a ban on federal agencies conducting business with Huawei calling the action “discriminatory and unfair.” The
Office of Management & Budget is set to issue an interim rule this
week that will lay out the steps to ensure that gov agencies
aren't buying products from Huawei and several other Chinese companies. “The
US has abused its state power & used every possible means to smear & oppress certain Chinese companies,” said China's Foreign Ministry
spokesperson Hua Chunying. “This has seriously undermined its image as a
country and its own interests. What's worse, it has severely damaged
global industrial chain and supply chain.” The rule, which will apply to Huawei & ZTE, as
well as all of their subsidies, will go into effect Aug 13 & is based
on the National Defense Authorization Act for 2019. “We
firmly support the relevant Chinese companies in safeguarding their
legitimate rights and interests through legal means, and we will take
all necessary measures to do so,” Hua added. “ We urge the U.S. side to
abandon its Cold-War mentality and zero-sum game mindset, stop
politicizing trade issues and oppressing Chinese companies for no
reason, and contribute to China-U.S. cooperation by making it more sound
and stable.” Yesterday, a Huawei
spokesperson said the news was "not unexpected," but that
the firm will continue to challenge the constitutionality of it in
federal court. "The [National Defense
Administration Ac] and its implementing provisions will do nothing to
ensure the protection of U.S. telecom networks and systems and rather is
a trade barrier based on country-of-origin, invoking punitive action
without any evidence of wrong doing," Huawei said. "Ultimately, it will be rural citizens across the U.S. that will be most
negatively impacted as the networks they use for digital connectivity
rely on Huawei." In May, Trump signed an
exec order that banned US companies from using Huawei equipment;
however, the administration lifted the ban at the beginning of Jul after Trump & Chinese Pres Xi Jinping agreed to a trade ceasefire
at the G-20 summit in Japan.
China decries Trump administration's ban on government business with Huawei
Indian automaker Mahindra & Mahindra said it plans to open a plant in Flint, Michigan, to make
vehicles including mail delivery trucks for the US market, a move that
could create up to 2K jobs. Mahindra already produces its
off-road Roxor vehicle at its manufacturing facility in Auburn Hills,
Michigan, which is at full capacity. “A significant facility expansion is envisioned to support
manufacturing and assembly of new products for the U.S. market,”
Mahindra said. Production of the company's mail
delivery trucks is dependent on Mahindra winning the US
Postal Service's 'next generation delivery vehicle' contract, which will
be announced later this year & 4 other contenders, the company
said. Mahindra said it is also in talks with several other states
that have suitable sites, & its decision could be influenced in part
by the financial incentives that Michigan will provide. “While
we’re keeping our options open, we think the former Buick City site in
Flint would be a great fit for us,” said Rick Haas, CEO of Mahindra Automotive North America. “It’s close to our current facility, which improves overall enterprise efficiency.”
Indian automaker Mahindra considers second US plant in Michigan
Dec gold declined $10.10 (0.7%) to $1509 an ounce, after marking the highest level for the precious metal since 2013 based on most-active contracts. Gold holding above the psychologically important $1500 was seen as a sign that the uptrend remains firmly intact for the precious metals, amid anxieties about the health of the global economy & intl trade clashes between 2 world superpowers. China-US trade tensions softened somewhat early after the People's Bank of China set its daily reference rate for the onshore yuan at the weakest level since 2008, but the currency fixing at 7.0039 per $ was at a slightly weaker level than had been expected, helping to calm some worries that Beijing would use its currency to engage in a more aggressive trade clash with the US. Metals have mostly benefited from weakness in equity markets as investors eschew assets perceived as risky in favor of those considered safe havens like gold & sovereign debt. Consequently, a slide in gov debt to ultra-low & negative rates also has helped to buttress bullion & silver, which don't bear a coupon but tend to rally in times of uncertainty. Risk appetite resurfaced on today, drawing demand away from gold, with the Dow & the S&P 500 each enjoying gains over 1%. The 10-year Treasury note's yield fall steadied today, rising to around 1.718% from 1.675% yesterday, which represented its lowest level since Oct 2016. The brisk climb for metals has stoked some worries that commodities may be vulnerable to a more severe pullback if the $ remains elevated.
Gold ends lower but holds above $1,500; Silver loses grip on $17
Oil prices, which plunged into a bear market this week, reclaimed some of their steep loss today, tracking gains for global stock markets as upbeat news emerged from China. West Texas Intermediate (WTI) crude for Sep delivery snapped back $1.45 (2.8%) to $52.54 a barrel. Its 4.7% plunge to $51.09 yesterday was the lowest settlement for the contract since Jan. Oct Brent crude was up $1.15 (2%) at $57.38 a barrel. It fell 4.6% to $56.23 a day earlier, the lowest finish since Jan. WTI remains off roughly 21% from its 2019 settlement high of $66.30 hit on Apr 23, which by most measures, is a return to bear-market territory. Brent has fallen about 23% since the late-Apr high-water mark. Stock indices after China fixed its onshore currency at a level that was higher than expected and as trade data out of the world's 2nd-largest economy was more upbeat, helping to stabilize jittery global markets for now. Oil prices tumbled yesterday, aggravating what's been the worst start to any month since 2015 for US-priced crude, as the White House's tussles with major trade partners, including large oil consumer China, are seen as a risk to global energy demand. Pres Trump said last week he will slap a 10% tariff on a further $300B in Chinese imports from Sep 1, a move which sent global equity markets into a tailspin before the respite midweek.
Oil bears ease off the selling as China trade, currency developments bring relief to stocks
Just another wild day for the stock market. This time the bulls took command at the opening & did not give that away throughout the session. While there was profit taking in gold, it was mild. Negative thinking investors are still around. The Volatility Index dropped 2+ to the low 17s, but continues above the sub 15 levels that are typical during better times for stocks. More significant price swings lie ahead. But the thought of a rate in Sep is keeping the bulls happy.
Dow Jones Industrials
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