Dow dropped 126, decliners modestly ahead advancers & NAZ fell 24. The MLP index pulled back 1+ to the 222s & the REIT index rose 3+ to the 403s. Junk bond funds were slightly elevated & Treasuries rose in price. Oil declined in the 59s & gold went up 6 to 1561 (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)
The US is hitting Iran with fresh sanctions in response to the Islamic Republic's missile attacks against American forces housed at Iraqi bases. “President Trump is delivering on the pledge that he made the day after Iran attacked American forces in Iraq," Secretary of State Mike Pompeo said today. "The goal of our campaign is to deny the regime the resources to conduct its destructive foreign policy. We want Iran to simply behave like a normal nation. We believe the sanctions that we imposed today further that strategic objective." New penalties will be imposed against any individual owning, operating, trading with or assisting sectors of the Iranian economy, including construction, manufacturing, textiles & mining, Treasury Secretary Steve Mnuchin announced, adding that the sanctions will be both primary & secondary. 17 additional sanctions will be placed on Iran's largest steel & iron manufacturers, 3 Seychelles-based entities & a vessel involved in the transfer of product, which will “cut off billions of support to Iranian regime,” he said. Finally, the US will place penalties on 8 senior Iranian officials involved in its missile attack. The administration's sanctions have already taken a toll on Iran’s economy. The Islamic Republic was the world's 5th-largest oil producer in 2017, but its rank has fallen since. Iran's real GDP declined about 10% in 2019, according to IMF data. Last Sep, the Trump administration placed additional sanctions on Iran's central bank & its sovereign wealth fund. A few months before that, sanctions were imposed on the country's supreme leader, Ayatollah Ali Khamenei & top diplomats. Pompeo said the sanctions have wiped out 80% of Iran's oil revenue & blocked the Islamic Republic's actions. These actions "are part of our commitment to stop the Iranian regime's global terrorist activities," Mnuchin said. "The president has been very clear. We will continue to apply economic sanctions until Iran stops its terrorist activities and commits that it will never have nuclear weapons." Tough economic sanctions are a different approach than what was taken by the Obama administration, which crafted the 2015 Joint Comprehensive Plan of Action, or Iran nuclear deal, along with 5 other countries: China, France, Russia, Germany & the UK. Under the accord, Iran agreed to limit its development of nuclear capabilities for 15 years. Pres Trump, who withdrew the US from the deal in May 2018, repeatedly slammed the pact, calling it "defective at its core."
Gold futures ended higher, finding support from weaker-than-expected monthly US jobs data to score a 3rd weekly climb, even as easing tensions in Middle East worked to dull haven demand for the precious metal. Feb gold tacked on $5.80 (0.4%) to settle at $1560 an ounce. Prices had climbed to as high as $1613 on an intraday basis Wed, the highest since 2013. For the week, the most-active gold futures contract gained about 0.5%, which marked their 3rd weekly rise in a row, but perhaps more telling is gold's nearly 4.4% peak-to-trough move over the week. The backsliding in the precious commodity and jump in stocks over the 5-session stretch follows a lessening of Middle East tensions that has restored risk appetite & produced a major drag on precious metals. On Wed Pres Trump delivered remarks that underscored a move toward peace after a late-Tues Iranian airstrike on US air bases in Iraq in an apparent retaliation for the killing of Iranian Maj Gen. Qassem Soleimani a week ago. Separately, A Chinese envoy is set to go to DC on Mon-Wed to firm up a phase-one trade agreement. Equity markets, which often move in the opposite direction of gold, were mixed, with the Dow &trading lower after tapping a record above 29K & the S&P 500 index & the NAZ trading modestly higher as gold futures settled. Gold prices saw volatile trading after the release of the Dec employment report, before gradually making a climb toward the session high. The data showed showed the US economy created a smaller-than-expected 145K jobs in the final month of 2019, while the unemployment rate was unchanged at 3.5%. The forecast called for 165K, a sharp drop-off after a surprisingly robust 256K gain in Nov.
Oil futures declined, with prices posting their biggest weekly percentage fall in at least 5 months, as fears of a wider US-Iran confrontation faded & data earlier this week showed a rise in US crude inventories. West Texas Intermediate (WTI) crude for Feb delivery lost 52¢ (0.9%) to settle at $59.04 a barrel, while Mar Brent crude finished at $64.98 a barrel, down 39¢ (0.6%). WTI, the US benchmark, was off 6.4% for the week, the biggest weekly percentage loss for a most active contract since Jul, the global benchmark, was off 5.3% for the week, which was the biggest such decline since Aug. Crude prices have dropped back below levels seen ahead of the US airstrike in Iraq last week that killed Iranian military commander Qassem Soleimani. Iran responded earlier this week with missile strikes aimed at bases housing US forces in Iraq. The attacks produced no US casualties & Pres Trump on Wed indicated he was uninterested in further escalation of the conflict. The Energy Information Administration on Wed said US crude inventories rose 1.2M barrels last week, defying forecasts for a decline, while supplies of gasoline & distillates showed bigger-than-expected increases. Meanwhile, weekly data from Baker Hughes today revealed a 3rd consecutive weekly decline in the number of active US oil rigs, implying a potential production slowdown. Oil futures traded little changed in the immediate wake of the release of the US Dec employment report, then moved lower. The report showed the US economy created a smaller-than-expected 145K jobs in the final month of 2019, while the unemployment rate was unchanged at 3.5%. The forecast called for 165K, with Wall Street expectations of a drop-off after a surprisingly robust 256K gain in Nov.
The jobs numbers for Dec should not disturb the longer trend of a growing US economy. Next week, there should bing a lot of excitement with the arrival of the Chinese delegation to sign phase 1 of the trade deal. Meanwhile, the Dow went over 29K today & can be expected to make another assault on it next Mon
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The US is hitting Iran with fresh sanctions in response to the Islamic Republic's missile attacks against American forces housed at Iraqi bases. “President Trump is delivering on the pledge that he made the day after Iran attacked American forces in Iraq," Secretary of State Mike Pompeo said today. "The goal of our campaign is to deny the regime the resources to conduct its destructive foreign policy. We want Iran to simply behave like a normal nation. We believe the sanctions that we imposed today further that strategic objective." New penalties will be imposed against any individual owning, operating, trading with or assisting sectors of the Iranian economy, including construction, manufacturing, textiles & mining, Treasury Secretary Steve Mnuchin announced, adding that the sanctions will be both primary & secondary. 17 additional sanctions will be placed on Iran's largest steel & iron manufacturers, 3 Seychelles-based entities & a vessel involved in the transfer of product, which will “cut off billions of support to Iranian regime,” he said. Finally, the US will place penalties on 8 senior Iranian officials involved in its missile attack. The administration's sanctions have already taken a toll on Iran’s economy. The Islamic Republic was the world's 5th-largest oil producer in 2017, but its rank has fallen since. Iran's real GDP declined about 10% in 2019, according to IMF data. Last Sep, the Trump administration placed additional sanctions on Iran's central bank & its sovereign wealth fund. A few months before that, sanctions were imposed on the country's supreme leader, Ayatollah Ali Khamenei & top diplomats. Pompeo said the sanctions have wiped out 80% of Iran's oil revenue & blocked the Islamic Republic's actions. These actions "are part of our commitment to stop the Iranian regime's global terrorist activities," Mnuchin said. "The president has been very clear. We will continue to apply economic sanctions until Iran stops its terrorist activities and commits that it will never have nuclear weapons." Tough economic sanctions are a different approach than what was taken by the Obama administration, which crafted the 2015 Joint Comprehensive Plan of Action, or Iran nuclear deal, along with 5 other countries: China, France, Russia, Germany & the UK. Under the accord, Iran agreed to limit its development of nuclear capabilities for 15 years. Pres Trump, who withdrew the US from the deal in May 2018, repeatedly slammed the pact, calling it "defective at its core."
Trump slams Iran with new sanctions
Gold futures ended higher, finding support from weaker-than-expected monthly US jobs data to score a 3rd weekly climb, even as easing tensions in Middle East worked to dull haven demand for the precious metal. Feb gold tacked on $5.80 (0.4%) to settle at $1560 an ounce. Prices had climbed to as high as $1613 on an intraday basis Wed, the highest since 2013. For the week, the most-active gold futures contract gained about 0.5%, which marked their 3rd weekly rise in a row, but perhaps more telling is gold's nearly 4.4% peak-to-trough move over the week. The backsliding in the precious commodity and jump in stocks over the 5-session stretch follows a lessening of Middle East tensions that has restored risk appetite & produced a major drag on precious metals. On Wed Pres Trump delivered remarks that underscored a move toward peace after a late-Tues Iranian airstrike on US air bases in Iraq in an apparent retaliation for the killing of Iranian Maj Gen. Qassem Soleimani a week ago. Separately, A Chinese envoy is set to go to DC on Mon-Wed to firm up a phase-one trade agreement. Equity markets, which often move in the opposite direction of gold, were mixed, with the Dow &trading lower after tapping a record above 29K & the S&P 500 index & the NAZ trading modestly higher as gold futures settled. Gold prices saw volatile trading after the release of the Dec employment report, before gradually making a climb toward the session high. The data showed showed the US economy created a smaller-than-expected 145K jobs in the final month of 2019, while the unemployment rate was unchanged at 3.5%. The forecast called for 165K, a sharp drop-off after a surprisingly robust 256K gain in Nov.
Gold futures tally a third weekly rise
Oil futures declined, with prices posting their biggest weekly percentage fall in at least 5 months, as fears of a wider US-Iran confrontation faded & data earlier this week showed a rise in US crude inventories. West Texas Intermediate (WTI) crude for Feb delivery lost 52¢ (0.9%) to settle at $59.04 a barrel, while Mar Brent crude finished at $64.98 a barrel, down 39¢ (0.6%). WTI, the US benchmark, was off 6.4% for the week, the biggest weekly percentage loss for a most active contract since Jul, the global benchmark, was off 5.3% for the week, which was the biggest such decline since Aug. Crude prices have dropped back below levels seen ahead of the US airstrike in Iraq last week that killed Iranian military commander Qassem Soleimani. Iran responded earlier this week with missile strikes aimed at bases housing US forces in Iraq. The attacks produced no US casualties & Pres Trump on Wed indicated he was uninterested in further escalation of the conflict. The Energy Information Administration on Wed said US crude inventories rose 1.2M barrels last week, defying forecasts for a decline, while supplies of gasoline & distillates showed bigger-than-expected increases. Meanwhile, weekly data from Baker Hughes today revealed a 3rd consecutive weekly decline in the number of active US oil rigs, implying a potential production slowdown. Oil futures traded little changed in the immediate wake of the release of the US Dec employment report, then moved lower. The report showed the US economy created a smaller-than-expected 145K jobs in the final month of 2019, while the unemployment rate was unchanged at 3.5%. The forecast called for 165K, with Wall Street expectations of a drop-off after a surprisingly robust 256K gain in Nov.
Oil posts biggest weekly percentage drop in at least 5 months as Mideast fears fade
The jobs numbers for Dec should not disturb the longer trend of a growing US economy. Next week, there should bing a lot of excitement with the arrival of the Chinese delegation to sign phase 1 of the trade deal. Meanwhile, the Dow went over 29K today & can be expected to make another assault on it next Mon
Dow Jones Industrials
No comments:
Post a Comment