Dow sank 233 decliners over advancers 4-3 & NAZ dropped 63. The MLP index was fractionally higher to the 221s & the REIT index rebounded 2 to the 401s. Junk bond funds fell & Treasuries were heavily purchased. Oil jumped 2+ to the 63s & gold surged 22 to 1551 (more on both below).
AMJ (Alerian MLP Index tracking fund)
Gold prices soared following the US airstrikes against Gen. Qassem Soleimani, head of Iran's elite Quds Force, late yesterday. The yellow metal jumped over 1% to $1,548 an ounce as investors dumped riskier assets, such as stocks, for the safe haven of precious metals. Even before the attacks, the investment picture for gold was bullish after it registered its best year since 2010& strategists expect that to continue. Central banks cut rates a total of 131 times in 2019, compared with just 21 rate hikes. The rate cuts came as the global economy grew at a 3% pace in 2019, according to the IMF, the weakest since the financial crisis. In an effort to combat the slowing global economy, the Federal Reserve, at its Dec meeting, said it expects to keep rates steady throughout 2020 before raising them once in 2021. The Fed's preferred inflation measure, the core Personal Consumption Expenditures price index, rose 1.6% year-over-year in November, which was considerably below its 2% objective.
The US manufacturing sector contracted to its lowest level since the financial crisis, spurring concerns about the health of the overall economy. The ISM Manufacturing Index fell for the 6th month in a row to 47.2 in Dec, down from Nov's reading of 48.1. That's the weakest reading since 2009, when it hit 46.3, & well below the 49 reading that was forecast. Readings above 50 represent expansion in the manufacturing sector, while readings below 50 represent contraction. "Global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the phase-one trade agreement between the U.S. and China," Timothy R. Fiore, chair of Institute for Supply Management, said. The US & China have made significant strides toward potentially ending the bitter trade war, which has culminated in hundreds of Bs of $s in tariffs. In Dec, the world's 2 largest economies announced a preliminary deal, which Pres Trump said will be signed on Jan 15 at the White House. Any progress in the trade war, however, will likely boost near-term growth & send markets higher, the report found.
Oil prices surged 4% following confirmation by the Pentagon that Iran’s top commander was killed in a US airstrike in Baghdad, raising concerns of a bigger conflict between the two countries that could disrupt energy production in the region. The US military took the “decisive defensive action to protect US personnel abroad by killing Qasem Soleimani,” the US Dept of Defense (DOD) said. It was a directive from the pres, the DOD added. Intl benchmark Brent crude surged 3.8% ($2.55) to $68.83 after trading as high as $69.50 at one point. US West Texas Intermediate gained 3.8% ($2.31) to trade at $63.50, its highest level since May. Earlier in the session WTI reached $64.09, its highest level since Apr. Soleimani, who led a special forces unit of Iran's elite Revolutionary Guards, was killed, along with Abu Mahdi al-Muhandis, the deputy commander of Iran-backed militias known as the Popular Mobilization Forces, Iraqi television & officials initially reported. He is a key figure in Iranian politics & has been blamed by the US for this week's attack of the US embassy in Baghdad. Iran has vowed to retaliate against the US, with Iranian Foreign Minister Mohammad Javad Zarif tweeting that “the U.S. bears responsibility for all consequences of its rogue adventurism.” Iranian President Hassan Rouhani said the country's stance against the US will be “more decisive” moving forward, while Defense Minister Amir Hatami reportedly said that “a crushing revenge” will be taken by Iran.
Oil prices surge after US kills Iran’s top commander in airstrike, Brent crude nears $70 a barrel
The news about the airstrike was a jolt to investors. The "experts" are giving their brilliant advice, but nobody really knows where this will take stocks. One thing is certain, demand for safe haven investments, which has been strong for months, is greater than it has been for some time. Gold is near its highs since 2013!!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 63.43 | +2.25 | +3.7% |
| GC=F | Gold | 1,552.10 | +24.00 | +1.6% |
Gold prices soared following the US airstrikes against Gen. Qassem Soleimani, head of Iran's elite Quds Force, late yesterday. The yellow metal jumped over 1% to $1,548 an ounce as investors dumped riskier assets, such as stocks, for the safe haven of precious metals. Even before the attacks, the investment picture for gold was bullish after it registered its best year since 2010& strategists expect that to continue. Central banks cut rates a total of 131 times in 2019, compared with just 21 rate hikes. The rate cuts came as the global economy grew at a 3% pace in 2019, according to the IMF, the weakest since the financial crisis. In an effort to combat the slowing global economy, the Federal Reserve, at its Dec meeting, said it expects to keep rates steady throughout 2020 before raising them once in 2021. The Fed's preferred inflation measure, the core Personal Consumption Expenditures price index, rose 1.6% year-over-year in November, which was considerably below its 2% objective.
Gold surges after US airstrike kills Iran's top general
The US manufacturing sector contracted to its lowest level since the financial crisis, spurring concerns about the health of the overall economy. The ISM Manufacturing Index fell for the 6th month in a row to 47.2 in Dec, down from Nov's reading of 48.1. That's the weakest reading since 2009, when it hit 46.3, & well below the 49 reading that was forecast. Readings above 50 represent expansion in the manufacturing sector, while readings below 50 represent contraction. "Global trade remains the most significant cross-industry issue, but there are signs that several industry sectors will improve as a result of the phase-one trade agreement between the U.S. and China," Timothy R. Fiore, chair of Institute for Supply Management, said. The US & China have made significant strides toward potentially ending the bitter trade war, which has culminated in hundreds of Bs of $s in tariffs. In Dec, the world's 2 largest economies announced a preliminary deal, which Pres Trump said will be signed on Jan 15 at the White House. Any progress in the trade war, however, will likely boost near-term growth & send markets higher, the report found.
US factories give the worst economic omen in a decade
Oil prices surged 4% following confirmation by the Pentagon that Iran’s top commander was killed in a US airstrike in Baghdad, raising concerns of a bigger conflict between the two countries that could disrupt energy production in the region. The US military took the “decisive defensive action to protect US personnel abroad by killing Qasem Soleimani,” the US Dept of Defense (DOD) said. It was a directive from the pres, the DOD added. Intl benchmark Brent crude surged 3.8% ($2.55) to $68.83 after trading as high as $69.50 at one point. US West Texas Intermediate gained 3.8% ($2.31) to trade at $63.50, its highest level since May. Earlier in the session WTI reached $64.09, its highest level since Apr. Soleimani, who led a special forces unit of Iran's elite Revolutionary Guards, was killed, along with Abu Mahdi al-Muhandis, the deputy commander of Iran-backed militias known as the Popular Mobilization Forces, Iraqi television & officials initially reported. He is a key figure in Iranian politics & has been blamed by the US for this week's attack of the US embassy in Baghdad. Iran has vowed to retaliate against the US, with Iranian Foreign Minister Mohammad Javad Zarif tweeting that “the U.S. bears responsibility for all consequences of its rogue adventurism.” Iranian President Hassan Rouhani said the country's stance against the US will be “more decisive” moving forward, while Defense Minister Amir Hatami reportedly said that “a crushing revenge” will be taken by Iran.
Oil prices surge after US kills Iran’s top commander in airstrike, Brent crude nears $70 a barrel
The news about the airstrike was a jolt to investors. The "experts" are giving their brilliant advice, but nobody really knows where this will take stocks. One thing is certain, demand for safe haven investments, which has been strong for months, is greater than it has been for some time. Gold is near its highs since 2013!!
Dow Jones Industrials
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