Dow gained 553 (session high), advancers over decliners 3-1 & NAZ went up 72. The MLP index added 1 to the 146s & the REIT index rose 5 to 340. Junk bond funds continued in demand & Treasuries rose in price. Oil gave back 1+ to the 32s & gold edged up 5 to 1710 (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)
Secretary of State Mike Pompeo reported to Congress that Hong Kong was no longer autonomous from China, a move that could jeopardize the special administrative region's favorable trade relationship with the US & open up Chinese officials to sanctions. The State Dept was required to issue a determination on Hong Kong's autonomy under pro-democracy legislation passed late last year. The law also requires the pres to impose sanctions on foreigners who undermine “fundamental freedoms and autonomy in Hong Kong.” Pompeo's move comes amid a controversy in Hong Kong over a proposed national security law from Beijing that has spurred protests in the streets of the former British colony. The proposed law from China's National People's Congress would effectively bypass Hong Kong's own legislature and targets acts of sedition against the central govt in Beijing. Fears over China's encroachment on the business center's independence have roiled the region for months & contributed to sending Hong Kong's economy into recession last year. “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground,” Pompeo said . “Hong Kong and its dynamic, enterprising, and free people have flourished for decades as a bastion of liberty, and this decision gives me no pleasure. But sound policy making requires a recognition of reality,” Pompeo said. “While the United States once hoped that free and prosperous Hong Kong would provide a model for authoritarian China, it is now clear that China is modeling Hong Kong after itself.” Hong Kong has so far been exempted from the punishing tariffs on exports to the US that the Trump administration has imposed on China as part of Pres Trump's multiyear trade war with the country. That exemption could be eliminated, though it's far from certain it will be. Business groups have warned of negative consequences if Hong Kong were to lose its special status & experts have expressed skepticism that the US will impose substantial costs on China over Hong Kong. The US has a significant financial relationship with Hong Kong. Trade in goods & services between the US & Hong Kong totaled more than $66B in 2018, according to the Office of the US Trade Representative. The State Dept has said that there are more than 1300 US firms doing business in the special administrative region. China hawks in Congress have pressed the administration to move forward with sanctions on Chinese officials. Sen Marco Rubio has said that if China moves forward with its national security legislation, the State Dept would have no choice but to certify that Hong Kong was no longer autonomous and “sanctions should follow.” Tensions between the US & China have been rising as a result of the spreading coronavirus pandemic, which was first reported in Wuhan, China, last year. Officials in both countries, the world's 2 largest economies, have sought to pin blame for the deadly virus on each other.
Restaurant bookings data show U.S. economy is starting to revive after Covid closures
Boeing (BA), a Dow stock, is planning to lay off more than 6K employees this week in an effort to slash costs as the coronavirus pandemic continues to devastate the air travel & aerospace industries. The aircraft manufacturer previously said it is seeking to reduce its head count by 10% thru voluntary & involuntary separations from the company. The company has more than 160K employees. “Following the reduction-in-force announcement we made last month, we have concluded our voluntary layoff (VLO) program,” CEO Dave Calhoun said in a note to employees. “And now we have come to the unfortunate moment of having to start involuntary layoffs (ILO). We’re notifying the first 6,770 of our U.S. team members this week that they will be affected.” Thousands of other employees will be laid off over the next few months & 5520 other employees have been approved for voluntary separations. “I wish there were some other way,” Calhoun added. “For those of you who are notified, I want to offer my personal gratitude for the contributions you have made to Boeing, and I wish you & your families the very best.” The virus has driven down demand for air travel, hurting the airline & leasing customers BA relies on. Airlines are posting their first losses in years & the virus has sapped demand for new planes. The pandemic is an additional crisis for BA. The company had already been struggling with the aftermath of 2 crashes of its 737 Max planes that killed 346. The jetliners, its most popular plane, have been grounded worldwide since shortly after the 2nd crash in Mar 2019. Now, cancellations of orders are piling up. Late last month, BA raised $25B in its largest ever debt sale to help it weather the downturn, a sum that it said allowed it to forgo federal aid. The stock rose 4.77.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing is laying off more than 6,000 employees this week as coronavirus pandemic hurts air travel
The US economy is starting to show some initial signs of increased activity as businesses reopen as the coronavirus pandemic recedes, said New York Federal Reserve Pres John Williams. “I think we’re kind of in a good place...maybe near the bottom in terms of the economic downturn and, hopefully, we’ll start seeing improvement in coming months,” Williams added. “We are seeing people willing to travel a little bit more, we’re seeing retail sales pick up some, especially in areas where restrictions have been lifted,” he added. WIlliams said he expects to see a significant rebound in H2. Asked if the worst was over, Williams replied “we’re pretty close.” “Maybe May or June will be the low point,” he added. Williams said what tools the Fed decides to use depends largely on how the economy evolved. “These are issues that we’re obviously studying very carefully and we’ll be discussing as a group, so I don’t have anything to say about what will and will not happen,” the New York Fed pres said.
U.S. economy is near bottom, poised for rebound, Fed’s Williams says
The US economic downturn caused by the coronavirus pandemic remained in full strength in the middle of May, with activity falling sharply & steep job losses seen, according to the latest survey of economic conditions (the Beige Book) released by the Federal Reserve today. The report, a summary of a survey of business contacts, found that most were pessimistic about the potential pace of recovery. Some sectors, like leisure & hospitality continued to be hit hardest by the stay-at-home orders. Factory activity was down sharply & agricultural conditions were deteriorating. One bright spot was an upturn in auto sales towards the middle of May. Wage pressure was mixed. Pricing pressures varied but “were steady to down modestly” on balance. Economic growth in the Apr-Jun qtr is going to contract at sharp rate. Policy-makers are starting to turn their attention to what happens next. New York Fed Pres John Williams & St Louis Fed Pres James Bullard today said the economy was either at or near bottom & that there would be a rebound in H2.
Fed’s Beige Book says businesses are pessimistic about pace of a recovery
Gold futures pared earlier losses to finish off the session's lows, as tensions between the US & China worsened after Secretary of State Mike Pompeo announced that Hong Kong is no longer considered autonomous from China. Under the US-Hong Kong Policy Act of 1992, the US treats Hong Kong, a semi-autonomous part of China, differently than the mainland in trade, commerce & other areas. An estimated $38B in trade between Hong Kong & the US could be jeopardized, while nearly 300 US companies have regional headquarters in the city. Aug gold, which is now the most-active contract, fell by $1 to settle at $1726 an ounce, off the day's low of $1701. Earlier gold prices fell as US equities rose sharply on yesterday & most were higher again today, finding support from optimism over the easing of lockdowns & by fiscal & monetary stimulus efforts by govs & central banks. That dulled some haven demand for gold.
Oil futures retreated, with benchmark US prices down by nearly 6%, pressured by news reports that said Russia was in favor of easing up on supply cuts as planned in Jul, while simmering tensions between the US & China also weighed on commodities prices. Moscow wants to begin easing production cuts in Jul, in keeping with the terms of the output curbs agreed to by OPEC & its allies earlier this year. West Texas Intermediate crude for Jul fell $1.96 (5.7%,) to $32.39 a barrel. Front-month Jul Brent crude, which expires at the end of Fri's session, was down $1.76 (4.9%) at $34.41 a barrel. Traders also kept an eye on rising tensions in Hong Kong as China looks to impose new security laws that would crush Hong Kong’s autonomy & worsening relations between the US & China.
U.S. oil prices drop nearly 6% as Russia weighs easing supply cuts in July and U.S.-China tensions simmer
Trading began the day with selling in tech shares, taking NAZ lower. However buyers returned bringing the NAZ into the black & taking the Dow above 25K (not seen since early Mar). Investors are following the lead by Fed officials above with high hopes for an H2 economic recovery.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Secretary of State Mike Pompeo reported to Congress that Hong Kong was no longer autonomous from China, a move that could jeopardize the special administrative region's favorable trade relationship with the US & open up Chinese officials to sanctions. The State Dept was required to issue a determination on Hong Kong's autonomy under pro-democracy legislation passed late last year. The law also requires the pres to impose sanctions on foreigners who undermine “fundamental freedoms and autonomy in Hong Kong.” Pompeo's move comes amid a controversy in Hong Kong over a proposed national security law from Beijing that has spurred protests in the streets of the former British colony. The proposed law from China's National People's Congress would effectively bypass Hong Kong's own legislature and targets acts of sedition against the central govt in Beijing. Fears over China's encroachment on the business center's independence have roiled the region for months & contributed to sending Hong Kong's economy into recession last year. “No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground,” Pompeo said . “Hong Kong and its dynamic, enterprising, and free people have flourished for decades as a bastion of liberty, and this decision gives me no pleasure. But sound policy making requires a recognition of reality,” Pompeo said. “While the United States once hoped that free and prosperous Hong Kong would provide a model for authoritarian China, it is now clear that China is modeling Hong Kong after itself.” Hong Kong has so far been exempted from the punishing tariffs on exports to the US that the Trump administration has imposed on China as part of Pres Trump's multiyear trade war with the country. That exemption could be eliminated, though it's far from certain it will be. Business groups have warned of negative consequences if Hong Kong were to lose its special status & experts have expressed skepticism that the US will impose substantial costs on China over Hong Kong. The US has a significant financial relationship with Hong Kong. Trade in goods & services between the US & Hong Kong totaled more than $66B in 2018, according to the Office of the US Trade Representative. The State Dept has said that there are more than 1300 US firms doing business in the special administrative region. China hawks in Congress have pressed the administration to move forward with sanctions on Chinese officials. Sen Marco Rubio has said that if China moves forward with its national security legislation, the State Dept would have no choice but to certify that Hong Kong was no longer autonomous and “sanctions should follow.” Tensions between the US & China have been rising as a result of the spreading coronavirus pandemic, which was first reported in Wuhan, China, last year. Officials in both countries, the world's 2 largest economies, have sought to pin blame for the deadly virus on each other.
Pompeo declares that Hong Kong is no longer autonomous from China, threatening trade with U.S.
New data on the pace of restaurant reservations
show that the national decline in bookings is starting to slow, a
development that could suggest that the food service industry & the
broader US economy may have already endured the worst of the Covid-19
outbreak. Though statistics provided by online reservation
platform OpenTable for May 26 show that the number of seated diners at
its participating restaurants nationwide is down an eye-popping 40%
compared to this time last year, that is still far better than the 100%
slide observed as recently as earlier this month & throughout Apr. The comeback in OpenTable reservations isn't spread evenly across the
country, however, as each state takes a different tact in reopening
portions of their economies. States including Alabama, Arizona & Nebraska, which have approved restaurants to reopen with
restrictions, are seeing year-over-year positive growth in bookings on
OpenTable. Reservations in other states like New York & New
Jersey that have been harder hit by the virus & introduced stricter
business closures to slow the spread of the disease are still down 100%
compared to this time last year. But even early signs that US consumers are willing to book
restaurant tables are good news investors, who have for
weeks only been able to guess at how quick patrons might return after
state restrictions ease. If diners return in numbers & faster than
expected, the sector, & the US economy, may in turn see a faster
return to growth. Traders have pointed to reopening optimism for
the stock market's robust week-to-date rally with the Dow & S&P 500 up 3.1% & 1.5%, respectively.
Stocks that could benefit the most under a full US reopening led the
gains. A
comeback in booking would also come as welcome relief to US food
service workers, who've suffered the brunt of layoffs during the
Covid-19 pandemic. According to the Dept of Labor's
most-recent monthly jobs report, the leisure & hospitality sector (of
which food service is part) lost 7.7M during the month of Apr. That number represented 47% of total positions. The
vast majority of the industry’s layoffs were in food service, where the
gov said nearly 5.5M chefs, waiters, cashiers & other
restaurant staff lost employment.
Restaurant bookings data show U.S. economy is starting to revive after Covid closures
Boeing (BA), a Dow stock, is planning to lay off more than 6K employees this week in an effort to slash costs as the coronavirus pandemic continues to devastate the air travel & aerospace industries. The aircraft manufacturer previously said it is seeking to reduce its head count by 10% thru voluntary & involuntary separations from the company. The company has more than 160K employees. “Following the reduction-in-force announcement we made last month, we have concluded our voluntary layoff (VLO) program,” CEO Dave Calhoun said in a note to employees. “And now we have come to the unfortunate moment of having to start involuntary layoffs (ILO). We’re notifying the first 6,770 of our U.S. team members this week that they will be affected.” Thousands of other employees will be laid off over the next few months & 5520 other employees have been approved for voluntary separations. “I wish there were some other way,” Calhoun added. “For those of you who are notified, I want to offer my personal gratitude for the contributions you have made to Boeing, and I wish you & your families the very best.” The virus has driven down demand for air travel, hurting the airline & leasing customers BA relies on. Airlines are posting their first losses in years & the virus has sapped demand for new planes. The pandemic is an additional crisis for BA. The company had already been struggling with the aftermath of 2 crashes of its 737 Max planes that killed 346. The jetliners, its most popular plane, have been grounded worldwide since shortly after the 2nd crash in Mar 2019. Now, cancellations of orders are piling up. Late last month, BA raised $25B in its largest ever debt sale to help it weather the downturn, a sum that it said allowed it to forgo federal aid. The stock rose 4.77.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing is laying off more than 6,000 employees this week as coronavirus pandemic hurts air travel
The US economy is starting to show some initial signs of increased activity as businesses reopen as the coronavirus pandemic recedes, said New York Federal Reserve Pres John Williams. “I think we’re kind of in a good place...maybe near the bottom in terms of the economic downturn and, hopefully, we’ll start seeing improvement in coming months,” Williams added. “We are seeing people willing to travel a little bit more, we’re seeing retail sales pick up some, especially in areas where restrictions have been lifted,” he added. WIlliams said he expects to see a significant rebound in H2. Asked if the worst was over, Williams replied “we’re pretty close.” “Maybe May or June will be the low point,” he added. Williams said what tools the Fed decides to use depends largely on how the economy evolved. “These are issues that we’re obviously studying very carefully and we’ll be discussing as a group, so I don’t have anything to say about what will and will not happen,” the New York Fed pres said.
U.S. economy is near bottom, poised for rebound, Fed’s Williams says
The US economic downturn caused by the coronavirus pandemic remained in full strength in the middle of May, with activity falling sharply & steep job losses seen, according to the latest survey of economic conditions (the Beige Book) released by the Federal Reserve today. The report, a summary of a survey of business contacts, found that most were pessimistic about the potential pace of recovery. Some sectors, like leisure & hospitality continued to be hit hardest by the stay-at-home orders. Factory activity was down sharply & agricultural conditions were deteriorating. One bright spot was an upturn in auto sales towards the middle of May. Wage pressure was mixed. Pricing pressures varied but “were steady to down modestly” on balance. Economic growth in the Apr-Jun qtr is going to contract at sharp rate. Policy-makers are starting to turn their attention to what happens next. New York Fed Pres John Williams & St Louis Fed Pres James Bullard today said the economy was either at or near bottom & that there would be a rebound in H2.
Fed’s Beige Book says businesses are pessimistic about pace of a recovery
Gold futures pared earlier losses to finish off the session's lows, as tensions between the US & China worsened after Secretary of State Mike Pompeo announced that Hong Kong is no longer considered autonomous from China. Under the US-Hong Kong Policy Act of 1992, the US treats Hong Kong, a semi-autonomous part of China, differently than the mainland in trade, commerce & other areas. An estimated $38B in trade between Hong Kong & the US could be jeopardized, while nearly 300 US companies have regional headquarters in the city. Aug gold, which is now the most-active contract, fell by $1 to settle at $1726 an ounce, off the day's low of $1701. Earlier gold prices fell as US equities rose sharply on yesterday & most were higher again today, finding support from optimism over the easing of lockdowns & by fiscal & monetary stimulus efforts by govs & central banks. That dulled some haven demand for gold.
Gold falls, but settles off session lows as U.S.-China tensions grow over Hong Kong
Oil futures retreated, with benchmark US prices down by nearly 6%, pressured by news reports that said Russia was in favor of easing up on supply cuts as planned in Jul, while simmering tensions between the US & China also weighed on commodities prices. Moscow wants to begin easing production cuts in Jul, in keeping with the terms of the output curbs agreed to by OPEC & its allies earlier this year. West Texas Intermediate crude for Jul fell $1.96 (5.7%,) to $32.39 a barrel. Front-month Jul Brent crude, which expires at the end of Fri's session, was down $1.76 (4.9%) at $34.41 a barrel. Traders also kept an eye on rising tensions in Hong Kong as China looks to impose new security laws that would crush Hong Kong’s autonomy & worsening relations between the US & China.
U.S. oil prices drop nearly 6% as Russia weighs easing supply cuts in July and U.S.-China tensions simmer
Trading began the day with selling in tech shares, taking NAZ lower. However buyers returned bringing the NAZ into the black & taking the Dow above 25K (not seen since early Mar). Investors are following the lead by Fed officials above with high hopes for an H2 economic recovery.
Dow Jones Industrials
No comments:
Post a Comment