Dow dropped 309, decliners over advnacers 5-2 & NAZ fell 34. The MLP index went up 2+ to 146 & the REIT index was steady in the 352s. Junk bond funds slid lower & Treasuries rose in price. Oil slid back to the 35s & gold was off 10 to 1726.
AMJ (Alerian MLP Index tracking fund)
Manufacturing activity snapped back to life in the New York area this month & optimism for future activity hit its highest level in almost 11 years. The Empire State Manufacturing Survey posted a reading of -0.2 in Jun after hitting record lows in the previous 2 months. The gauge, which measures the percentage firms reporting expansion against those seeing contraction, is up 48.3 points from May. The forecast called for a reading of -35. Monthly improvement came across the board, especially in the index of future business conditions. That level rose to 56.5, its highest level since 2009 as 68.6% of firms see expansion ahead against just 12.1% that see contraction. The Jun reading represents a rise off the bottom reached as the coronavirus pandemic crushed the regional economy, but overall still reflects a standstill in growth vs. the sharp contractions seen in the past 2 months. Big gains also came from new orders, which surged from -42.4 to -0.6; shipments, which rose 42.3 points to 3.3 & prices paid, up 12.8 points to 16.9. Number of employees also showed an uptick, going from -6.1 to -3.5, though still in contraction territory. The improving conditions come in a region that's one of the slowest in the US to reopen its economy from the coronavirus crisis. New York City in particular was one of the hardest-hit spots in the world, with the 17K deaths accounting for about 15% of the nation’s total.
New York region manufacturing activity shows sharp rebound after record lows
China's factories stepped up production for a 2nd straight month in May, as the country shook off the economic torpor of the coronavirus, although the weaker-than-expected gain suggested the recovery remained fragile. Patchy data also showed sustained contractions in retail sales & investment, a sign many sectors were still struggling with the effects of heavy shutdowns across the economy earlier this year. Global leaders are closely watching China to see how long it takes to get back on its feet as they begin to relax their own stringent anti-virus measures & reboot their economies. Signs of improvement continue to be seen in China ranging from steel production & car sales to more lights being turned on in industrial parks. However, it could take many months for broader activity to return to pre-crisis levels. "Industrial production is on the whole getting better, but there are still quite a few difficulties and uncertainties," said Jiang Yuan, an official at the National Bureau of Statistics. Industrial output growth quickened to 4.4% in May from a year earlier, the highest reading since Dec. The forecast called for a 5.0% rise from 3.9% in Apr, the first expansion since the virus emerged in China late last year. But a collapse in export orders amid global lockdowns has left factories more reliant on domestic demand, which is recovering at a more sluggish pace. Retail sales fell for a 4th straight month. While the 2.8% drop was smaller than the 7.5% slump in Apr, it was larger than the 2.0% fall tipped by analysts. Heavy job losses & fears of a 2nd wave of infections have kept consumers cautious. Fixed asset investment fell 6.3% in Jan-May from the same period last year, compared with a forecast 5.9% fall & a 10.3% decline in the first 4 months of the year. As in past downturns, Beijing is banking on higher infrastructure spending to lead a recovery, & steel mills have cranked up furnaces to over 92% of capacity. Private sector fixed-asset investment, which accounts for 60% of total investment, fell 9.6% in Jan-May, compared with a 13.3% decline in the first 4 months of the year. China's GDP shrank 6.8% in Q1, the first contraction on record. Highlighting the uncertain outlook, the gov did not set a GDP growth target at its annual parliament gathering in May, the first time in nearly 2 decades it has not done so. But some saw May's factory data pointing to a more optimistic outlook than previously feared.
Dr. Scott Gottlieb warns U.S. coronavirus hot spots ‘could quickly get out of control’
The recent rally in stock prices got ahead of itself. In less than 10 weeks, the Dow surged 9K & in just 1 week, it has pulled back over 2K. The recovery will be bumpy & investors need to keep that in mind, especially with fears about the virus spreading. Turbulent conditions in the economy will bring higher volatility for stocks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 35.12 | -1.14 | -3.1% |
| GC=F | Gold | 1,719.60 | -17.70 | -1.0% |
Manufacturing activity snapped back to life in the New York area this month & optimism for future activity hit its highest level in almost 11 years. The Empire State Manufacturing Survey posted a reading of -0.2 in Jun after hitting record lows in the previous 2 months. The gauge, which measures the percentage firms reporting expansion against those seeing contraction, is up 48.3 points from May. The forecast called for a reading of -35. Monthly improvement came across the board, especially in the index of future business conditions. That level rose to 56.5, its highest level since 2009 as 68.6% of firms see expansion ahead against just 12.1% that see contraction. The Jun reading represents a rise off the bottom reached as the coronavirus pandemic crushed the regional economy, but overall still reflects a standstill in growth vs. the sharp contractions seen in the past 2 months. Big gains also came from new orders, which surged from -42.4 to -0.6; shipments, which rose 42.3 points to 3.3 & prices paid, up 12.8 points to 16.9. Number of employees also showed an uptick, going from -6.1 to -3.5, though still in contraction territory. The improving conditions come in a region that's one of the slowest in the US to reopen its economy from the coronavirus crisis. New York City in particular was one of the hardest-hit spots in the world, with the 17K deaths accounting for about 15% of the nation’s total.
New York region manufacturing activity shows sharp rebound after record lows
China's factories stepped up production for a 2nd straight month in May, as the country shook off the economic torpor of the coronavirus, although the weaker-than-expected gain suggested the recovery remained fragile. Patchy data also showed sustained contractions in retail sales & investment, a sign many sectors were still struggling with the effects of heavy shutdowns across the economy earlier this year. Global leaders are closely watching China to see how long it takes to get back on its feet as they begin to relax their own stringent anti-virus measures & reboot their economies. Signs of improvement continue to be seen in China ranging from steel production & car sales to more lights being turned on in industrial parks. However, it could take many months for broader activity to return to pre-crisis levels. "Industrial production is on the whole getting better, but there are still quite a few difficulties and uncertainties," said Jiang Yuan, an official at the National Bureau of Statistics. Industrial output growth quickened to 4.4% in May from a year earlier, the highest reading since Dec. The forecast called for a 5.0% rise from 3.9% in Apr, the first expansion since the virus emerged in China late last year. But a collapse in export orders amid global lockdowns has left factories more reliant on domestic demand, which is recovering at a more sluggish pace. Retail sales fell for a 4th straight month. While the 2.8% drop was smaller than the 7.5% slump in Apr, it was larger than the 2.0% fall tipped by analysts. Heavy job losses & fears of a 2nd wave of infections have kept consumers cautious. Fixed asset investment fell 6.3% in Jan-May from the same period last year, compared with a forecast 5.9% fall & a 10.3% decline in the first 4 months of the year. As in past downturns, Beijing is banking on higher infrastructure spending to lead a recovery, & steel mills have cranked up furnaces to over 92% of capacity. Private sector fixed-asset investment, which accounts for 60% of total investment, fell 9.6% in Jan-May, compared with a 13.3% decline in the first 4 months of the year. China's GDP shrank 6.8% in Q1, the first contraction on record. Highlighting the uncertain outlook, the gov did not set a GDP growth target at its annual parliament gathering in May, the first time in nearly 2 decades it has not done so. But some saw May's factory data pointing to a more optimistic outlook than previously feared.
China's factory output perks up but consumers stay cautious
If states that are experiencing flare-ups in coronavirus infections fail to take the necessary steps to address the spread, local outbreaks could “quickly get out of control,” former Food & Drug Administration Commissioner Dr Scott Gottlieb said. States like Arizona, Texas & Florida that are seeing surges in confirmed cases, as well as spikes in hospitalizations, should in some cases be conducting aggressive contact tracing, Gottlieb said. Contact tracing occurs when trained personnel interview infected individuals to pinpoint where they were infected & to track down others who might have been exposed. “We’re not going to be able to shut down the country again this summer. We’re probably not going to be able to shut down the country again this fall,” Gottlieb added. “And so we’re going to need to try to isolate the sources of these outbreaks and take targeted steps. If we can’t do that, these will get out of control.” Nationally, the virus continues to infect about 20K each day, a higher rate of infection than in many other countries that also grappled with large outbreaks. He noted that come autumn, other countries might place travel restrictions on Americans because of the high level of persistent spread. “We seem to be complacent, to some degree, with 20,000 cases a day. That’s an awful lot of infection,” he said. “That’s why we’re seeing these flare-ups and these outbreaks. This is going to become the new norm — these kinds of sprawling outbreaks — if we continue to have this level of infection around the country.” In lieu of shutting down much of the economy & restricting movement again, Gottlieb said contact tracing & targeted responses will be key to the US response. Different states have made various commitments to contact tracing efforts, & the federal gov has yet to outline specific criteria that states should strive to meet, such as the number of tracers per 100K residents.
Dr. Scott Gottlieb warns U.S. coronavirus hot spots ‘could quickly get out of control’
The recent rally in stock prices got ahead of itself. In less than 10 weeks, the Dow surged 9K & in just 1 week, it has pulled back over 2K. The recovery will be bumpy & investors need to keep that in mind, especially with fears about the virus spreading. Turbulent conditions in the economy will bring higher volatility for stocks.
Dow Jones Industrials
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