Dow shot up 556, advancers over decliners about 2-1 & NAZ added 97. The MLP index was steady in the 122s & the REIT index went up 2 to the 341s. Junk bond funds rose in price & Treasuries continued in demand (more below). Oil was higher & gold slid back 2 to 1811 (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)
Wells Fargo (WFC) posted its first quarterly loss in more than a decade as it socked away money to prepare for a wave of soured loans. The bank lost $2.4B in Q2, compared with a profit of $6.2B a year earlier, as the novel coronavirus continued to pummel the economy. It was the bank's first loss since 2008 & just its 3rd loss of this century. The bank lost 66¢ per share which compares with a forecast for a loss of 16¢. Revenue of $17.8B was down 17% from $21.6B a year earlier. The lender has been hit hard by the economic collapse resulting from the coronavirus pandemic, which has forced many consumers & businesses to seek reprieve on their debt payments. The bank set aside $9.6B to cover potential loan losses in Q2 on top of the $3.83 billion it set aside in Q1. When the pandemic hit, WFC was already struggling to overcome a 4-year-old fake-accounts scandal that has weighed on its business lines. Bowing to the profit pressure, the bank also said it expects to cut its quarterly div to 10¢ from 51¢, subject to approval by its board of directors. The Federal Reserve told banks last month that they couldn't pay divs in excess of their average profits over the last 4 qtrs, causing WFC to say it would trim its div. The stock dropped 1.16.
If you would like to learn more about WFC, click on this link:
club.ino.com/trend/analysis/stock/WFC?a_aid=CD3289&a_bid=6ae5b6f7
U.S. seven-day average of new coronavirus cases surpass 60,000 for the first time
Treasury yields fell as investors looked past an increase in consumer prices amid signs that the prospects for a continued recovery were fading. Consumer prices surged 0.6% in Jun, led by higher gasoline & food prices, after falling 0.1% in May. The core gauge stripping out for food & energy prices rose by a more modest 0.2%. Prospects for fiercer inflation pressures could, in theory, weigh on trading for government bonds, but so far hasn't hurt the prices for long-dated Treasuries as investors anticipate a sluggish recovery during the coronavirus crisis. Tensions between China & the US loomed in the background, adding to the bullish tilt in the bond-market. Beijing announced sanctions against defense company Lockheed Martin (LMT), while DC said it was preparing a paper that would officially reject China's maritime claims in the contested South China Sea. Investors also monitored the coronavirus trajectory in the US, which has reported 3.4M confirmed cases of COVID-19 & at least 136K deaths, according to data aggregated by Johns Hopkins University. The worry is the lack of progress on the medical front is forcing state & local govs to institute stricter lockdown measures that could crimp consumer and business activity. Dallas Federal Reserve Pres Robert Kaplan said the US economy was slowing down after rebounding sharply in May. He attributed the slowdown to the resurgence of COVID-19 & stressed that the public should wear masks.
There is a chance that the unemployment rate could decline sharply in the next 6 months, said St Louis Fed Pres James Bullard. He noted that many Americans still report to the gov that they are on temporary layoff and assume they are going to be recalled. If these workers are recalled the unemployment rate would decline to 4.5%. If the level declines to a more normal level of about 1M workers, the unemployment rate would still decline to 5.1%. “So this suggests that there’s a lot of room, if we play our cards right, to get the unemployment rate way down,” Bullard added. Because of the coronavirus crisis, things can go wrong and the journey is likely to be uneven, Bullard said. The St Louis Fed pres was more upbeat on the outlook than his colleague, Fed Governor Lael Brainard who warned about a weak economic outlook & said the central bank may have to resort to new policy tools to bolster growth. While surveys using new data suggest job growth has slowed in Jun, the economy is still adding jobs although not as fast as in May & Jun, Bullard said. He said the progress in managing the health crisis has been substantial but COVID-19 has been persistent. “We’re certainly past the initial phase of the crisis but the crisis is persistent,” Bullard continued. The St Louis Fed pres that the base case scenario in which the economy “continues to build” from May & Jun is “reasonable,” he said. “We need better execution of a granular risk-based health policy, that will be critical to keep the economy out of depression,” he added. “My base case is that we will be able to accomplish this in next six months and come back to a more normal looking U.S. economy,” he said. The downside risks “remain substantial,” he added.
Fed’s Bullard says there could be sharp drop in unemployment ‘if we play our cards right
Gold futures edged down, but pared much of their earlier losses to settle above the psychologically important $1800-an-ounce level. Prices found support from US-China tensions & the continued rise in COVID-19 cases, but were also pressured by some profit-taking in the wake of a price climb last week to levels not seen since 2011. Gold for Aug fell $1 to settle at $1813 an ounce after trading as low as $1791. Gold remained underpinned by concerns over a continued rise in COVID-19 infections in the US & elsewhere. California Gov Gavin Newsom ordered a rollback of indoor operations at restaurants as well as bars, zoos, wineries, museums & movie theaters. The US death toll stands at 136K & is rising again after it had started to flatten in mid-to-late Apr. There are now 41 states & regions showing increasing cases over a 14-day period. US- China relations are also a factor supporting gold prices. The Trump administration rejected China's claims in the South China Sea, while China announced it was imposing sanctions on Lockheed Martin (LMT) after the US approved a deal for the supply of missile parts to Taiwan. The UK, meanwhile, reversed its policy by banning Chinese telecoms company Huawei.
Gold ends with a modest loss, holding ground above $1,800 an ounce
Oil futures erased earlier losses to end higher, getting a boost from some weakness in $, as traders weighed uncertainty over the next move for OPEC+ on production levels, & a forecast for a weekly decline in US supplies. Prices for oil remained vulnerable to losses in the wake of mounting tensions between the US & China, as well as a continued rise in COVID-19 infections in the US & elsewhere, both of which can hurt energy demand. West Texas Intermediate crude for Aug rose 19¢ (0.5%) to settle at $40.29 a barrel after trading as low as $39.07. Sep Brent crude, the global benchmark, climbed 18¢ (0.4%) at $42.90. The Mon decision by California Gov Gavin Newsom to reverse the reopening of indoor operations at restaurants, bars, movie theaters & other venues in the state dented sentiment & could make a meeting this week by members of the OPEC+ alliance's monitoring committee more interesting. The Joint Ministerial Monitoring Committee, which reviews the report on the oil market prepared by the Joint Technical Committee & oversees compliance with output cuts, will meet tomorrow. An agreement to cut production by 9.7M barrels a day may give way to cuts of 7.7M barrels in Aug as Saudi Arabia & its allies have pushed to stick to that schedule ahead of this week's meeting. In a monthly report released today, OPEC said it now sees 2020 oil demand falling by around 8.9M barrels a day versus a Jun forecast for a fall of around 9M barrels a day. It also said, however, that “uncertainty regarding the outlook assumptions both for this year and the next remain unusually high, particularly with regard to economic growth...as well as the [COVID-19] pandemic developments, related restrictions and their impact on oil consumption.”
Oil end higher as traders weigh uncertainty over next move for OPEC+
There was plenty of excitement for traders to absorb & stocks were purchased. Bank earnings weren't very ugly, but now the corps will give their reports. The coronavirus is the biggest driver for the US economy & it refuses to go away. That causes all kinds of problems, delaying more restrictions for further opening & raising questions about the fall school season. Dow stays near the 26K trend line while gold is holding above 1800.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Wells Fargo (WFC) posted its first quarterly loss in more than a decade as it socked away money to prepare for a wave of soured loans. The bank lost $2.4B in Q2, compared with a profit of $6.2B a year earlier, as the novel coronavirus continued to pummel the economy. It was the bank's first loss since 2008 & just its 3rd loss of this century. The bank lost 66¢ per share which compares with a forecast for a loss of 16¢. Revenue of $17.8B was down 17% from $21.6B a year earlier. The lender has been hit hard by the economic collapse resulting from the coronavirus pandemic, which has forced many consumers & businesses to seek reprieve on their debt payments. The bank set aside $9.6B to cover potential loan losses in Q2 on top of the $3.83 billion it set aside in Q1. When the pandemic hit, WFC was already struggling to overcome a 4-year-old fake-accounts scandal that has weighed on its business lines. Bowing to the profit pressure, the bank also said it expects to cut its quarterly div to 10¢ from 51¢, subject to approval by its board of directors. The Federal Reserve told banks last month that they couldn't pay divs in excess of their average profits over the last 4 qtrs, causing WFC to say it would trim its div. The stock dropped 1.16.
If you would like to learn more about WFC, click on this link:
club.ino.com/trend/analysis/stock/WFC?a_aid=CD3289&a_bid=6ae5b6f7
Wells Fargo posts first loss in more than a decade
The US for the first time surpassed more than 60K new coronavirus
cases yesterday, based on an average of new cases per day over the
previous 7 days, compiled by
Johns Hopkins University. Across the country, more than 1/3
of US states reported record highs in daily new cases, based on a 7-day moving average. 20 states,
including Florida & Georgia, broke records yesterday with an average
of 10,855 & 3358 new cases, respectively. As the number of Covid-19 cases continue to surge in the US, labs in the US are falling behind in processing & delivering test results. “We
attribute this demand primarily to the rapid, continuing spread of
COVID-19 infections across the nation but particularly in the South,
Southwest and West regions of the country,” Quest Diagnostics said. The lab company said it can now perform up to 125K tests per day, roughly double its capacity compared with 2 months ago. Despite the dramatic increase, demand for testing is “increasing even faster,” the company added.
U.S. seven-day average of new coronavirus cases surpass 60,000 for the first time
Treasury yields fell as investors looked past an increase in consumer prices amid signs that the prospects for a continued recovery were fading. Consumer prices surged 0.6% in Jun, led by higher gasoline & food prices, after falling 0.1% in May. The core gauge stripping out for food & energy prices rose by a more modest 0.2%. Prospects for fiercer inflation pressures could, in theory, weigh on trading for government bonds, but so far hasn't hurt the prices for long-dated Treasuries as investors anticipate a sluggish recovery during the coronavirus crisis. Tensions between China & the US loomed in the background, adding to the bullish tilt in the bond-market. Beijing announced sanctions against defense company Lockheed Martin (LMT), while DC said it was preparing a paper that would officially reject China's maritime claims in the contested South China Sea. Investors also monitored the coronavirus trajectory in the US, which has reported 3.4M confirmed cases of COVID-19 & at least 136K deaths, according to data aggregated by Johns Hopkins University. The worry is the lack of progress on the medical front is forcing state & local govs to institute stricter lockdown measures that could crimp consumer and business activity. Dallas Federal Reserve Pres Robert Kaplan said the US economy was slowing down after rebounding sharply in May. He attributed the slowdown to the resurgence of COVID-19 & stressed that the public should wear masks.
10-year Treasury yield hovers above 0.6% as investors anticipate dimming economic outlook
There is a chance that the unemployment rate could decline sharply in the next 6 months, said St Louis Fed Pres James Bullard. He noted that many Americans still report to the gov that they are on temporary layoff and assume they are going to be recalled. If these workers are recalled the unemployment rate would decline to 4.5%. If the level declines to a more normal level of about 1M workers, the unemployment rate would still decline to 5.1%. “So this suggests that there’s a lot of room, if we play our cards right, to get the unemployment rate way down,” Bullard added. Because of the coronavirus crisis, things can go wrong and the journey is likely to be uneven, Bullard said. The St Louis Fed pres was more upbeat on the outlook than his colleague, Fed Governor Lael Brainard who warned about a weak economic outlook & said the central bank may have to resort to new policy tools to bolster growth. While surveys using new data suggest job growth has slowed in Jun, the economy is still adding jobs although not as fast as in May & Jun, Bullard said. He said the progress in managing the health crisis has been substantial but COVID-19 has been persistent. “We’re certainly past the initial phase of the crisis but the crisis is persistent,” Bullard continued. The St Louis Fed pres that the base case scenario in which the economy “continues to build” from May & Jun is “reasonable,” he said. “We need better execution of a granular risk-based health policy, that will be critical to keep the economy out of depression,” he added. “My base case is that we will be able to accomplish this in next six months and come back to a more normal looking U.S. economy,” he said. The downside risks “remain substantial,” he added.
Fed’s Bullard says there could be sharp drop in unemployment ‘if we play our cards right
Gold futures edged down, but pared much of their earlier losses to settle above the psychologically important $1800-an-ounce level. Prices found support from US-China tensions & the continued rise in COVID-19 cases, but were also pressured by some profit-taking in the wake of a price climb last week to levels not seen since 2011. Gold for Aug fell $1 to settle at $1813 an ounce after trading as low as $1791. Gold remained underpinned by concerns over a continued rise in COVID-19 infections in the US & elsewhere. California Gov Gavin Newsom ordered a rollback of indoor operations at restaurants as well as bars, zoos, wineries, museums & movie theaters. The US death toll stands at 136K & is rising again after it had started to flatten in mid-to-late Apr. There are now 41 states & regions showing increasing cases over a 14-day period. US- China relations are also a factor supporting gold prices. The Trump administration rejected China's claims in the South China Sea, while China announced it was imposing sanctions on Lockheed Martin (LMT) after the US approved a deal for the supply of missile parts to Taiwan. The UK, meanwhile, reversed its policy by banning Chinese telecoms company Huawei.
Gold ends with a modest loss, holding ground above $1,800 an ounce
Oil futures erased earlier losses to end higher, getting a boost from some weakness in $, as traders weighed uncertainty over the next move for OPEC+ on production levels, & a forecast for a weekly decline in US supplies. Prices for oil remained vulnerable to losses in the wake of mounting tensions between the US & China, as well as a continued rise in COVID-19 infections in the US & elsewhere, both of which can hurt energy demand. West Texas Intermediate crude for Aug rose 19¢ (0.5%) to settle at $40.29 a barrel after trading as low as $39.07. Sep Brent crude, the global benchmark, climbed 18¢ (0.4%) at $42.90. The Mon decision by California Gov Gavin Newsom to reverse the reopening of indoor operations at restaurants, bars, movie theaters & other venues in the state dented sentiment & could make a meeting this week by members of the OPEC+ alliance's monitoring committee more interesting. The Joint Ministerial Monitoring Committee, which reviews the report on the oil market prepared by the Joint Technical Committee & oversees compliance with output cuts, will meet tomorrow. An agreement to cut production by 9.7M barrels a day may give way to cuts of 7.7M barrels in Aug as Saudi Arabia & its allies have pushed to stick to that schedule ahead of this week's meeting. In a monthly report released today, OPEC said it now sees 2020 oil demand falling by around 8.9M barrels a day versus a Jun forecast for a fall of around 9M barrels a day. It also said, however, that “uncertainty regarding the outlook assumptions both for this year and the next remain unusually high, particularly with regard to economic growth...as well as the [COVID-19] pandemic developments, related restrictions and their impact on oil consumption.”
Oil end higher as traders weigh uncertainty over next move for OPEC+
There was plenty of excitement for traders to absorb & stocks were purchased. Bank earnings weren't very ugly, but now the corps will give their reports. The coronavirus is the biggest driver for the US economy & it refuses to go away. That causes all kinds of problems, delaying more restrictions for further opening & raising questions about the fall school season. Dow stays near the 26K trend line while gold is holding above 1800.
Dow Jones Industrials
No comments:
Post a Comment