Dow dropped 182 (early losses were trimmed by buying into the close), decliners over advancers 2-1 & NAZ fell 98. The MLP index lost 1 to the 129s & the REIT index fell 2+ to the 344s. Junk bond funds inched higher & Treasuries saw a little selling. Oil crawled higher in the 41s & gold set a new record close, up 8 to 1898 (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)
Sales of new homes rose a sharp 13,8% in Jun, the 2nd straight increase after 2 months when sales plunged as the country went into lockdown because of the coronavirus. The Commerce Dept reported that the Jun gain pushed sales of new homes to a seasonally adjusted annual rate of 776K, a better-than-expected performance. The increase follows a 19.4% jump in May. The 2 months of sales gains followed 2 months of sharp declines in sales in Mar & Apr as much of the country went into lockdown. A separate report Wed showed sales of previously owned homes surged 20.7% in June to a seasonally adjusted annual rate of 4.7M. Even with the gain, which followed 3 months of declines, new home sales remain toughly 20% below pre-pandemic levels. The median price of a new home sold in Jun increased to $329K, up 5.6% from a year ago. Economists are hoping for a further rebound in sales in coming months but caution that this expectation depends heavily on the course of the coronavirus. A recent resurgence in cases has caused some states to rollback their reopening plans. Sales are being helped by ultra-low mortgage rates which earlier this month dropped below 3% for a 30-year-fixed rate mortgage for the first time in nearly 50 years. Economists believe low rates & changes in home preferences brought on by the pandemic will combine to support further sales gains this year. In Jun, sales were up in all parts of the country with the biggest gain coming in the Northeast, a surge of 89.7%. Sales rose 18% in the West, 10.5% in the Midwest & 7.2% in the South.
Verizon (VZ), a Dow stock, continued to add cellphone customers during the pandemic, though quarterly revenue declined in its core wireless business and its online advertising unit. The largest US cellphone carrier by subscribers reported a net gain of 173K postpaid phone connections during Q2. That figure included past-due accounts that were still in service under the federal Keep Americans Connected pledge. VA counted almost 19M active wireless connections, which include tablets, smartwatches & other cellular devices, at the end of Jun. VA, which temporarily closed its retail stores as the coronavirus pandemic spread across the US, said its device-upgrade rate fell to 3.7% from 4.3% a year earlier as weak retail traffic crimped smartphone sales. The company said more than 60% of its locations were open by the end of Q2 & it expects to be close to fully open by the end of Jul. Overall, the company's total revenue slipped 5.1% to $30.4B. Wireless-service revenue fell 1.7% in Q2 from a year ago, but the company forecast it would be flat to down 1% in Q3. Revenue in the company's media business, which includes its Yahoo & AOL properties, declined 25% to $1.4B. EPS was $1.13, compared 95¢ a year earlier. Fewer phone sales helped boost the bottom line because devices sold to customers offer carriers little to no profit. Total equipment costs dropped 18%. The Covid-19 pandemic upended companies' profit projections this spring & forced many to set aside more cash for unexpected expenses. The company earlier this year pulled its revenue guidance & lowered its annual adjusted per-share profit projection to between 2% growth to 2% decline. The stock went up 1.01.
If you would like to learn more about VZ, click on this link:
club.ino.com/trend/analysis/stock/VZ?a_aid=CD3278&a_bid=6ae5b6f7
Schlumberger (SLB) said it had a net loss of $2.47 per share, in Q2 wich compares with EPS of 35¢ a year ago. Excluding charges & credits, the oil company had adjusted EPS of 5¢, ahead of the consensus estimate for a loss of a penny. Revenue tumbled 35% to $5.4B from $8.3B & below the $5.37B consensus. "This has probably been the most challenging quarter in past decades," CEO Olivier Le Peuch said. Revenue fell 28% from Q1, "caused by the unprecedented fall in North America activity, and international activity drop due to downward revisions to customer budgets accentuated by COVID-19 disruptions. This speaks volumes about an industry confronted with historic oil demand and supply imbalances caused by demand destruction from the global COVID-19 containment effort." North America revenue slid 48% from Q1 as customers cut back spending. Intl revenue was down 60% from Q1, with Latin America & Africa seeing the worst declines due to COVID-19 restrictions and the drop in deepwater activity, he said. The company is reorganizing & combining its 17 product lines into 4 divisions, restructuring geographically around 5 key basins of activity and streamlining management. It is cutting 21K jobs. SLB expects to remove $1.5B of costs permanently. "Looking at the macro view in the near-term, oil demand is slowly starting to normalize and is expected to improve as government measures support consumption," said the CEO. "However, subsequent waves of potential COVID-19 resurgence pose a negative risk to this outlook." The stock gained 19¢.
If you would like to learn more about SLB, click on this link:
club.ino.com/trend/analysis/stock/SLB?a_aid=CD3278&a_bid=6ae5b6f7
Gold futures scored a record finish, with prices up almost 5% for the week, as rising US-China tensions & jitters about the economic outlook fueled haven-related demand for the precious metal. China ordered the US to close its consulate in the western city of Chengdu, the latest salvo in a dispute between DC & Beijing. The US earlier this week ordered China to close its Houston consulate, alleging Chinese agents had tried to steal data from facilities in Texas. Aug gold, the most actively traded contract, climbed $7 (0.4%) to settle at $1897 an ounce. That surpassed the all-time closing high of $1891 for a most active contract set in Aug 2011. The all-time intraday high for a most actively traded contract stands at $1923 an ounce from Sep 6, 2011. Today, Aug gold climbed to as high as $1904 & for the week, based on the most-active contracts, gold futures saw a 4.8% gain.
Oil futures ended with a modest gain, with US prices up more than 1% for the week, as investors weigh some signs of economic improvement against tensions between the world's biggest economic superpowers, both of which may influence global energy demand. Traders also continued to eye the impact of rising cases of COVID-19 in parts of the world, which could lead to business disruptions and a slowdown in economic recovery. The economic data out of Europe helped to inject some optimism in markets about oil demand. The eurozone manufacturing PMI rose to 51.1 from 47.4 in Jun & the services PMI rose to 55.1 from 48.3 in Jun, as the composite PMI of 54.8, a 25-month high. West Texas Intermediate (WTI) crude for Sep tacked on 22¢ (0.5%) to settle at $41.29 a barrel, after declining 2% yesterday. Sep Brent crude inched up by 3¢ to $43.34 a barrel, following a 2.2% skid in the previous session. For the week, front-month WTI futures saw a 1.3% weekly gain & Brent rose 0.5%. Pres Trump also added to a sense of iciness forming between the nations when he said last evening that the trade pact forged between the 2 countries last year & signed earlier this year “means much less” to him than it did before. The US has accused China of mishandling the COVID-19 outbreak, which was first identified in Wuhan, China in Dec. Meanwhile, data from Baker Hughes showed that the number of active U.S. rigs drilling for oil edged up by 1 to 181 this week. That marked the first increase since the week ended Mar 13, implying a possible uptick in production is on tap.
Oil ends modestly higher, supported by signs of economic recovery, even as China-U.S. tensions flare up
The Dow finished the week with a loss of about 200, staying close to its flat-line trend for weeks. The virus in the southern states has been in a choppy by pretty much sideways pattern for a couple of weeks, for a small degree of comfort. School openings & reopening of economies around the US continue to be uncertain in many areas. And China trade is getting a lot more attention by traders. Choppy times lie ahead which will also be influenced by the presidential election..
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Sales of new homes rose a sharp 13,8% in Jun, the 2nd straight increase after 2 months when sales plunged as the country went into lockdown because of the coronavirus. The Commerce Dept reported that the Jun gain pushed sales of new homes to a seasonally adjusted annual rate of 776K, a better-than-expected performance. The increase follows a 19.4% jump in May. The 2 months of sales gains followed 2 months of sharp declines in sales in Mar & Apr as much of the country went into lockdown. A separate report Wed showed sales of previously owned homes surged 20.7% in June to a seasonally adjusted annual rate of 4.7M. Even with the gain, which followed 3 months of declines, new home sales remain toughly 20% below pre-pandemic levels. The median price of a new home sold in Jun increased to $329K, up 5.6% from a year ago. Economists are hoping for a further rebound in sales in coming months but caution that this expectation depends heavily on the course of the coronavirus. A recent resurgence in cases has caused some states to rollback their reopening plans. Sales are being helped by ultra-low mortgage rates which earlier this month dropped below 3% for a 30-year-fixed rate mortgage for the first time in nearly 50 years. Economists believe low rates & changes in home preferences brought on by the pandemic will combine to support further sales gains this year. In Jun, sales were up in all parts of the country with the biggest gain coming in the Northeast, a surge of 89.7%. Sales rose 18% in the West, 10.5% in the Midwest & 7.2% in the South.
New home sales spike in June
Verizon (VZ), a Dow stock, continued to add cellphone customers during the pandemic, though quarterly revenue declined in its core wireless business and its online advertising unit. The largest US cellphone carrier by subscribers reported a net gain of 173K postpaid phone connections during Q2. That figure included past-due accounts that were still in service under the federal Keep Americans Connected pledge. VA counted almost 19M active wireless connections, which include tablets, smartwatches & other cellular devices, at the end of Jun. VA, which temporarily closed its retail stores as the coronavirus pandemic spread across the US, said its device-upgrade rate fell to 3.7% from 4.3% a year earlier as weak retail traffic crimped smartphone sales. The company said more than 60% of its locations were open by the end of Q2 & it expects to be close to fully open by the end of Jul. Overall, the company's total revenue slipped 5.1% to $30.4B. Wireless-service revenue fell 1.7% in Q2 from a year ago, but the company forecast it would be flat to down 1% in Q3. Revenue in the company's media business, which includes its Yahoo & AOL properties, declined 25% to $1.4B. EPS was $1.13, compared 95¢ a year earlier. Fewer phone sales helped boost the bottom line because devices sold to customers offer carriers little to no profit. Total equipment costs dropped 18%. The Covid-19 pandemic upended companies' profit projections this spring & forced many to set aside more cash for unexpected expenses. The company earlier this year pulled its revenue guidance & lowered its annual adjusted per-share profit projection to between 2% growth to 2% decline. The stock went up 1.01.
If you would like to learn more about VZ, click on this link:
club.ino.com/trend/analysis/stock/VZ?a_aid=CD3278&a_bid=6ae5b6f7
Verizon revenue drops as pandemic slows phone shopping
Schlumberger (SLB) said it had a net loss of $2.47 per share, in Q2 wich compares with EPS of 35¢ a year ago. Excluding charges & credits, the oil company had adjusted EPS of 5¢, ahead of the consensus estimate for a loss of a penny. Revenue tumbled 35% to $5.4B from $8.3B & below the $5.37B consensus. "This has probably been the most challenging quarter in past decades," CEO Olivier Le Peuch said. Revenue fell 28% from Q1, "caused by the unprecedented fall in North America activity, and international activity drop due to downward revisions to customer budgets accentuated by COVID-19 disruptions. This speaks volumes about an industry confronted with historic oil demand and supply imbalances caused by demand destruction from the global COVID-19 containment effort." North America revenue slid 48% from Q1 as customers cut back spending. Intl revenue was down 60% from Q1, with Latin America & Africa seeing the worst declines due to COVID-19 restrictions and the drop in deepwater activity, he said. The company is reorganizing & combining its 17 product lines into 4 divisions, restructuring geographically around 5 key basins of activity and streamlining management. It is cutting 21K jobs. SLB expects to remove $1.5B of costs permanently. "Looking at the macro view in the near-term, oil demand is slowly starting to normalize and is expected to improve as government measures support consumption," said the CEO. "However, subsequent waves of potential COVID-19 resurgence pose a negative risk to this outlook." The stock gained 19¢.
If you would like to learn more about SLB, click on this link:
club.ino.com/trend/analysis/stock/SLB?a_aid=CD3278&a_bid=6ae5b6f7
Schlumberger revenue tumbles 35% to fall short of estimates, to cut 21,000 jobs
Gold futures scored a record finish, with prices up almost 5% for the week, as rising US-China tensions & jitters about the economic outlook fueled haven-related demand for the precious metal. China ordered the US to close its consulate in the western city of Chengdu, the latest salvo in a dispute between DC & Beijing. The US earlier this week ordered China to close its Houston consulate, alleging Chinese agents had tried to steal data from facilities in Texas. Aug gold, the most actively traded contract, climbed $7 (0.4%) to settle at $1897 an ounce. That surpassed the all-time closing high of $1891 for a most active contract set in Aug 2011. The all-time intraday high for a most actively traded contract stands at $1923 an ounce from Sep 6, 2011. Today, Aug gold climbed to as high as $1904 & for the week, based on the most-active contracts, gold futures saw a 4.8% gain.
Gold scores a record close as U.S.-China tensions mount
Oil futures ended with a modest gain, with US prices up more than 1% for the week, as investors weigh some signs of economic improvement against tensions between the world's biggest economic superpowers, both of which may influence global energy demand. Traders also continued to eye the impact of rising cases of COVID-19 in parts of the world, which could lead to business disruptions and a slowdown in economic recovery. The economic data out of Europe helped to inject some optimism in markets about oil demand. The eurozone manufacturing PMI rose to 51.1 from 47.4 in Jun & the services PMI rose to 55.1 from 48.3 in Jun, as the composite PMI of 54.8, a 25-month high. West Texas Intermediate (WTI) crude for Sep tacked on 22¢ (0.5%) to settle at $41.29 a barrel, after declining 2% yesterday. Sep Brent crude inched up by 3¢ to $43.34 a barrel, following a 2.2% skid in the previous session. For the week, front-month WTI futures saw a 1.3% weekly gain & Brent rose 0.5%. Pres Trump also added to a sense of iciness forming between the nations when he said last evening that the trade pact forged between the 2 countries last year & signed earlier this year “means much less” to him than it did before. The US has accused China of mishandling the COVID-19 outbreak, which was first identified in Wuhan, China in Dec. Meanwhile, data from Baker Hughes showed that the number of active U.S. rigs drilling for oil edged up by 1 to 181 this week. That marked the first increase since the week ended Mar 13, implying a possible uptick in production is on tap.
Oil ends modestly higher, supported by signs of economic recovery, even as China-U.S. tensions flare up
The Dow finished the week with a loss of about 200, staying close to its flat-line trend for weeks. The virus in the southern states has been in a choppy by pretty much sideways pattern for a couple of weeks, for a small degree of comfort. School openings & reopening of economies around the US continue to be uncertain in many areas. And China trade is getting a lot more attention by traders. Choppy times lie ahead which will also be influenced by the presidential election..
Dow Jones Industrials
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