Markets drift lower as gold and oil rise

Dow was off 54 (above midday lows), advancers slightly ahead of decliners & NAZ pulled back 50.  The MLP index rose 2+ to the 189s & the REIT index was little changed in the 423s.  Junk bond funds inched higher & Treasuries were slightly lower.  Oil jumped about 1 to the 66s (2 year high) & gold rocketed ahead 28 to 1867 (more on both below).

AMJ (Alerian MLP Index tracking fund)

Free Apple Analysis!

Bring Your Portfolio Into The 21st Century

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

US Covid case counts fell further over the weekend, with data compiled by Johns Hopkins University showing the nationwide average at about 33K new cases per day, the lowest level since late Jun.  Thurs, the Centers for Disease Control & Prevention (CDC) announced that fully vaccinated people don’t have to wear masks indoors anymore. Retailers are easing mask requirements for fully vaccinated customers, unless facial coverings are required by local or state law.  The US is reporting an average of 1.9M vaccinations per day over the past week, according to CDC data, & 47.4% of the population has received at least one vaccine dose.  Average daily Covid cases fell to about 33K, a 7-day average of Hopkins data shows, a steep decline from the most recent peak of more than 71K per day in mid-Apr.  Average daily case counts have fallen by at least 5% in more than 40 states over the past week.  The latest 7-day average of Covid deaths is 602, down 7% from a week prior.  On Sat, the 7-day average of daily deaths dipped below 600 for the first time since Jul.  Federal data shows the US is reporting an average of 1.9M vaccinations per day over the past week.  The pace of daily shots has been on a mostly downward trend since peaking at 3.4M per day in Apr.  More than 47% of the population is at least partially vaccinated, according to the CDC & 37% is fully inoculated.

U.S. Covid cases, deaths fall further amid easing of mask requirements

In the latest sign of a sluggish recovery from the coronavirus pandemic, China said that consumer spending grew at a slower-than-expected pace in Apr.  Retail sales rose 17.7% last month from a year ago, the National Bureau of Statistics reported.  That missed expectations of 24.9% growth in Apr.  Apr retail sales figure also marked a slowdown from 34.2% year-on-year growth in Mar.  Catering sales, which includes restaurant dining, grew 46.4% year-on-year in Apr, down from 91.6% in Mar.  Online sales of consumer goods rose 23.1% during the first 4 months of the year from a year ago, a slower pace than the 25.8% growth rate of the first 3 months of the year.  In a quarterly monetary policy report released last week, the People's Bank of China noted that the foundation for economic recovery is not yet solid & consumer spending remains constrained.  Today the Statistics Bureau reiterated that the foundation for the economic recovery is not yet solid.  The urban unemployment rate fell to 5.1% in Apr, down from 5.3% in Mar, but the average number of hours worked a week declined to 46.4 hours last month, from 46.9 hours in Mar.  The unemployment rate for those aged 16-24 remained a high 13.6%.  Consumption has lagged China’s overall economic recovery from the coronavirus pandemic.  Retail sales contracted last year despite expansion in China’s GDP — the only major economy to grow last year.  Other figures for Apr showed steady growth in non-consumer sectors.  Industrial output rose 9.8% in Apr, matching expectations.  Fixed asset investment for the first 4 months of the year rose 19.9%, slightly above the 19% figure predicted.  Earlier this month, China’s customs agency said exports grew a more-than-expected 32.3% in Apr from a year ago.

China says retail sales grew 17.7% in April, missing expectations

Gasoline shortages continue to plague much of the East Coast, leaving a majority of the stations in DC ran out of fuel.  Supplies at thousands of gas stations in dozens of Southern states were drained after a cyberattack forced a shutdown of the nation's largest gasoline pipeline earlier this month.  The vital pipeline, operated by Colonial Pipeline, delivers about 45% of the fuel consumed on the East Coast.  As of yesterday, about 12K stations had run empty, according to GasBuddy.  In his latest update, nearly 90% of the gas stations in the nation's capital were running dry.  Over the weekend, the number of gas stations suffering from the outages fluctuated between 69% to 88%.  Last week, operations had restarted & gasoline deliveries were being made in all of its markets, but the company caution that it would take "several days" to return to normal.   The pipeline runs from the Gulf Coast to the New York metropolitan region, but states in the Southeast are more reliant on it.  Other parts of the country have more sources to tap.  For example, a substantial amount of fuel is delivered to states in the Northeast by massive tankers.

Nearly 90% of DC pumps without fuel amid crippling gas shortage

Gold finished higher, with prices at their loftiest since Jan on the back of a weaker $ & losses among many global benchmark stock indices.  Prices for the precious metal gained more today after Federal Reserve Vice Chair Richard Clarida said the US economy hasn't hit the benchmark of “substantial further progress” needed for the central bank to begin scaling back asset purchases.  That helped put pressure on the $, supporting $-denominated prices of gold, with the ICE US Dollar Index trading down 0.2%.  Jun gold rose $29 (1.6%) to settle at $1867 an ounce.  Prices for the most-active contract settled at their highest since Jan & futures also closed above the long-term 200-day moving average for the first time since early in 2021.  Analysts view moves above or below moving averages as a gauge of an assets bullish & bearish momentum.  Gold, which tallied a rise of 0.4% last week, marked their largest one day $ & percentage gain since May 6.  Gold prices held solid gains after a reading of manufacturing activity in the New York area, the Empire State Manufacturing Index, slipped to 24.3 in May from a more-than-3-year-high of 26.3 in Apr, the New York Fed said.  The new orders index rose 2 points to 28.9 in May, while shipments rose 4.7 points to 29.7.

Gold marks highest finish in over 4 months, breaks above 200-day moving average

Oil futures climbed to post their highest finish in more than 2 years, as signs of a demand recovery in the US & Europe fed optimism over the outlook for energy demand, despite a round of weaker-than-expected economic data from China.  West Texas Intermediate crude for Jun rose 90¢ (1.4%) to settle at $66.27 a barrel.  That was the highest front-month contract finish since Apr 2019, when prices ended at $66.30.  Jul Brent, the global benchmark, rose 75¢ (1.1%) to $69.46 a barrel, settling at the highest since Mar.  Weakness in the $ contributed support to $-denominated prices of oil.  Baker Hughes on Fri reported a weekly rise of 8 in the number of active US rigs drilling for oil to stand at 352.  Meanwhile, China said retail sales in Apr were up 17.7% from the pandemic-suppressed level seen a year earlier, compared with a 34.2% rise in Mar.  Apr industrial production rose 9.8% year over year in Apr, after a 14.1% rise in Mar, while fixed-asset investment decelerated to 19.9% in the Jan-Apr period versus 25.6% in Q1.  Still, analysts said oil appears to be underpinned by optimism over the demand outlook for H2, a view reinforced by monthly forecast updates last week from both OPEC & the International Energy Agency.

Oil prices post highest finish in over 2 years on demand optimism

The fight against the virus is going well, with key data at mid-year lows.  But it's not over.  There remains a lot of confusion about wearing masks.  Gold bugs are back & attracting a lot of interest in owning gold.  The Dow chart below shows the Dow has been pretty much trending sideways for the last month, following a major rally.

Dow Jones Industrials