Dow tumbled 385, decliners over advancers 3-1 & NAZ was off a relatively mild 11. The MLP index dropped 4+ to the 195s & the REIT index was off 1+ to the 447s. Junk bond funds slid a tad lower & Treasuries were heavily purchased, taking the yield on the 10 year Treasury down a big 7 basis points to under 1.36%. Oil gave back 1 to the 74s among the confusion coming from OPEC on production cuts (more below) & gold jumped 24 to 1807 after recent weakness.
AMJ (Alerian MLP index tracking fund)
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The US-traded shares of prominent Chinese companies were under pressure after the Asian country's officials launched a cybersecurity review of Didi (DIDI), fueling concerns about gov risk to Chinese stocks. The action by Chinese regulators comes less than a week after DIDI listed its shares in the US. 2 smaller recent listings are also under review by regulators & saw their shares fall sharply. Concerns about investing in Chinese stocks have grown in recent years, with former pres Trump attempting to ban investment in companies with ties to the Chinese military & US regulators pushing for greater scrutiny of some foreign listings.
U.S.-listed shares of China companies drop on fears of more crackdowns
Oil prices rose slightly after the previous day's rally, supported by expectations of a tighter market as output talks of OPEC+ nations were called off, but concerns that members may start to increase production capped gains. Ministers of OPEC & its allies (OPEC+) called off oil output talks & set no new date to resume them, after clashing last week when the UAE rejected a proposed 8-month extension to output curbs, meaning no deal to boost production has been agreed. Expectations of OPEC+ not adding the extra supply to the market from Aug lent support yesterday, but investors are not keen to move in either direction from here due to uncertainty over actual actions by the OPEC+ members from next month. Iraqi Oil Minister Ihsan Abdul Jabbar said yesterday that his country is committed to the current agreement with OPEC & its allies & does not want to see oil prices soaring above current levels to achieve stability. He also said he hopes that in 10 days there could be a date for the next meeting. OPEC+ agreed on record output cuts in 2020 to cope with a COVID 19-induced price crash. The producers have been gradually easing the output restrictions, but a plan on Fri to lift output by about 2M barrels per day (bpd) from Aug-Dec 2021 & to extend the pact on a series of gradual output shifts to the end of 2022 was blocked by the UAE.
Oil rises further on hopes of tighter supply as OPEC+ talks abandoned
Dr Scott Gottlieb believes people who have previously been infected with coronavirus would still benefit from receiving Covid vaccines. The former Food & Drug Administration (FDA) commissioner acknowledged that some individuals may think their antibodies generated from having the disease offer enough protection against future infection or illness &, as a result, forgo getting the Covid inoculation. The reason to still receive the vaccine is “two-fold,” contended Gottlieb. “One, we believe the vaccine provides a more durable and broader immunity, so it’s going to protect you better against the variants,” he said, alluding to the highly transmissible delta variant, which is causing concern for public health officials. “Two, if you’ve been previously infected and even if you get a single dose of the vaccine — forget getting both doses of the vaccine, just a single dose of the vaccine — you get a very robust immune response,” Gottlieb added. “It’s sort of the best of both worlds if you’ve been previously infected and you get vaccinated,” said Gottlieb, who led the FDA from 2017-2019. “At least with one dose, you do develop a broad, very deep, very durable immunity based on the data that we’ve seen so far, so there’s still a lot of compelling reasons why you’d want to get vaccinated even if you’ve been previously infected.”
Dr. Scott Gottlieb: People who had Covid get ‘best of both worlds’ with vaccines
There is a lot of confusion in the commodity markets. OPEC+ can not agreee on how much to reduce production cuts. Over 1 year ago, the cuts worked & helped stabilize the market after the price of oil went briefly into the red in Apr 2020. Today's disagreement is largely between Saudi Arabia & the UAE. This confusion is driving investors out of stocks & using that money to buy Treasuries & gold - just another dark cloud for the stock market to watch.
Dow Jones Industrials
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