Dow advanced 238 after falling 500 in early trading, but decliners modestly ahead of advancers & NAZ gained 165. The MLP index dropped 6+ to 209 & the REIT index fell 1+ to the 487s. Junk bond funds were mixed & Treasuries saw heavy buy buting that was reduced in the PM. Oil fell 2+ to the 99s (above session lows in the 95s) & gold plunged 34 to the 1899 (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)
China's capital of Beijing warned over the weekend that Covid had spread undetected in the city for a week & that more cases would be found with investigation. The main business district of Chaoyang began 3 days of mass testing today for anyone living or working in the region, which is home to many embassies & foreign businesses. The district accounted for most of the 42 new Covid cases reported in Beijing since Fri. Only specific apartment buildings have been locked down in Beijing. Schools mostly remain open, but the Chaoyang business district ordered a halt of all in-person group activities & training courses, including arts & sports. In a small portion of the district one subway stop south of the main business area, all restaurants, entertainment venues, indoor gyms & non-essential businesses are to close as of today. Local authorities added that residents in the affected area should generally work from home & not go out unless necessary. The increased cases in Beijing come as mainland China faces its worst Covid outbreak since early 2020. The country has stuck to a stringent zero-Covid policy of using swift lockdowns, quarantines & travel restrictions to control outbreaks of the virus. Most of Shanghai, China's largest city, remains under prolonged lockdown & reported more than 100 new Covid-related deaths since Fri. Nationwide, Shanghai by far accounted for the most Covid cases, reporting for yesterday more than 2400 cases with symptoms & more than 7K without. Beijing & Shanghai rank among China's 10 largest provincial-level regions based on GDP, according to Wind Information. The data showed Beijing’s economy grew by 4.8% in the first qtr, the same as the national level, while Shanghai's rose by 3.1% as targeted lockdowns rose in Mar. Service industry workers affected by the latest round of cases in Beijing's Chaoyang business district can receive 100 yuan ($15.38) a day, for a maximum of 21 days, municipal authorities said.
China’s Beijing warns of more Covid cases, begins mass testing in one district
Soaring inflation & snarled supply chains are crushing small businesses owners, who are struggling to maintain their bottom line & retain workers, according to a new survey published by Goldman Sachs. The survey of owners from Goldman Sachs' 10,000 Small Business Voices shows that 91% of respondents believe broader economic trends, including red-hot inflation, supply chain issues & a labor shortage, are having a negative effect on their business. "Small business owners are stuck between a rock and a hard place as inflation and an uneven economic recovery are impacting every part of our businesses with no end in sight," said Khari Parker, a member of the Goldman Sachs' 10,000 Small Businesses Voices National Leadership Council & the owner of a small business, Connie's Chicken & Waffles, in Baltimore. The hottest inflation in 4 decades has exacerbated workplace challenges, with the high costs of attracting & retaining talent hurting small businesses' profit margins & ability to do business. 8 in 10 respondents said their business' financial health has been hurt by rising consumer prices over the past 6 months. "Small businesses are sending a clear signal that the economy and the challenges they face – like inflation, workforce, supply chain and energy costs – are going from bad to worse," said Joe Wall, national director of the 10,000 Small Businesses Voices. A persistent labor shortage has also weighed on small businesses as owners are forced to hike wages in an increasingly competitive market to hire new workers. Some economists have warned that rising wages could fuel even higher inflation. Nearly 2/3 of small business owners said they have increased wages in order to attract new employees or retain their former employees. As a result of the higher wages, about 60% of small business owners said they are passing along the costs to consumers by raising the prices of goods or services, according to the survey, which is based on 1107 respondents & was conducted Apr 11-14. The combination of high inflation & rising wages has fueled concern about the possibility of a wage-price spiral, a 1970s-style phenomenon where high inflation leads to pay hikes, which in turn lead to more spending & more expensive prices.
Surging inflation squeezing small businesses, Goldman Sachs survey shows
Ford (F) is set to be the first automaker to bring a mainstream, full-size
electric pickup to the US market, poised to capitalize on a
first-mover advantage in what’s expected to be a hotly contested segment
in the years to come. CEO Jim Farley said the company plans
to scale production of its electric F-150 Lightning pickup faster than
its competitors, with plans to increase production
of the Lightning at a plant in Dearborn, Michigan, to 150K units in
the next year or so, up from an initial target of 40K vehicles. That would dwarf plans of Rivian Automotive (RIVN) & General Motors (GM),
which are expected to be in the tens of thousands. Both are already
producing & selling pricier electric pickups in smaller & larger
truck segments. Other companies, specifically EV start-ups, have
previously touted the electric pickup as a massive opportunity, but have
so far failed to execute on a large scale. “In this market, being
a first mover is a very, very important move,” Farley said. “We
didn’t know we’d be first, but we worked fast in case we were, and it’s
worked out that way. I think it could be one of the most important
advantages we have.” Ford is “confident” it can hit its 150K production target,
according to Farley. He added that the company has secured the lithium-ion
batteries needed for that level of production – a major concern of
investors & analysts. Ford also will prioritize supplies of semiconductor chips, which have
been a major supply chain problem for more than a year, for the
Lightning, Farley added. “We’re not joking. We think this is as big
a product as when the Model T came out for us,” Farley said, referring
to Ford's flagship product that is credited with being the catalyst for
mass adoption of vehicles from horse & buggies beginning in 1908. The stock went up 17¢.
If you would like to learn more about Ford click on this link:
club.ino.com/trend/analysis/stock/F_aid=CD3289&a_bid=6ae5b6f
Ford beefs up F-150 Lightning production in a forceful bid to dominate the electric pickup market
Gold futures posted their lowest finish since late Feb, with the traditional haven failing to find support as investors dumped equities & other assets perceived as risky, while jumping into other assets perceived as safe, including Treasuries & the $. Gold for Jun fell $38 (2%) to settle at $1896 an ounce — the lowest finish for a most-active contract since Feb 25. The yellow metal fell 2.1% last week, after back-to-back weekly gains. US benchmark stock indices saw another round of losses after a steep Fri selloff that saw the Dow end nearly 1000 points lower & post its largest one-day percentage drop since Oct 2020. The ICE US Dollar Index, a measure of the currency against a basket of 6 major rivals, jumped 0.5% to 101.73 after trading as high as 101.86, its highest since Mar 2020. A stronger $ can be a weight on commodities priced in the unit, making them more expensive to users of other currencies. A rise in Treasury yields pushed the rate on the 10-year note to a level last seen in Dec 2018 last week, as investors penciled in an increasingly aggressive Fed response to inflation running at its highest in 4 decades. Yields, which move the opposite direction of prices, slumped today as investors piled into the haven as wider COVID-19 lockdowns in China put added pressure on global equities & triggered a slump across a range of commodities, including oil futures.
Gold prices settle at a 2-month low as investors sidestep the metal for more attractive safe haven
Oil futures finished sharply lower,
with US benchmark prices marking their lowest finish in 2 weeks. Oil sold off amid the ongoing lockdowns in Shanghai & other parts of
China, seriously denting petroleum demand there. This illustrates the supremacy of the demand fears related to
China over concerns related to Russian oil exports. West Texas
Intermediate crude for Jun fell $3.53 (3.5%) to settle
at $98.54 a barrel, the lowest
front-month finish since Apr 11.
Oil futures fall sharply, with U.S. prices ending at a 2-week low
This was another rough day for investors. Sellers took command in the early hours of trading, then around midday buyers returned to bring the Dow into the black. Buying in the last hour gave the Dow its advance for the day, finishing 700 above early lows, although decliners were ahead of advancers. Earnings will be driving the stock market this week. This has the makings of another wild week for the stock market.
Dow Jones Industrials
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