Dow rose 465 (near midday highs). advancers over decliners about 4-1 & NAZ climbed 434. The MLP index gained 6+ to the 205s & the REIT index went up 10+ to the 429s. Junk bond funds were bid higher & Treasuries continued to be heavily sold, bringing higher yields. Oil surged 4+ to go over 110 & gold dropped 15 to 1809 (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)
US consumer confidence tumbled more than expected to a fresh 11-year low in early May, reflecting heightened concerns among Americans about the hottest inflation in a generation. The University of Michigan's consumer sentiment index fell to 59.1 in May – down sharply from the Apr reading of 65.2 & well below the forecast for a reading of 64. That's a more than 28% drop from just one year ago, when the gauge was at 82.9, marking the lowest reading for the gauge since 2013. "Inflation remains on the forefront of consumers’ minds," Joanne Hsu, director of the survey, said. "They mentioned inflation throughout the survey, whether the questions referred to their own personal financial situations, their outlook for the economy, or buying conditions." Consumers expect prices to rise 5.4% over the next year, remaining near a 4-decade high for the 3rd consecutive month. Americans believe prices will rise at an annual rate of 3% over the next 5-10 years, which is unchanged since Apr. Americans' view of their financial situation is also at the lowest level since 2013. More than ½ of respondents expect inflation to erode their income over the next year. Inflation accelerated again in Apr the Labor Dept reported, with the consumer price index rising by 8.3%. While that's down a bit from the 41-year high notched in Mar, it was much higher than expected & underscores that inflationary pressures in the economy remain strong. Rising inflation is eating away at strong wage gains that American workers have seen in recent months: Real average hourly earnings decreased 0.1% in Apr from the previous month, as the inflation increase eroded the 0.3% total wage gain. On an annual basis, real earnings actually dropped 2.6% in Apr.
Consumer confidence sinks to 11-year low in May as inflation rages
In the current market downturn, while all 3 of the major averages have been hit, investors have hammered NAZ the most. It"s down 27% this year. The 3 worst-performing NAZ stocks are Coinbase (COIN), Rivian (RIVN) & Netflix (NLFX), all off well over 70% this year & feeling the sting of more & potentially larger rate hikes by the Federal Reserve. "I told you the guidance that broad support on the Committee is to have 50 basis point hikes on the table at the next couple of meetings," said Federal Reserve Chair Jerome Powell during the Q&A portion of his press conference earlier this month after policymakers raised the benchmark interest rate by a ½-point for the first time in 2 decades. "I told you the guidance that broad support on the Committee is to have 50 basis point hikes on the table at the next couple of meetings," said Powell during the Q&A portion of his press conference earlier this month after policymakers raised the benchmark interest rate by a ½-point for the first time in 2 decades. Already down 30% from its Nov 2021 peak, it's now tracking for the worst bear market since the Oct 2007 peak to Nov 2008 bottom when it lost over 53%.
Nasdaq’s nosedive nears pandemic crash of 2020
US air-safety regulators have told Boeing (BA), a Dow stock, the documentation it submitted to win approval to resume 787 deliveries
to airlines after a year is incomplete. The Federal Aviation Administration (FAA) identified a
number of omissions in its documentation, submitted in late Apr & has sent portions of it back to the planemaker. Another person said it was too early to say whether FAA concerns would
lead to a new delay in resuming deliveries, which have been suspended
for the past year due to production flaws. CEO
Dave Calhoun highlighted the submission on Apr 27, calling it a “very important step” & saying it was
preparing the first 787s for delivery, but stopped short of providing a
date. A
BA spokesperson said the company continues to have a transparent
dialogue & work closely with the FAA on the remaining steps. Clearing
a swollen inventory of twin-aisled Dreamliners & its best-selling 737
Max jets is vital to the planemaker's ability to emerge from the
overlapping pandemic & jet-safety crises, a task complicated by
supply-chain bottlenecks & war in Ukraine. Deliveries of the 787
have been halted for a year as BA worked thru inspections &
repairs in an industrial headache expected to cost about $5.5B. The company has more than 100 of the advanced composite twin-aisle jets
parked in inventory, worth about $12.5B. In Feb, the
FAA said it would not allow BA to self-certify individual new Boeing
787 planes. Then-FAA Administrator Steve Dickson said the agency needed
from BA “a systemic fix to their production. They’ve got
to produce the quality on their production line that we’re looking for
and that they’ve committed to.” The stock rose 3.70.
If you would like to learn more about BA click on this link:
club.ino.com/trend/analysis/stock/BAa_aid=CD3289&a_bid=6ae5b6f
FAA finds Boeing 787 certification documents incomplete, sources say
Gold futures fell, booking their lowest close since Feb 4 & extending a skid into a 3th straight week, as a surging $ outweighs the yellow metal's attractiveness as a hedge against inflation. Gold for Jun fell $16 (0.9%) to settle at $1808 an ounce, the lowest close for the most-active contract since Feb 4. For the week, it fell 3.9%, its worst weekly tumble in 11 months. The ICE US Dollar Index, a measure of the currency against a basket of 6 major rivals, was off 0.1% but rose about 0.9% on the week, hitting a level last seen 20 years ago. A stronger $ is seen as a negative for commodities priced in the unit, making them more expensive to users of other currencies.
Gold ends at 14-week low, records worst weekly drop in 11 months
Gasoline futures surged to a record clos, providing a lift for crude oil that erased a weekly loss. West Texas Intermediate crude for Jun rose $4.36 (4.1%) to finish at $110.49 barrel, leaving it up 0.7% for the week. Jul Brent crude, the global benchmark, rose $4.10 (3.8%) to settle at $111.55 a barrel, logging a 0.8% weekly gain. The Energy Information Administration reported gasoline inventories dropped 3.6 million barrels versus a forecast for a 1.9M barrel drop, while distillate stocks were down 900K barrels, compared with expectations for a 1.6M barrel drop. The gasoline crack spread — the difference between the price of a barrel of oil & the products refined from it — hit a contract high above $55 a barrel during the session. The market was also considering the possibility of Russia cutting off natural gas to Finland over the latter’s move toward joining NATO in the wake of the Russian invasion of Ukraine. Turkey reportedly voiced objection to Finland or Sweden joining NATO. As it fights to wean off Russian energy overall, the EU has been struggling to push thru a proposed ban on Russia oil, with Hungary voicing objections over the potential damage to its own economy. As for China, Shanghai is expected to reopen in a few days with its COVID-19 transmission subsiding, an official said. But that's amid worries that Beijing will soon impose its own stricter lockdown. China is the world's biggest importer of crude. Oilfield services company Baker Hughes said the number of US oil rigs rose by 6 this week to 563, while gas rigs were up 3 to 149 & miscellaneous rigs were unchanged at 2.
Gasoline futures finish at record, lifting oil to weekly gain
Dow Jones Industrials
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