Dow finished down 491 (session lows) in a volatile session. decliners over advancers better than 2-1 & NAZ lost 343. The MLP index added 2+ to the 194jk s & the REIT index fell 4+ to 410. Junk bond funds were little changed & Treasuries continued to see heavy selling. Oil jumped 2+ to the 111s on supply worries & gold was off 4 to 1820 (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 dropped in June to the lowest in more than a year as inflation continues to dampen Americans' economic views. The Conference Board's index decreased to 98.7 from a downwardly revised 103.2 reading in May. The forecast called for a decline to 100. A measure of expectations, which reflects consumers' 6-month outlook, dropped to the lowest in nearly a decade as Americans grew more downbeat about the outlook for the economy, labor market & incomes. The gauge of current conditions fell slightly. As the Federal Reserve raises interest rates to curb price pressures, higher borrowing costs risk denting purchases for big-ticket items like homes, cars & appliances. Despite sagging sentiment, buying plans are so far holding up. The share of respondents who said they intend to buy a vehicle or major appliance in the next 6 months increased from a month earlier At the same time, vacation plans, both domestic & internationally, softened, likely due to higher airfares & gas prices. Consumers see prices in the next year rising at the fastest rate in the data back to the 1980s. Separate data on inflation-adjusted consumer spending will be released Thurs. “Consumers’ grimmer outlook was driven by increasing concerns about inflation, in particular rising gas and food prices,” Lynn Franco, senior director of economic indicators at The Conference Board, said. “Expectations have now fallen well below a reading of 80, suggesting weaker growth in the second half of 2022 as well as growing risk of recession by yearend.” “The widening gap between consumers’ present situation and their expectations of the future raises the risk of recession. Apprehension about the direction of the economy could increasingly influence consumer behavior, resulting in a downward spiral of slumping demand.”
US Consumer Confidence Hits 16-Month Low
As the Group of Seven meeting in Germany concludes, another big summit is beginning — the meeting of the NATO alliance in Spain. The summit is arguably the most important meeting of the alliance in recent months, with member countries & non-NATO allies, such as Australia & South Korea, set to discuss the war in Ukraine & how to confront an increasingly aggressive Russia. Yesterday, NATO's Secretary-General Jens Stoltenberg said the Western military organization would increase the number of troops within its rapid response force, which comprises land, air, sea & special forces units that are capable of being deployed quickly, to 300K from the current level of around 40K personnel. Ukraine's Pres Volodymyr Zelenskyy addressed the leaders of the G-7 nations, pressing them for more heavy weaponry & help to end the war before winter sets in. Ukraine’s emergency services said the Russian missile strikes on a Ukrainian shopping mall yesterday killed at least 18 people and wounded 59 others.
Key G-7 countries ban Russian gold imports
The Treasury Dept announced that the US & a handful of key economic allies will prohibit imports of Russian gold, Moscow's largest export outside of the energy sector. The expanded sanctions represent the latest effort by the US & some of its Group of Seven partners to target Russian Pres Vladimir Putin & alienate the country's economy from international commerce & payments systems. The UK, Canada & Japan are joining in the effort. Treasury Secretary Janet Yellen has touted the multilateral approach to enforce economic penalties as crippling to Moscow & a severe punishment for Putin's monthslong invasion of Ukraine. Treasury also announced that its penalties now target an additional 70 Russian companies & other entities critical to the country's defense industrial & manufacturing base. “Broad multilateral commitments and actions by G7 members this week further cut off the Russian Federation’s access to technology that is critical to their military,” Yellen said. “Targeting Russia’s defense industry will degrade Putin’s capabilities and further impede his war against Ukraine, which has already been plagued by poor morale, broken supply chains and logistical failures.”
U.S., G-7 allies block gold imports from Russia in latest round of sanctions
Gold prices fell to post the lowest settlement in nearly 2 weeks, but remained mired in a range of $1800-1880 since mid May. Gold prices fell $3 to settle at 1821 per ounce, the lowest since Jun 15. Prices for the precious metal had fallen toward session lows immediately after the release of US consumer confidence data for Jun, before paring those losses. The data showed a drop in consumer confidence to a 16 month low of 98.7.
Gold prices post their lowest finish in nearly 2 weeks
Oil futures rose, lifted as supply worries moved back into the spotlight. West Texas Intermediate crude for Aug rose $1.16 (1.1%) to $110.73 a barrel. Aug Brent, the global benchmark, jumped $1.37 (1.2%) to $116.46 a barrel. Sep Brent crude, the most actively traded contract, was up $1.40 (1.3%) to $112.38 a barrel. Crude found support after news reports said French Pres Emmanuel Macron was overheard telling Pres Biden on the sidelines of a Group of Seven summit that Saudi Arabia & the UAE had little room to boost crude output in the near term. Macron told Biden that he had been informed by Sheikh Mohammed bin Zayed al-Nahyan, the leader of the UAE that the country was at maximum production capacity & that the Saudis can increase production by 150K barrels a day or slightly more. UAE's energy minister later clarified that the country was producing near maximum capacity based on its OPEC+ production-agreement baseline of 3.1M barrels a day.
Oil futures end higher as supply fears move back into spotlight
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