Markets move higher despite GDP shrinkage

Dow rose 330 (near the highs), advancers over decliners 5-2 & NAZ gained 128.  The MLP index added 2+ to 211 & the REIT index soared 13+ to the 437s.  Junk bond funds rose along with stocks & Treasuries were purchased, lowering yields.  Oil was fractionally lower to 97 & gold advanced 33 to 1770 (more on both below).

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Fewer Americans applied for jobless benefits last week, but the previous week's number was revised upward significantly, with claims breaching the 250K level in back-to-back weeks for the first time in more than 8 months.  Applications for jobless aid last week declined 5K to 256K from the previous week's 261K, the Labor Dept reported.  The number of claims for the prior week was revised upward by 10K from the previous estimate of 251K   First-time applications generally reflect layoffs.  The 4-week average for claims, which smooths out some of the week-to-week volatility, rose by 6K from the previous week, to 249K.  That number is also at its highest level since Nov of last year.  The total number of Americans collecting jobless benefits for the latest week fell by 25K from the previous week, to 1.36K.  That figure has been near 50-year lows for months.  Earlier this month, the Labor Dept reported that employers added 372K jobs in Jun, a surprisingly robust gain & similar to the pace of the previous 2 months.  The forecast had expected job growth to slow sharply last month given the broader signs of economic weakness.

Jobless claims fall but still remain at highest level of year

As inflation continues to rise, nearly 40% of Americans say they feel “financially unhealthy.”  That's according to a recent survey from Personal Capital, which surveyed 2000 Americans over 18 & was conducted by The Harris Poll from Apr 19-23.  With prices going up, some 58% of Americans feel that their quality of life is decreasing & a whopping 69% say their salary is not keeping pace.  So what does it take for Americans to feel good about their finances?  Here’s a look at the average savings & salary expectations that the survey respondents said they’d need to consider themselves financially healthy.  The average salary Americans need to feel financially healthy went down 13% from 6 months ago to an average of $107K overall.  It's also worth noting that financial health is subjective, & will mean different things to different people, depending on their priorities.  Savings expectations moved inversely to salary expectations in response to inflation.  The average savings needed to feel financially healthy shot up by 17% to an average of $529K overall over the last 6 months.  Each generation may also have different priorities.  Around ½ of millennial respondents say they'll spend more time planning for a vacation than planning for retirement.  They are also the generation least likely to cut back on travel as a whole because of inflation.

Average salary Americans need to feel ‘financially healthy’ at every age

Ford (F) adjusted operating income more than tripled from a year ago, to $3.7B, as it was able to deliver more of its hottest new products to customers.  Ford also reiterated its previous guidance for the full year & said that it will increase its quarterly div to 15¢, the amount it paid before the Covid-19 pandemic.  Adjusted earnings before interest & tax (adjusted EBIT) jumped to $3.7B from $1.1B a year ago, as its margin improved to 9.3% from 3.9% on supply chain improvements & a more profitable mix of products sold.  Despite that gain, net income was just $667B after it accounted for a $2.4B decline in the value of its stake in electric vehicle startup Rivian Automotive (RIVN).  US sales were up 1.8% in Q2 from a year ago, powered by an 8% year-over-year increase in sales of Ford brand SUVs & crossovers.  But inflation — specifically, higher prices for key commodities & transportation — offset those gains to some extent.  CFO John Lawler said that despite inflation headwinds, Ford is standing by its previous guidance for the full year.  It still expects adjusted EBIT of $11.5-12.5B for the year, which would represent 15-25% growth from last year, with adjusted free cash flow of $5.5-6.5B.  The stock went up 79¢.
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club.ino.com/trend/analysis/stock/F?a_aid=CD3289&a_bid=6ae5b6f7

Ford beats estimates and raises dividend as it sells more of its top models

US oil futures gave up early gains to finish lower.  Crude prices remained a volatile trade as energy traders digested a surprising 2nd consecutive contraction for the US economy & reports that OPEC+ will likely keep production steady or consider a small increase in output.  Sep West Texas Intermediate crude fell 84¢ (0.9%) to settle at $96.42 a barrel after trading as high as $99.84.

U.S. oil prices give up early gains to finish with a loss

Gold rose sharply, with gold logging its biggest one-day percentage gain since Mar.  Gold for Oct gained $31 (1.8%) to settle at $1750 per ounce.  That was the biggest one-day percentage gain for a most-active contract since Mar.  Gold benefited from Federal Reserve Chair Jerome Powell's comment yesterday that the next interest rate hike in Sep would depend on the tenor of upcoming US economic data.  Traders have interpreted his vague guidance as opening the door to a rate hike of just 50 basis points in Sep after the Fed opted for 75 basis point hikes in Jun & Jul.  Gold has endured substantial weakness this summer as the strong $ & higher yields have robbed the precious metal of some of its luster.  After falling for 5 straight weeks, gold hit its lowest level since the first qtr of 2021 earlier this month.  The ICE US Dollar index a gauge of the greenback's strength against a basket of rivals, was up by less than 0.1% in today's dealings.

Gold scores biggest one day rally since March, silver jumps nearly 7% due to Fed-inspired ‘short squeeze

Early on stocks were sold.  Then buyers came & kept  coming for the rest of the day.. The Dow finished near session highs.  The rate hike was no surprise & buyers are hoping.the Fed will be able to get inflation under control soon.  But that is a very big chore.  Many of the earnings reports mention inflation & that mention is not favorable.  Even if it pulls back to 5%, that's still annoying.  In the meantime, Dow is up about 2500 from its low.in mid Jun (see below).

Dow Jones Industrials