Dow shot up 658 with profit taking into the close, advancers over decliners better than 4-1 & NAZ went up 201. The MLP index added 3 to the 191s & the REIT index rose 6+ to the 408s. Junk bond funds fluctuated & Treasuries had limited buying which reduced yields. Oil rose 8 to the 97s & gold slid back 2 to 1703 (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 lockdowns imposed during the coronavirus pandemic took a major toll on the country's growth. Q2 & annual growth slowed drastically showing the impact on industrial production & consumer spending. GDP fell 2.6% in Q2 from the previous qtr, official data showed. That compares with expectations for a 1.5% decline & a revised 1.4% gain in the previous qtr. On a year-on-year basis, GDP in the Apr-Jun qtr grew a tepid 0.4%, missing forecast for a 1.0% gain. For H1, GDP grew 2.5%. Major cities went into full or partial lockdowns in Mar & Apr, including Shanghai. Data for Jun showed a rebound as industrial output grew 3.9% from a year earlier, but still short of expectations. The forecast called for China's growth to slow to 4.0% in 2022, far below the official growth target of around 5.5%.
COVID CONTRACTION: China's economy shrinks 2.6% after being impacted by virus shutdowns
US consumer confidence increased slightly in Jul, surprising economists who had forecast another decline as inflation continues to rage after sentiment reached the lowest point on record in Jun. The University of Michigan's consumer sentiment index rose to 51.1 this month, up from a record low of 50 in Jun. The forecasat had expected a Jul reading of 49.9. For perspective, the index was at 81.2 a year ago. "Consumer sentiment was relatively unchanged, remaining near all-time lows," Joanne Hsu, director of the survey, said. "Current assessments of personal finances continued to deteriorate, reaching its lowest point since 2011." "Consumers remained in agreement over the deleterious effect of prices on their personal finances," Hsu noted. "The share of consumers blaming inflation for eroding their living standards continued its rise to 49%, matching the all-time high reached during the Great Recession. These negative views endured in the face of the recent moderation in gas prices at the pump." Retail sales also rose last month, in part propelled by increased spending on gas, which hit a record high topping $5 mid-month. Prices have since subsided & average around $4.58. "Consumers are continuing to absorb higher prices in non-discretionary categories like gas, and deferring purchases in categories like appliances," said Claire Tassin, a retail & e-commerce analyst at Morning Consult. "Declines in apparel and department store spending indicate that consumers are tightening their belts in some areas as they manage through this difficult period."
Consumer sentiment rises unexpectedly from record low
General Motors (GM) is still dealing with production snags that will last into next year, CEO Mary Barra said. “It’s
gotten better this year than last year, but really this will go into
’23. … It’s going to take additional capacity,” Barra said. “But right now, it’s we solve issues and new issues pop up, and we’re just dealing with it on a weekly basis,” she added. The auto manufacturer said earlier this month that supply chain issues will put pressure on its Q2 earnings, though it maintained its previous guidance for
2022. GM has roughly 95K manufactured vehicles in its inventory that
are missing certain components as of Jun 30. Despite the supply chain snafus hindering the company, Barra said that GM plans to ramp up its EV production. “The
Hummer, we’re out a couple years. We’re looking at increased production
in the latter part of this year for the Hummer truck,” she continued. The stock went up 1.16.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
General Motors is handling production issues on a ‘weekly basis,’ CEO Mary Barra says
Oil futures ended higher, finding support as news reports said
US officials were playing down expectations Pres Biden's
meetings with top Saudi officials, including Crown Prince Mohammed bin
Salman, would see Riyadh move to immediately boost crude output. Biden
arrived in Jeddah today. West Texas Intermediate (WTI) crude for Aug, the US benchmark, rose $1.81 (1.9%) to close at $95.78 a
barrel. WTI fell 6.9% for the week,
with pressure tied to growing fears that aggressive tightening by the
Federal Reserve & other central banks could lead to sharp economic
slowdowns.
Oil ends higher, but sees weekly drop, as Biden meets with Saudis
Gold ends slightly lower, suffers 5th straight weekly drop
Earnings reports should be the main driver for stocks next week. With all that's going on in the financials markets, they could be very interesting. The Dow was off 50 this week & is up 500 for the month. And it continues in the depressed sideways trend for more than a month.
Dow Jones Industrials
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