Dow jumped 321 (near session high) from buying in the PM, advancers over decliners 5-2 & NAZ advanced 99. The MLP index added 3 to the 192s & the REIT index gained 6+ to the 412s. Junk bond funds were purchased & Treasuries remained in strong demand, reducing yields. Oil rose 2+ to the 108s & gold inched up 1 to 1808 (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)
Former Federal Reserve Vice Chair Randal Quarles argued the Fed has the
tools to tackle inflation, but the federal gov could face
consequences from the increased cost of debt service.
RANDAL QUARLES: I do think that what is necessary to address inflation, while it's not as dramatic as some have thought might be necessary, is still going to have a very consequential effect on the costs of debt service throughout the economy & particularly for the federal gov. My mantra as this whole cycle has been going on is that inflation, ultimately, is not really going to be the problem because the Fed will get on top of inflation. They were a little slow to begin, but they have the tools for this type of inflation & they will do it. The real problem is going to be the increase in the cost of debt service, particularly for the federal gov, particularly for some of the financial disruption that could cause, because people have grown so used to low interest rates for such a long period of time in managing inflation.
Former Fed official on interest rate hikes: Debt service is ‘the real problem’
The EU is looking to hit Moscow once again through another round of sanctions in an attempt to financially cripple its war efforts in Ukraine, this time hitting Russia's gold industry. The 28 nation bloc is planning a similar gold ban to the sanctions package announced last week by 4 members of the G-7, including the US, UK, Canada & Japan. Russia is reportedly the 2nd-largest gold mining country in the world & exported roughly $15B worth of gold in 2021. America’s highest military officer spoke to his Ukrainian counterpart on the heels of the NATO leader summit in Madrid. The call between Chair of the Joint Chiefs of Staff Gen Mark Milley & Commander-in-Chief of the Ukrainian Armed Forces Gen Valery Zaluzhny is the 2nd known discussion this week. “They discussed the unprovoked and ongoing Russian invasion of Ukraine and exchanged perspectives and assessments,” wrote Joint Staff spokesperson US Army Col. Dave Butler in a readout of the call. “The Chairman once again reaffirmed unwavering support for Ukraine’s sovereignty and territorial integrity,” Butler added.
EU plans another hit on Moscow revenue, goes after Russian gold: report
The chances for a recession are still being debated & inflation looks to be stubbornly high for at least the rest of this year, but when it comes to technology spending for companies it's full steam ahead. A new CNBC Technology Exec Council survey shows that more than ¾ of tech leaders expect their organization to spend more on technology this year. No one said they'll be spending less. Tech leaders say if they've learned anything from past downturns it’s that technology is not a cost center but rather a business driver. The areas where they’re focusing investments include cloud computing, machine learning & artificial intelligence, & automation. “In other cycles we’ve seen in the past, tech investment was one of the first casualties,” said Nicola Morini Bianzino, chief technology officer at professional services giant EY. “But after the pandemic, people realized that in a down, or even potentially recessionary, environment, we still need to keep our technology investments.” Danny Allan, chief technology officer at data protection firm Veeam, said that, “If you look at what occurred over the past two years, it’s clear that technology is the sustainable differentiator that sets companies apart.”
Despite recession fears, companies aren’t pulling back on technology investments
Pres Biden has pledged to provide financial & military aid for as long as necessary to prevent Ukraine's defeat, he told reporters at the conclusion of the NATO summit in Madrid. Ukrainian Pres Volodymyr Zelenskyy thanked Ukrainian troops following Russia's withdrawal from the strategic Snake Island in the Black Sea, which it captured in the early days of the war. Ukrainian forces say they drove the Russians out, while Moscow insists it was a voluntary act of goodwill. Meanwhile, NATO states plan to send hundreds of thousands more troops to Eastern Europe to bolster the region’s security.
Russia says new iron curtain is coming down; Biden vows to support Ukraine for ‘as long as it takes’
Gold futures briefly dipped below the key $1800-an-ounce level — posting a loss for the week. The weakness in precious metals comes after gold shed 2% of its value during the month of Jun. Gold futures for Aug fell $5 to settle at $1801 an ounce, marking the lowest most-active contract finish since Feb & ending 1.6% lower for the week. Prices touched a low of $1783, the lowest since Jan. As commodities continue to weaken & recession fears batter markets, commodity analysts said that the technical action in the gold market suggests that the metal will continue to slide. Data today show that the ISM barometer of American factories fell 3.1 points to a 2-year low of 53% in Jun in another sign the US economy is slowing.
Gold dips below the $1,800 mark
Oil futures climbed, with US prices up about 0.8% for the week. Low investment in oil discovery & the shutdown of refineries during the pandemic-induced recession of 2020 have led to a supply crunch. The geopolitical developments concerning Ukraine-Russia poured fuel to the fire & oil bulls remain supported by various forces which may push prices higher. However concerns over tighter monetary policy tipping the global economy into a recession may hit the demand outlook for oil, limiting upside gains. West Texas Intermediate crude for Aug rose $2.67 (2.5%) to settle at $108.43 a barrel.Oil futures settle higher, with U.S. prices up less than 1% the week
Traders had an optimistic feeling in the PM & took the market higher. However for the week Dow fell 400. Next week economic reports for Jun will be reported & they may say the economy was sluggish.
Dow Jones Industrials
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