Dow sank 464, decliners over advancers 6-1 & NAZ dropped 274. The MLP index was off 1 to the 218s & the REIT index pulled back 5+ to the 436s. Junk bond funds drifted lower & Treasuries had a little selling taking yield on the 10 year Treasury over 3%. Oil fell 3+ to the 87s & gold declined 11 to 1751.
AMJ (Alerian MLP index tracking fund)
European natural gas prices surged after Russia's state-owned energy giant Gazprom said it would shut down Europe's single biggest piece of gas infrastructure for 3 days from the end of the month. The unscheduled maintenance works on the Nord Stream 1 pipeline, which runs from Russia to Germany via the Baltic Sea, deepen a gas dispute between Russia & the EU & exacerbate both the risk of a recession & a winter shortage. The front-month gas price at the Dutch TTF hub, a European benchmark for natural gas trading, jumped 19% today to reach €291.5 ($291.9) per megawatt hour. The contract closed on Fri at a record high of €244 per megawatt hour, registering its 5th consecutive weekly gain. Gazprom said Fri that the shutdown was because the pipeline's only remaining compressor required servicing. Gas flows via the Nord Stream 1 pipeline will be suspended for the 3-day period from Aug 31 to Sep 2. Gazprom said gas transmission would resume at a rate of 33M cubic meters per day when the maintenance work is completed “provided that no malfunctions are identified.” The announcement of the temporary shutdown comes as European govs scramble to fill underground storage facilities with natural gas supplies in a bid to have enough fuel to keep homes warm during the coming months. Russia has drastically reduced natural gas supplies to Europe in recent weeks, with flows via the Nord Stream 1 pipeline currently operating at just 20% of the agreed-upon volume.
European gas prices surge as Russian pipeline maintenance fuels fears of a total shutdown
Treasury yields rose as investors looked ahead to the Jackson Hole economic symposium. The yield on the benchmark 10-year Treasury note traded up slightly to 2.996% while the yield on the 30-year Treasury bond gained 1 basis point to 3.238%. Yields move inversely to prices & a basis point is equal to 0.01%. The yield on the short-term 2-year Treasury note rose to trade at about 3.299%. Those moves come ahead of what could be a volatile week of trading. Investors are anticipating Federal Reserve Chair Jerome Powell's latest comments on inflation at the central bank's annual Jackson Hole economic symposium. Yields fell & then rose at the end of last week as markets mulled over the Fed's released Jul meeting minutes. The Fed indicated that it would continue hiking rates until inflation slows down significantly, although the central bank could soon decrease its pace of tightening.
Treasury yields rise as traders look ahead to Jackson Hole speech
Pfizer (PFE) & its German partner BioNTech (BNTX) asked the Food &
Drug Administration to authorize Covid booster shots that target the
omicron BA.4 & BA.5 subvariants for people ages 12 & older. The
US is preparing for a fall vaccination campaign using updated
vaccines that target the dominant omicron subvariants. Public health
officials expect another wave of infection this fall as immunity from
the currently authorized shots wanes off & people head indoors to
escape the colder weather. PFE stock fell 15¢ & BNTX stock rose 53¢.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE?a_aid=CD3289&a_bid=6ae5b6f7
If you would like to learn more about BNTX click on this link:
club.ino.com/trend/analysis/stock/BNTX?a_aid=CD3289&a_bid=6ae5b6f7
The chart below shows the Dow is still overbought. However, last week traders starting rethinking about recession & higher interest rates. Higher interest rates are all but certain & numerous stories about a slowdown in the economy keep coming. The 2 weeks prior to Labor Day are traditionally a quiet time in the stock market, with some traders going on holiday. This year could be different.
Dow Jones Industrials
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