Dow finished up 76 in a choppy session, decliners over advancer 4-3 & NAZ was off 63. The MLP index was up 1+ to the 204s & the REIT index added 1 to the 432s. Junk bond funds drifted lower & Treasuries continued to be heavily sold, raising yields substantially. Oil was only fractionally higher in the 88s after an early gain & gold retreated 17 to 1789 following yesterday's advance (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)
Pres Biden touted US job growth, which unexpectedly accelerated in July, saying "more people are working than at any point in American history," & using jobs numbers to prove he has kept his campaign promise to "rebuild the middle class." Employers added 528K jobs in Jul, blowing past the 250K jobs forecast. The unemployment rate, meanwhile, edged down to 3.5%, the lowest level since the COVID-19 pandemic began more than 2 years ago. "Today, the unemployment rate matches the lowest it’s been in more than 50 years: 3.5%. More people are working than at any point in American history," Biden said. "That’s millions of families with the dignity and peace of mind that a paycheck provides. "And, it’s the result of my economic plan to build the economy from the bottom up and middle out," Biden continued. "I ran for president to rebuild the middle class — there’s more work to do, but today’s jobs report shows we are making significant progress for working families." The job growth defied fears of a slowdown in hiring, even as the labor market confronts twin threats of scorching-hot inflation & rising interest rates. The US has now replaced all of the jobs that were lost during the pandemic. Job gains were broad-based in Jul, with leisure & hospitality leading the way in hiring, adding 96K new workers. That was followed by professional businesses services (89K), health care (70K) & gov (57K). Construction contributed 32K new jobs, while manufacturing added 30K. While many economists have argued the strong jobs market has so far prevented the US from sliding into a downturn, job growth momentum is expected to cool markedly in coming months as companies cut staff in order to accommodate for lower demand.
Biden touts jobs numbers, claims progress in rebuilding middle class
Sen Kyrsten Sinema signed off on sweeping Dem legislation that would provide new spending to mitigate climate change & extend health care access while taxing corps. The announcement likely unlocks the votes needed to pass the bill in the Senate. Sinema said her support came after Dem leaders agreed to remove a provision on closing the carried interest tax loophole that enables wealthy hedge fund & investment managers to pay lower taxes. “We have agreed to remove the carried interest tax provision, protect advanced manufacturing, and boost our clean energy economy in the Senate’s budget reconciliation legislation,” Sinema said. “Subject to the Parliamentarian’s review, I’ll move forward.” Her comments on the bill, known as the Inflation Reduction Act, came after a week-long silence that left many Dems nervous that the enigmatic centrist may not sign off on it. Dems have no hope of winning any Rep support, meaning all 50 senators in the caucus are needed to pass the measure. Senate Majority Leader Chuck Schumer voiced confidence that Dems now have unanimous caucus support for the bill. “I am pleased to report that we have reached an agreement on the Inflation Reduction Act that I believe will receive the support of the entire Senate Democratic conference,” Schumer said. “The final version of the Reconciliation bill, to be introduced on Saturday, will reflect this work and put us one step closer to enacting this historic legislation into law.”
Sen. Kyrsten Sinema signs off on Democrats’ big agenda bill, paving the way for Senate passage
China said it would halt cooperation with the US on areas including military relations & climate change while imposing sanctions against House Speaker Nancy Pelosi, as Beijing stepped up its retaliation to her Taiwan visit. The new measures were announced as military drills Beijing launched furiously in the wake of her trip earlier this week sent warplanes, naval ships & missiles menacingly close to this small island democracy despite growing criticism. The US delegation's unannounced visit to Taiwan has fueled a mounting crisis, raising fears of conflict in the region & stoking tensions between DC, its allies & Beijing. Beijing said it will cancel military phone calls between area commanders, defense meetings & cooperation on anti-drug efforts with the US & will no longer take part in talks on maritime safety & climate change. Earlier, China took personal action against Pelosi, announcing sanctions on the speaker & her immediate family in response to what the Chinese Foreign Ministry called her “egregious provocations.” The unspecified sanctions, China's latest retaliation for the brief trip to the self-ruling island it claims as its own territory, came as Pelosi vowed not to let Beijing isolate Taiwan, while DC & its allies urged de-escalation. “They may try to keep Taiwan from visiting or participating in other places, but they will not isolate Taiwan by preventing us to travel there,” Pelosi said in Japan, the last stop of her Asia tour. China's response had until now largely been directed at the island of over 23M people that lies just across the Taiwan Strait.
China halts military, climate ties with U.S. and sanctions Pelosi in fury over Taiwan visit
Gold futures finished lower, coming off a one-month peak as the US jobs report showed employers hired far more workers than expected in Jul, pushing Treasury yields & the $ higher. Gold futures for Dec dropped $15 (0.9%) to finish at $1791 per ounce. Based on the most-active contract, gold gained 0.5% for the week. The US economy added a surprisingly strong 528K new jobs in Jul, the Labor Dept said. The unemployment rate fell to pre-pandemic levels despite two straight quarters of GDP economic contraction. Economists had called for a 258K payrolls gain. The unemployment rate slipped to 3.5% from 3.6%. The robust Jul jobs report is seen reinforcing expectations the Federal Reserve will continue to move aggressively to tighten monetary policy as it attempts to bring down the highest inflation in more than 4 decades without spiking unemployment & causing a recession. This week, gold prices topped the key $1800 level to a one-month high as investors hope the employment report could help clear away some recession fears. However, Federal Reserve officials warned that achieving a soft landing for the economy as they raise interest rates to battle inflation will be difficult. Fed-funds futures traders now priced in a 67.5% chance of a 75 basis point rate hike in Sep, up from 34% a day ago. The Bank of England yesterday hiked interest rates by 50-basis-point as it predicted UK inflation may hit double digits by the end of 2022, while warning that a long recession is on its way. Treasury yields jumped sharply today in the wake of the employment report with the yield on the 2-year Treasury note rising to 3.218%, while the 10-year Treasury note climbed to 2.841%. The $ index was up 0.9% to 106.62, after sliding 0.7% yesterday, the largest fall since Jul 19, making the yellow metal less appealing for other currency holders. US stocks traded higher earlier this week, booking powerful gains after rosy corp earnings & better-than-expected manufacturing data calmed recession fears. However, the benchmarks were lower today after robust Jul jobs report fueled Fed rate hike expectations.
Gold ends lower as yields, dollar rebound after strong U.S. jobs report
Oil futures bounced to a higher close, but suffered sharp weekly losses as a much stronger-than-expected US jobs report failed to fully dispel fears of a global economic slowdown. West Texas Intermediate crude for Sep rose 47¢ (0.5%) to close at $89.01 a barrel, leaving it with a 9.7% weekly loss. The US benchmark closed yesterday at its lowest since Feb 2. Oct Brent, the global benchmark, rose 80¢ (0.9%) to settle at $94.92 a barrel after closing yesterday at its lowest since Feb 18. Brent suffered an 8.7% weekly loss. Oil has dropped sharply this week, with fears of a sharp global economic slowdown & its potential impact on demand appearing to move front & center for investors. Worries were amplified yesterday after the Bank of England delivered a half-point interest rate increase & warned that a lengthy UK recession would likely take hold later this year. Crude bounced off lows today after data showed the US economy added 528K jobs in Jul, far exceeding the consensus estimate of 258K as the unemployment rate dropped to 3.5% from 3.6%. Major central banks, including the Federal Reserve, have moved to aggressively raise interest rates in an effort to rein in inflationary pressures, while also stoking fears of sparking a recession. Oilfield-services firm Baker Hughes said the number of US oil rigs fell by 7 this week to 598, but was up 211 from a year ago.
Oil bounces, but suffers sharp weekly loss as demand worries overtake supply concerns
This was a flattish kind of week with the Dow ending down only 44. A better than expected jobs report today did not generate excitement by investors. That is not a good signal for next week.
Dow Jones Industrials
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