Dow surged 524, advancers over decliners about 4-1 & NAZ soared 287. The MLP index added 1+ to the 224s & the REIT index jumped 7+ to the 369s. Junk bond funds fluctuated & Treasuries were heavily sold, which increased yields. Oil rose in the 74s & gold inched up 1 to 1997 (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)
Prices for food, energy & metals are likely to continue seeing downward pressure in 2023, but there will likely be little relief for consumers with commodity prices still sitting above prepandemic levels, keeping inflation pressures high, according to a new report from the World Bank. Commodity markets have been under pressure this year, with energy, food & metal prices all seeing major drops since the start of the year. As a whole, commodities have fallen 14% since Jan, while prices are now 32% below their historic highs set in June last year as the full effects of the war in Ukraine were being felt by markets, the World Bank said in its Commodity Markets Outlook report. It now expects commodity prices to fall 21% this year, which would be the steepest decline in prices since the pandemic, before steadying in 2024. Despite the fall, consumers are likely still going to feel the pinch, with price levels for all major commodity groups still much higher than they were prior to the pandemic. The report in particular noted the effects felt on food prices, with fertilizer prices reaching an all-time high in real terms last year, while food prices were at their 2nd-highest level in real terms since the grain shortages of 1973-75. "Elevated food prices contribute to higher food insecurity, with severe implications for poorer populations in many developing economies," the report said, adding that annual domestic food-price inflation across 146 countries averaged 20% in Feb 2023, the highest level over the past 2 decades. The issues felt within food have been offset to an extent by falls in energy prices, according to the bank. It noted that energy prices were 20% lower during Q1-2023 compared to Q4-2022, led by drops in oil & natural gas. However, the bank expects much of the fall that has already occurred to now be steady for the remainder of the year, with prices possibly lifting in 2024. The report pointed to a redirection of trade flows helping to lower prices, with Russian energy & minerals now going toward China & India as well as emerging markets, away from Europe. Coal & gas markets have also seen major switches in terms of trade flows too.
Global commodity prices likely to slip in 2023, World Bank says
Applications for unemployment benefits in the US fell last week as the labor market continues to show strength despite some weakness in other parts of the economy. The number of Americans filing for jobless claims for last week fell by 16K to 230K, the Labor Dept reported. The forecast had expected 248K claims in the latest week. The 4-week moving average of claims, which flattens some of the week-to-week volatility, fell by 6K to 236K. At the start of the year, weekly claims were running around 200K & they have gradually moved higher. Overall, 1.86M people were collecting unemployment benefits in the latest week, 3K fewer than the previous week. The weekly claims numbers are a proxy for layoffs & continue to show that American workers are enjoying unusual job security despite rising interest rates, economic uncertainty & fears of a looming recession. The US job market has remained healthy in spite of other weak spots in the broader economy. The unemployment rate came in at 3.5% last month, a tick above Jan's ½-century low 3.4%. Employers added 236K jobs in Mar, down from 472K in Jan & 326K in Feb, but still strong by historic standards.
Weekly jobless claims unexpectedly drop by 16,000
Gap (GPS) will lay off 1800 employees as it seeks to rein in costs & streamline operations. The
cuts, which will affect workers at the company's headquarters & upper
field workforce, are part of a restructuring plan that will help the
company save Ms in operating costs. In Mar, the company,
whose portfolio includes Old Navy, Gap, Banana Republic & Athleta
brands, announced it was taking several actions to "simplify and
optimize its operating model and structure," including decreasing
management layers & creating a more consistent organizational
structure across it brands, according to the filing. Interim CEO Bob Martin said that the company is
"taking the necessary actions to reshape Gap Inc. for the future." "These
changes include the consistent brand leadership structures we announced
last month aimed at flattening the organizational structure to improve
the quality and speed of decision-making, while in turn reducing
overhead expense," he continued. The company expects the actions
announced in Mar to further simplify & optimize operations,
including the reduction of its workforce, will result in annualized
pre-tax savings of approximately $300M. GPS reported that net sales fell 6% to $15.6B for fiscal year
2022, which ended on Jan 28. Sales at stores open for at least a year
were also down 7% year over year. The stock was up a nickel.
If you would like to learn more about GPS, click on this link:
club.ino.com/trend/analysis/stock/GPS_aid=CD3289&a_bid=6aeoso5b6f7
Gap to lay off 1,800 employees
Gold futures moved modestly higher, holding ground below $2000 an ounce to finish below that level for a 4th time in 5 sessions. Gold's corrective to consolidative bias should prevail ahead of next week's FOMC policy decision, with the downside being limited by banking sector worries. Gold for Jun rose $3 to settle at $1999 an ounce.
Gold Futures Gain, but Hold Below $2,000
Oil futures finished higher as traders weighed support from a 2nd straight weekly decline in US crude inventories against pressure from worries about the outlook for energy demand. The Energy Information Administration reported a weekly decline of 5.1M barrels but there's been little evidence thus far that the demand outlook is set to improve. Jun West Texas Intermediate crude edged up by 46¢ (0.6%) to settle at $74.76 a barrel after settling yesterday with a loss of 3.6%.
Oil Prices Finish Higher as Traders Eye Demand Prospects
Bulls came out of hiding & generated excitement to buy stocks all day. The IMF report (above) was a plus for investors & earnings reports brought cheers. However sluggish GDP growth data for Q1 is a cloud that needs to be watched!
Dow Jones Industrials
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