Dow closed down 4 with buying into the close that trimmed losses, decliners over advancers 2-1 & NAZ went up 128. The MLP index fell 2+ to the 224s & the REIT index declined 5+ to 361. Junk bond funds slid lower & Treasuries continued under selling pressure, raising yields. Oil pulled back a hefty 3+ to the low 69s & gold was off 19 to 1924 (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)
The number of Americans applying for unemployment benefits remained relatively elevated last week, potentially another signal that Federal Reserve rate hikes are beginning to cool a surprisingly resilient labor market. Applications for jobless claims were 264K for last week, the same as the previous week's revised number, the Labor Dept reported. That's slightly more than analysts were expecting. The claims numbers for the past 2 weeks are the highest since Oct 2021. The 4-week moving average of claims, which smooths out some of the week-to-week volatility, rose by 8K to 255K, the highest level since Nov 2021. Jobless claims in the past 3 weeks have pushed closer to 300K after mostly being in the high 100K to low 200K range since the fall of 2021. But that's likely not enough for Fed officials, who have said in the past that the unemployment rate needs to rise well past 4% to bring inflation down. Labor analysts are reticent to take the recent rise in benefit applications at face value after fraudulent claims in some states elevated numbers for a few weeks this spring. The fact that continuing claims fell after 3 weeks of higher applications also raised eyebrows. But if unemployment claims remain at or around 260K, it could point to a notable cooling of the labor market.
Weekly US applications for unemployment aid remain elevated
Boeing (BA), a Dow stock, supplier Spirit AeroSystems
(SPR) halted work at a Wichita, Kansas, plant on today after workers voted
against a new labor deal & for a strike. Spirit makes fuselages for
the 737 Max & pylons for Airbus A220s at the plant. “In
light of the decision to strike by Spirit AeroSystems employees
represented by the Intl Association of Machinists & Aerospace
Workers today, Spirit will suspend factory production prior to the
expiration of the contract,” SPR said. The
issue comes as BA is trying to ramp up production of 737 Max
planes. BA has some fuselages in inventory but declined
to say how many or what the impact of the production halt would be on
Boeing’s output of 737s. “I want to encourage all of us to stay
focused on our task at hand, which is to continue to build and deliver
the finest airplanes in the world,” Stan Deal, CEO of BA's
commercial airplane unit, said. “We
will update all of you as we gain further insights from our partners at
Spirit.” The strike is scheduled to begin just after midnight on
Sat, the union said. BA stock fell 6.45 (3%) & SPR stock fell 2.81 (9%).
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA_aid=CD3289&a_bid=6aeoso5b6f7
If you would like to learn more about SPR, click on this link:
club.ino.com/trend/analysis/stock/SPR_aid=CD3289&a_bid=6aeoso5b6f7
Key Boeing supplier stops production at Wichita plant after workers vote to strike
Fans have helped keep the Camaro alive since it was
introduced as a competitor to the Ford Mustang (F) in 1966. But their
enthusiasm may not be enough. Parent company General Motor's (GM) said the car is going away after the 2024 model year, & the automaker is not saying much about what will follow. Tightening
regulations, slumping sales in the segment & a growing preference
for crossovers & sport utility vehicles have all but doomed the car & threatened its competitors. The Camaro has been discontinued before, in 2002. It was brought back as a concept car in 2006 & put into production in 2009 for the 2010 model year. It sold 61K units in 2009, the first year it was reintroduced. Thru 2014, sales were consistently in the 80K-unit range, outperforming rival Mustang. But by 2019, sales had fallen to about 48K units, down from 86K 5 years earlier. GM stock fell 35¢.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA_aid=CD3289&a_bid=6aeoso5b6f7
Why GM is sunsetting the classic Chevrolet Camaro
Gold prices fell to a the lowest in 3 months as the $ & bond yields rose after Federal Reserve chair Jerome Powell told lawmakers interest rates are likely to further rise as the central bank looks to slow the economy to lower inflation. Gold for Aug closed down $21 to settle at $1923 per ounce, the lowest since Mar 14. The drop comes as Powell addressed the Senate Banking Panel, telling them that interest rates are likely to continue on an upward path & no cuts to rates are coming soon. The $ moved higher, making gold more expensive for intl buyers. The ICE dollar index was last seen up 0.34 points to 102.41. Bond yields also moved up. bearish for gold since it offers no interest. The 2-year Treasury note was last seen paying 4.791%, up 7.8 basis points, while the 10-year Treasury note was up 6.5 basis points to 3.79%.
Gold Falls to a Three-Month Low as the Dollar and Treasury Yields Rise as Powell Says More Rate Hikes Coming
Oil futures fell 4%, as a bigger-than-expected Bank of England rate hike prompted worries about the economy & fuel demand that outweighed support from a surprise draw in US oil supplies. Brent futures settled down $2.98 (3.9%) to $74.14 a barrel. US West Texas Intermediate (WTI) crude futures were down $3.02 (4.2%) at $69.51. The benchmarks erased gains from the previous session, during which corn & soybean prices raced to multi-month highs, raising expectations that crop shortfalls could lower biofuels blending & increase oil demand. The Bank of England raised interest rates by a bigger-than-expected ½ a percentage point to fight stubborn inflation. It was the central bank's 13th straight rate hike. Higher interest rates could slow economic growth & reduce oil demand.
Oil plunges 4% as interest rate hikes outweigh lower US oil supplies
The Jun rally is coming to an end. That is due to the threat of higher interest rates which may bring on a recession that so many have talked about.
Dow Jones Industrials
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