Dow gave back 74, advancers slightly ahead of decliners & NAZ edged up 36. The MLP index added 1+ to the 226s & the REIT index slid back fractionally to the 366s. Junk bond funds crawled higher & Treasuries were purchased which reduced yields. Oil bounced back 1+ to the 69s & gold was off 2 to 1921 (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)
Flight disruptions mounted as severe storms & staffing issues kicked off a rocky start to summer. More than 7700 flights U.S. flights were delayed today & nearly 2200 were canceled, FlightAware data showed, as thunderstorms that derailed thousands of trips over the weekend lingered in airspace that is heavily congested on a clear-weather day. That's on top of more than 8800 US delays & close to 2250 cancellations yesterday. The Federal Aviation Administration paused flights bound for New York's LaGuardia Airport, JFK Intl Airport & Newark Liberty Intl Airport in NJ. Delays were averaging 3 hours or longer at those airports. The FAA said that the thunderstorms were blocking arrival & departure routes. The disruptions come ahead of the busy Fourth of July holiday travel period, when Ms are expected to fly. The Transportation Security Administration said it could screen more travelers than in 2019, before the pandemic, raising competition for spare seats. The Biden administration has pressured airlines to improve their operations after widespread flight disruptions last spring & summer, which prompted carriers to trim their overambitious schedules. But the industry struggled to recover this past weekend from a series of thunderstorms that didn't let up for days. Thunderstorms are difficult for airlines because they can form with less warning than other major weather obstacles like winter storms or hurricanes. Rolling delays could force crews to reach federally mandated workday limits & further worsen disruptions. About 30K flights have arrived late since Sat, FlightAware data showed, with cancellation rates from Sat-Mon up more than 3 times the average for the year. Some airline execs have also blamed some of the disruptions on shortages of air traffic controllers.
Severe weather, FAA shortfalls kick off rocky start to summer air travel
Mortgage rates turned higher again last week. But the increase did not cut into mortgage demand, as buyers sought newly built homes. Total mortgage application volume rose 3% compared with the previous week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. An additional adjustment was made for the Juneteenth holiday. Applications for a mortgage to purchase a home rose 3% for the week but were 21% lower year over year. These applications have increased for 3 straight weeks to the highest level since early May, despite still-high mortgage rates. “New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market,” said Joel Kan, MBA's VP & deputy chief economist. “Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages.” Sales of newly built homes in May soared 12% compared with Apr & were 20% higher than May 2022, according to the US Census. Builders are driving demand in part by offering incentives, like paying down mortgage rates. Last week the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726K or less) increased to 6.75% from 6.73%, with points remaining at 0.64 (including the origination fee) for loans with a 20% down payment. The average rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726K) rose more sharply to 6.91% from 6.80%. “The spread between the jumbo and conforming rates widened to 16 basis points, the third week in a row that the jumbo rate was higher than the conforming rate,” Kan said. “To put this into perspective, from May 2022 to May 2023, the jumbo rate averaged around 30 basis points less than the conforming rate.”
Mortgage demand grows, driven by sales of new homes
Amazon (AMZN) will boost its data center operations in Ohio as part of a massive new investment in the Midwestern state by the company's cloud-computing segment. The
estimated $7.8B investment from Amazon Web Services (AWS) will go
toward new data centers with "computer servers, data storage drives,
networking equipment and other forms of technology infrastructure used
to power cloud computing," according to Ohio
Gov Mike DeWine's office. It will do so before the start of 2030. AMZN said it has previously invested in state in the past 7 years, bringing the total to a projected $14B. The governor's office said where the upcoming data centers will be
constructed will be revealed "at a later date" once AMZN chooses from
the numerous sites in central Ohio
it has been considering. Franklin & Licking counties are home to
existing AMZN data center campuses. The governor’s office said where the upcoming data centers will be
constructed will be revealed "at a later date" once AMZN chooses from
the numerous sites in central Ohio. AWS’s workforce in Ohio last year included nearly 1000 direct employees. In Apr, as AMZN reported over 1.4M people worked either
full-time or part-time for the company across the globe. For the qtr, its net sales came were $122.5B, roughly $21.3B of which came from AWS. Net income
was $3.7B. AWS saw $80.1B in net sales in 2022, marking a nearly 29% increase from the prior year. The stock was down pennies.
If you would like to learn more about AMZN, click on this link:
club.ino.com/trend/analysis/stock/AMZN_aid=CD3289&a_bid=6aeoso5b6f7
Amazon announces massive $7.8 billion investment in red state
Gold futures declined to mark their lowest finish since mid-Mar. Essentially, the only thing moving the gold market has been Fed rhetoric & actions. However, US
interest rates nearing their peak & gold may start discounting the
next big event, which could take gold
to higher levels. Gold
for Aug declined by $1 to settle at
$1922 an ounce, the lowest most-active contract finish
since Mar 14.
Gold futures settle at lowest since mid-March
Oil futures finished higher after the Energy Information Administration reported that US crude supplies fell by nearly 10M barrels last week. There are relatively few positive drivers for oil at the current time, including the 9.6M-barrel weekly draw in US crude supplies reported by the EIA. However, the prospect of higher interest rates going forward appears to be the foremost concern for now as higher rates could lead to a recession. Aug West Texas Intermediate crude gained $1.86 (2.8%) to settle at $69.56 a barrel.
Oil futures settle higher after U.S. data show a weekly drop in supplies
Powell's words & actions are driving the stock market. As a result, the Dow will likely continue to drift sideways as is has for months.
Dow Jones Industrials
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