Dow retreated 108 on profit taking, decliners over advancers 3-2 & NAZ went down 93. The MLP index inched higher in the 229s & the REIT index was even the 372s. Junk bond funds edged higher & Treasuries had more selling, bringing higher yields. Oil went up 1+ to the 71s & gold was flattish at 1971 (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)
Sentiment among US consumers rose in early Jun, reaching its highest level in 4 months as inflation eased & the US resolved the debt-ceiling deadline. The preliminary reading of the consumer sentiment index rose to 63.9 in early Jun from 59.2 in May, according to data from a survey carried out by the University of Michigan. The forecast expected the indicator to be at 60.2. Both consumers' current & short-term outlook improved. The survey's index measuring current economic conditions rose to 68.0 from 64.9 the prior month. The measure assessing short-term expectations climbed to 61.3 from 55.4 in May. "Consumer sentiment lifted 8% in June, reaching its highest level in four months, reflecting greater optimism as inflation eased and policy makers resolved the debt ceiling crisis," the survey's director Joanne Hsu said. "As it stands, though, sentiment remains low by historical standards as income expectations softened. A majority of consumers still expect difficult times in the economy over the next year," Hsu added. Consumers' year-ahead inflation expectations fell to 3.3% in Jun from 4.2% in May, the lowest level that figure has reached since Mar of 2021. Inflation expectations for the next 5 years, a closely watched indicator for Federal Reserve's officials, were little changed from May, at 3.0%.
U.S. Consumer Sentiment Improved in Early June as in flation eases
High mortgage rates & a lack of inventory continued to plummet the housing market, according to the latest report by the real-estate brokerage Redfin. New listings of homes for sale declined 19% year-over-year during the 4 weeks ending May 7, Redfin reported. "But despite the inventory crunch, pending sales have increased over the last week, as they typically do this time of year," Redfin said in its report. "Additionally, mortgage-purchase applications are up 5% on a seasonally adjusted basis. The pool of buyers is small but determined, with nearly half of the homes that do sell doing so within two weeks. That share has increased over the last month, which isn’t typical for this time of year." In addition, the seasonally adjusted Redfin Homebuyer Demand Index was up from a month during the week ending May 7. "Demand is barely declining from year-ago levels because buyers were backing off quickly at this time last year as mortgage rates rose above 5% for the first time since 2009," Redfin reported. Moreover, Google searches for "homes for sale" increased from a month earlier during the week ending May 6. Nonetheless, lack of available homes still posed a roadblock for some potential homebuyers, Redfin added. "This spring’s housing market is hot but cold, with scant listings making it less active than usual but fast and competitive at the same time" Redfin Deputy Chief Economist Taylor Marr said. "The good news is that buyers are out there, trying to find a seat in a game of musical chairs. The bad news is there aren’t enough chairs. A lot of potential home sales are locked up until mortgage rates come down to a level for which current owners would be willing to trade in their 3% rate. The problem is that’s unlikely to happen anytime soon, as although inflation is steadily coming down from last year’s record-high levels, it’s still above target." Despite the increase in home sales, potential homebuyers are finding themselves in a high-price environment, according to the latest CoreLogic Case-Shiller Indices report. Home prices across the US increased by 2% annually in Feb after 7 consecutive months of price drops, CoreLogic reported.
Fewer homes are selling, but they're selling fast: Redfin
The Food & Drug Administration recommended that Covid vaccine manufacturers make single-strain shots for the fall that target omicron subvariant XBB.1.5, the dominant strain of the virus nationwide. “Based on the totality of the evidence, FDA has advised manufacturers who will be updating their COVID-19 vaccines, that they should develop vaccines with a monovalent XBB 1.5 composition,” the agency said. Monovalent means a shot is designed to protect against one variant of Covid. XBB.1.5 is a descendant of the omicron variant, which caused cases in the US to spike to record levels early last year. It is also one of the most immune-evasive strains to date. XBB.1.5 accounted for nearly 40% of all Covid cases in the US in early Jun, according to data from the Centers for Disease Control & Prevention. That proportion is slowly declining, while cases of the related variants XBB.1.16 & XBB.2.3 are rising. The FDA's decision is consistent with what an advisory panel to the agency recommended yesterday. That panel unanimously voted that new jabs should be monovalent & target a member of the XBB family. Advisors also generally agreed that targeting XBB.1.5 would be the most ideal option.
FDA recommends that updated Covid shots target an omicron subvariant this fall
Gold futures inched higher, posting a loss for the week a day after tapping their lowest intraday level since May. Gold held its own despite all the central bank fireworks & as stocks had the best week since Mar. A gold plunge did not occur as the hawkish FOMC statement & staff projections were followed by a hesitant Fed Chair Jerome Powell that refused to commit to a Jul hike. Gold for Aug inched up chump change to settle at $1971 an ounce. Prices based on the most-active contract ended the week with a decline of 0.3%
Gold Futures Mark First Weekly Loss in 3 Weeks
Oil futures climbed, with US benchmark prices posting a gain of more than 2% for the week. Chinese oil demand has been the biggest uncertainty in the market, with the Intl Energy Agency's (IEA) last monthly report predicting strong growth in H2. Yesterday a report said that Chinese authorities were preparing aggressive economic stimulus measures. That suggests the IEA’s expectations might prove right, which would mean a much stronger market from Q3. Jul West Texas Intermediate crude gained $1.16 (1.6%) to settle at $71.78 a barrel. Prices based on the front-month contract marked their highest finish since Jun 7 & ended the week 2.3% higher.
Oil futures gain more than 2% for the week
Dow rose 423 last week & is back above 34K, as it has been many times in the last year. Jun has been a good month for stocks (see below). Additionally the stock market looks tired. Markets will be closed on Mon for the federal holiday.Dow Jones Industrials
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