Dow jumped 212 near session highs, advancers over decliners 3-1 & NAZ advanced 219. The MLP index stayed in the 224s & the REIT index rose 4+ to the 368s. Junk bond funds were in demand & Treasuries saw selling, raising yields. Oil was off 1+ to the 67s & gold retreated 9 to 1824 (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)
US consumer confidence increased in Jun to the highest level in nearly 1½ years, but fears of a recession lingered, according to a survey. The Conference Board said its consumer confidence index rose to 109.7 this month, the highest reading since Jan 2022, from 102.5 in May. The forecast had expected the index to climb to 104.0. "Greater confidence was most evident among consumers under age 35, and consumers earning incomes over $35,000," said Dana Peterson, chief economist at The Conference Board. "Nonetheless, the expectations gauge continued to signal consumers anticipating a recession at some point over the next 6 to 12 months." The Conference Board survey showed consumers' 12-month inflation expectations dipped to 6.0% from 6.1% last month.
U.S. consumer confidence approaches 1-1/2-year high in June
The Inform Consumers Act, a new law that aims to curb organized retail theft & the sale of counterfeit & harmful products on online platforms, takes effect today as more retailers blame theft as a reason for lower profits. The new law requires online marketplaces, to verify & share information on 3rd-party sellers that handle a high volume of transactions on their platforms in an effort to deter bad actors from selling stolen or harmful goods. If the companies fail to get in line, they could face more than $50K in fines for each violation. The bipartisan legislation, which stands for Integrity, Notification & Fairness in Online Retail Marketplaces, passed in Dec as part of an omnibus spending bill, more than a year after it was introduced by Reps Jan Schakowsky & Gus Bilirakis. “The goal of the INFORM Consumers Act is to add more transparency to online transactions and to deter criminals from acquiring stolen, counterfeit, or unsafe items and selling them through those marketplaces,” the Federal Trade Commission, which will be tasked with enforcing the law along with state attorneys general, said. “The Act also makes sure online marketplace users have a way to report suspicious conduct concerning high-volume third party sellers.” The law comes after trade associations & retailers lobbied Congress about an alarming uptick in retail theft that they say was driven by lax regulations governing 3rd-party sellers & verification processes on online platforms. They claim organized crime groups steal merchandise from stores & then resell it on online marketplaces, typically at a lower amount than the sticker price.
A law aimed at organized retail theft takes effect today. Here’s how it will work
Walgreens Boots Alliance (WBA), a Dividend Aristicrat, cut its profit forecast for the year as the pharmacy chain continued to face "significantly lower" During the 3-month period ending in Jun, the company administered
fewer than 1M COVID shots, a huge drop-off from the 4.7M
that were administered demand for COVID tests & vaccines. Meanwhile,
WBA administered 2.4M vaccines during the qtr, a
decline from the 11.8M vaccines administrated during the same
period a year ago. The
lower demand for COVID-related services coupled with "a more cautious
and value-driven consumer, and a recently weaker respiratory season
created margin pressures in the quarter," CEO Rosalind Brewer said. Brewer said the company's revised guidance is an "appropriately cautious
forward view in light of consumer spending uncertainty, while still
demonstrating clear drivers of a return to operating growth next fiscal
year." During its 3rd qtr, the company reported that sales in US retail stores
that were open for at least a year slipped 0.2%, which included a
"headwind from lower levels of OTC [over the counter] test kits." Adjusted operating income decreased $4M to $1B from the
year-ago qtr, which reflected a 22% headwind from lower COVID-19
vaccination & testing volumes as well as continued reimbursement
pressure & increased labor costs. WBA now expects fiscal 2023 EPS of $4.00-4.05, down from $4.45-4.65. The stock fell 2.95 (9%).
If you would like to learn more about WBA, click on this link:
club.ino.com/trend/analysis/stock/WBA_aid=CD3289&a_bid=6aeoso5b6f7
Walgreens slashes profit outlook as demand for COVID shots, tests wanes
Gold closed lower despite a weaker $ as investors moved to add risk following unexpectedly robust US economic data. Gold for Aug closed off $10 to $1923 per ounce. The rise comes as the US reported May durable-goods orders rose 1.7%, while the consensus forecast called for a 0.9% drop according to Marketwatch. The better than expected performance may firm expectations the Federal Reserve will follow thru on forecasts for another 50 basis-point rise in US interest rates before year end. As well, consumer confidence is sharply higher this month, rising to 109.7 from 102.5 in May & ahead of expectations for 104. The $ weakened as investors move to add risk following the data, making gold more affordable for intl buyers. The ICE dollar index was last seen down 0.23 points to 102.46. Treasury yields rose, bearish for gold since it offers no interest. The 2-year Treausry note was last seen paying 4.766%, up 9.8 basis points, while the yield on the 10-year Treasury note was up 4.08 basis points to 3.764%.
Gold Falls as the Dollar Drops as Investors Add Risk Following Bullish Economic Data
US crude futures finished down 2.4% at $67.70 a barrel, the lowest closing price since Jun 12. The market appears to have quickly discounted any meaningful supply risk tied to the short-lived uprising by Russian paramilitary forces over the weekend. Overall, headwinds continue to come from economic uncertainty tied to central bank policy & generally sluggish growth to start the year. In the US, gasoline demand should garner extra attention in the weeks ahead as traders monitor the expected jump in discretionary travel tied to the 4th of Jul holiday. Brent crude also finished lower, at about $72.
WTI Oil Ends at a 2-Week Low on Economic Weakness
After 6 straight declines, buyers returned looking for bargains & kept buying throughout the session. However the Dow is struggling to get a over 34K in a meaningful way (shown below). The 2 year Treasury yield remains around 1% above the yield on the 10 year note. That is a classic signal of a coming bear market, although it has been in effect for many months. At the end of next month, Q2 GDP growth will be reported. It should be interesting.
Dow Jones Industrials
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