Dow soared 701 (near session highs), advancers over decliners 6-1 & NAZ gained 139. The MLP index gained 4+ to the 226s & the REIT index jumped 8+ to the 366s. Junk bond funds rose along with stocks & Treasuries saw heavy selling, raising yields. Oil finished up 1+ to the 71s & gold dropped 28 to 197 (more on both below).
AMJ (Alerian MLP Index tracking fund)
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US consumer confidence slipped to a 6-month low in May as Americans' of the labor market softened, but more households planned to purchase motor vehicles & other big-ticket items over the next 6 months, which could support economic growth this qtr. The ebb in confidence was concentrated among consumers aged 55 years & older, as well as among households with annual incomes in the $50-99K range. Consumers expected inflation to stabilize at higher levels over the next year. The consumer confidence index slipped to 102.3 this month, the lowest level since last Nov, from an upwardly revised 103.7 in Apr. The forecast expected the index to fall to 99 from the previously reported reading of 101.3. The cutoff date for the survey, which places more emphasis on the labor market, was May 22. A fight to raise the gov's borrowing cap weighed on the University of Michigan's consumer sentiment measure this month. Consumers were less optimistic on the labor market, with the share viewing jobs as "plentiful" falling to the lowest level since Apr 2021 & the proportion of those saying jobs were "hard to get" rising to a 6-month high. The survey's labor market differential, derived from data on respondents' views on whether jobs are plentiful or hard to get, fell to 31.0, the lowest since Apr 2021, from 36.9 in Apr, suggesting the labor market was loosening up. This measure correlates to the unemployment rate from the Labor Dept.
US consumer confidence ebbs; monthly house prices rise
The rate of inflation has shown signs of easing, following the highest spike in 4 decades. Yet the shock of rising prices continues to have an impact on consumers' psyches. “The typical U.S. consumer is looking at the gas station or their grocery store and seeing prices elevated and not coming down anytime soon,” said Ataman Ozyildirim, senior director of economics at The Conference Board. The nonprofit think tank's consumer confidence index declined in May amid “gloomy” expectations. Consumers' perception of current employment conditions deteriorated the most, with those who said jobs are “plentiful” dropping to 43.5% from 47.5% in Apr. Meanwhile, expectations for inflation were stable, but still high, with inflation expected to average 6.1% over the next 12 months. “When anecdotally we ask consumers what’s your top concern on the economy, prices and inflation still come out as the top concern,” Ozyildirim said. A growing share of Americans, 61%, now say price increases have caused financial hardship for their households, according to Gallup, up 6 percentage points from Nov. For many consumers, the big question is how soon they may see financial relief.
Even as inflation rate subsides, prices may stay higher. Here’s why
Ford & Lincoln's May sales were up 10.7% compared to last year as supply of many key models continues to improve. The automaker delivered 171K vehicles, including 164K Fords,
making it the best-selling brand, while Lincoln deliveries dropped by
14.4% to just 6.5K vehicles. A total of 71K F-Series trucks were delivered during the month, which was an increase of 42.7% & the most since last Dec. Other
strong-selling models included the Maverick compact pickup (+14.4%),
Escape compact SUV (+31.1%), Transit van (+35.1) & Expedition
full-size SUV (+52.7%). Deliveries of the electric Mustang Mach-E & F-150 Lighting were down by a combined 13.0% due to some production downtime caused by updates at their factories that will significantly increase output later this year. According to Automotive News, the 5 other major automakers reporting May sales saw a combined 25.6% increase in May, with Mazda (+117), Honda (+58) & Subaru (+28) leading the way. The stock rose 28¢.
If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F_aid=CD3289&a_bid=6aeoso5b6f7
Ford trucks helped drive sales up 10.7% in May as EVs slip
Gold futures declined pressured by a stronger than expected US jobs report, but prices for the metal held onto a modest gain for the week to post their first weekly rise in about a month. Gold was almost in the clear as a couple of Federal Reserve doves had markets convinced that policymakers would skip a Jun rate hike. If the jobs data had cooperated, some traders were making the case that they might even be done. However, the US economy is too resilient & that should keep the risk of more Fed tightening on the table. Gold for Aug fell $25 (1.3%) to settle at $1969.
Gold Futures Finish Lower after the U.S. Jobs Data, but Hold Onto a Gain for the Week
Oil futures climbed, contributing to a more than 1% weekly gain in US benchmark crude prices. The market saw a sharp decline yesterday on expectations that OPEC+ wasn't likely to cut production at its meeting next month, but the risk of further sharp falls is being mitigated somewhat by the fact that the markets know the US govt is a buyer of oil below $70, as it looks to refill the Strategic Petroleum Reserve. Jul West Texas Intermediate crude rose 84¢ (1.2%) to settle at $72.67 a barrel, with prices for the front-month contract up 1.4% for the week.
Oil futures gain more than 2% for the session, pare their loss for the week
Stocks surged after a strong May jobs report & as Pres Biden was set to sign a budget bill into law. Dow began the day in the black & buyers kept coming all day. For the shortened week, Dow was up 680.
Dow Jones Industrials
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