Dow finished up 10, advancers over decliners about 4-1 & NAZ went up 46. The MLP index was fractionally higher to the 226s & the REIT index rose 3+ to the 366s. Junk bond funds had modest gains & Treasuries saw limited selling, increasing yields marginally. Oil slid back to the 71s & gold went up 5 to 1980 (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)
Higher rates & overhangs from this year's banking crisis will drastically slow economic growth for the biggest global economies, the World Bank said. The institution said advanced economies — the US, Japan & euro area countries — are expected to grow by only 0.7% in 2023, down from 2.6% in 2022. The US is projected to grow 1.1%, while the euro area & Japan are projected to see GDP growth of less than 1% in 2023. US GDP growth is expected to decelerate in 2024 to 0.8% amid the higher rates. The bank estimates overall global growth will decelerate to 2.1% in 2023, down from 3.1% last year. Emerging & developing economies are forecast to see a slight uptick in GDP to 4%, up 0.6% from the bank's projections made in Jan. However, World Bank chief economist Indermit Gill said excluding China, growth in developing economies would be less than 3%. This marks “one of the weakest growth rates in the last five decades,” Gill said. The reduced forecasts for growth reflect broad-based downgrades stemming several overlapping shocks, most recent of which include spillover effects from the recent banking crisis seen in the US & advanced economies. Increasingly restrictive credit conditions resulting from the banking turmoil have effectively shut out emerging and developing economies from global bond markets, putting them “in dangerous waters,” said the bank. Fiscal weakness has dealt a further blow to low-income countries, 14 out of 28 of which are now in debt distress or at high risk of debt distress. 1/3 of these countries are expected to see per capita incomes in 2024 remain at 2019 levels. Nonetheless, central bank s around the world continue raising rates to fight off persistent inflation.
World Bank sees major economies growing at much slower pace thanks to higher rates, banking stress
Boeing (BA), a Dow stick, warned about a new defect on its 787 Dreamliner planes & that it
will delay deliveries of the wide-body aircraft, the manufacturer's
latest production issue. “We are inspecting 787s in our inventory
for a nonconforming condition related to a fitting on the horizontal
stabilizer,” BA said. “Airplanes found to have a
nonconforming condition will be reworked prior to ticket and delivery.” The issue isn't related to flight safety & that planes in service can continue operating. The
problem is the latest in a spate of manufacturing issues on BA
planes that have slowed if not paused deliveries of certain aircraft
outright, just as airlines are clamoring for new planes to capitalize on
the travel boom. BA had paused deliveries of the planes for several weeks
earlier this year because of a separate problem on a fuselage component
on certain 787s. The latest issue currently doesn’t affect its
full-year outlook for Dreamliner deliveries, the company said. BA
has estimated that it would deliver 70-80 of the planes this
year. The stock fell 1.47.
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
Boeing warns new defect on 787 Dreamliners will slow deliveries
Genesis' best-selling model is on the move. Hyundai's luxury brand will start building the GV70 compact SUV at its Montgomery, Alabama, factory in 2024. The facility currently produces the fully electric GV70 Electrified, while the gas-powered GV70 models are imported from South Korea. Genesis sold 9761 GV70s in the US thru May out of 25K total vehicles. "We are pleased to bring further assembly of Genesis vehicles to the United States, bolstering availability of our products and investing in our communities," said Claudia Marquez, COO of Genesis Motor North America. Prices for the GV70 start at $44,275 with a 300 hp turbocharged 4-cylinder engine & $56,375 with a 375 hp V6, while the GV70 Electrified lists for $67,550. Building the GV70 Electrified in the US puts it in position to qualify for the $7500 federal tax credit for electric vehicle purchases, but it currently uses imported batteries that make it ineligible. Hyundai is building a battery plant in Georgia, however, that could start supplying compliant packs by 2025 & the tax credit can be applied to leases today.
Automaker shifting production of best-selling luxury SUV to US
Gold futures finished higher for a 2nd straight session as investors assessed the outlook for interest rates ahead of next week's meeting of Federal Reserve policy makers. Gold for Aug rose $7 (0.4%) to settle at $1981 an ounce, after trading at a low of $1970 & high of $1982. Investors are waiting to see what will happen with the recent stock market rally & if the disinflation process will allow the Fed to skip a rate hike next week. Demand for safe-havens have somewhat eased up & traders are waiting to see if the next market risk triggers a de-risking moment
Gold Prices Score Back-to-Back Gains
Oil futures finished lower, with US benchmark prices giving back what they gained a day earlier after Saudi Arabia on Sun said it would take on an additional output cut of 1M barrels a day in Jul. The market needs some assurance that the other OPEC+ members won't be taking advantage of Saudi Arabia & will be complying fully with previously agreed production cuts. Russia could be the main culprit, as it needs to sell as much oil as it can to finance its ongoing war in Ukraine. Jul West Texas Intermediate crude fell 41¢ (0.6%) to settle at $71.74 a barrel.
U.S. Oil Futures Settle Lower a Day After Rising in The Wake of Saudi Arabia’s Plan to Cut Output
Dow slid lower during the trading session. However buying in the last 2 hours brought it back to around even. The World Bank report above was not encouraging. WTI is still in the red YTD as short term global demand is uncertain.
Dow Jones Industrials
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