Markets climb after more encouraging inflation data

Dow was up only 47, advancers over decliners better than 2-1 & NAZ gained 219.  The MLP index was up 2 to the 236s & the REIT index was up 2+ to the 384s.  Junk bond funds were a little higher & Treasuries saw heavy buying again, sharply reducing yields.  Oil was up 1+ to go over 76 & gold added 2 to 1964 (more on both below).

AMJ (Alerian MLP Index tracking fund)

Free Apple Analysis!

Bring Your Portfolio Into The 21st Century

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

The St Louis Federal Reserve announced that Jim Bullard will step down from his post as president, effective Aug 14.  The bank said he's leaving to take the position of dean at Purdue University's Mitchell E Daniels School of Business, effective Aug 15.  It also added that Bullard has “recused himself from his monetary policy role on the Federal Reserve’s Federal Open Market Committee and other related duties and has ceased all public speaking.”  “It has been both a privilege and an honor to be part of the St. Louis Fed for the last 33 years, including serving as its president for the last 15 years,” Bullard said.  “I am also grateful to have worked alongside such dedicated and inspiring colleagues across the Federal Reserve System.”  The St Louis Fed said it will hire a “national executive search firm” to assist in the search for Bullard's replacement.  The announcement comes roughly 2 weeks before the Fed's next policy meeting.  According to the CME Group's FedWatch tool, traders are pricing in a 92.4% chance for a 25 basis-point rate hike.  Back in May, Bullard said rates needed to go up by another ½-point to curb inflation.  Since then, the Fed has raised rates by 25 basis points.  “The risk with inflation is that it does not turn around and go back to a low level,” Bullard said.  “As long as the labor market is so good it is a great time to get this problem behind us and not replay the 1970s.”  To be sure, Bullard is not a voting member on the policymaking committee this year.

St. Louis Fed President Bullard says he’s stepping down in August

New weekly US unemployment claims are down by 12K from the previous week, according to data released by the Dept of Labor.  Seasonally adjusted claims totaled 237K last week, lower than the comparable week a year ago, but continued claims for all unemployment programs were higher.  "The total number of continued weeks claimed for benefits in all programs for the week ending June 24 was 1,764,005, an increase of 64,431 from the previous week. There were 1,397,976 weekly claims filed for benefits in all programs in the comparable week in 2022," the Labor Dept said.  Even as hiring remains strong, inflation cooled dramatically in Jun, dropping to 3%.  But wage growth is still strong, too, so there could still be another interest rate hike by the Fed to cool the economy because its inflation target is 2%.  "The count of U.S. initial claims for unemployment insurance is a leading economic indicator because it is an indication of emerging labor market conditions in the country. However, these are weekly administrative data which are difficult to seasonally adjust, making the series subject to some volatility," the Labor Dept added.  While continued claims are not a leading economic indicator, they are a good indicator of labor market conditions, providing "confirming evidence of the direction of the U.S. economy" according to the Dept of Labor.

U.S. new weekly jobless claims down by 12,000

Online spending in the US climbed 6.1% to $12.7B during Amazon's (AMZN) Prime Day promotion, according to Adobe Analytics, as deal-hungry consumers snapped up home goods & household essentials.  AMZN called the event its “biggest ever” Prime Day, with shoppers buying more than 375M items worldwide over 2 days, up from 300M items sold last year, the company said.  The 48-hour sales event kicked off Tues & ran thru yesterday.  Amazon, which didn't disclose total sales from the event, said the first 24 hours of Prime Day marked the “single largest sales day in company history.”  Home goods, fashion & beauty were among the top categories during the discount bonanza, while shoppers scooped up Fire TV sticks, Apple AirPods, & Laneige lip balm, the company said.  Adobe also highlighted appliances, housekeeping products & office supplies as popular categories, while some of the deepest discounts were on electronics, apparel & toys.  Despite the strong showing, which Adobe said set “a new record for Prime Day,” the results still fell short of expectations.  Adobe had forecast total US online sales to grow 9.5% year over year to $13.1B during the 2-day event.  Last year, US consumers spent more than $11.9B.  AMZN stock rose 3.65.
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 touts ‘biggest ever’ Prime Day as U.S. online sales hit $12.7 billion

Gold futures rose for a 3rd straight session, with prices posting another finish at their highest since mid-Jun.  Prices for the precious metal have risen sharply after the Jun readings in the US consumer price yesterday & producer price index today revealed a slowdown in inflation.  Traders are expecting an end to interest-rate hikes & the US $ index has crashed.  Gold for Aug rose $2 to settle at $1963 an ounce.  That was the highest most-active contract finish since Jun 16.

Gold Futures Mark Another Finish At The Highest Since Mid-June

Global benchmark Brent settled at an 11-week high as supply outages tightened the physical market.  Libya’s 2nd-biggest oil field is in the process of shutting amid protests there. The outage of the roughly 250K barrel-a-day Sharara field follows disruptions at the country's El Feel area & Nigeria's Forcados oil terminal.  Traders are keeping a close watch on whether futures will cross above their 200-day moving averages around $82.50 for Brent & $77.30 for WTI which could trigger more buying.  Softening US inflation, which has prompted some optimism that the Federal Reserve's rate-hiking cycle may be nearing an end, is also supporting the commodity.  While the Intl Energy Agency said global oil demand won't grow as fast as previously expected this year due to the faltering economies of developed nations, the agency still sees record demand this year. In a separate report, the Organization of Petroleum Exporting Countries predicted an even tighter global oil market next year, as the group anticipates a much bigger demand increase than other major forecasters.  Crude is nevertheless down this year as traders continue to watch for signs of recession in the west even amid the improving US outlook while waiting for China's recovery to pick up.  OPEC+ heavyweights Saudi Arabia & Russia are removing barrels to prop up the market.  WTI for Aug settled $1.14 higher to $76.89 a barrel & Brent for Sep rose $1.25 to close at $81.36 a barrel.

Oil Settles at 11-Week High as Supply Outages Tighten Market

While stocks are rising, Treasuries are in heavy demand which sharply drives down Treasury yields.  Nervous investors are buying Treasuries while popular sentiment is bullish (shown in the chart below).  Currently demand  for Treasuries appears to be stronger than demand for stocks.

Dow Jones Industrials