Dow gained 105 with only minor fluctuations, advancers modestly ahead of decliners & NAZ lost 93. The MLP index edged up 1+ to the 236s & the REIT index was flattish, staying close to 371 all day. Junk bond funds rose in price & Treasuries were sold, raising yields. Oil crawled up to the 83s & gold was off 3 to 1945 (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)
Contract negotiations between the United Auto Workers (UAW) & Detroit's major automakers are heating up as the union continues to double down on its threats to strike against any or all of the 3 with the deadline fast approaching. 'The labor union is seeking a 40% pay raise over the 4-year contract & an array of additional benefits for its 146K workers at Ford (F), General Motors(GM) Dodge parent Stellantis (STLA), whose latest offer the UAW rejected this week. In a Facebook video, UAW Pres Shawn Fain held up a copy of the Stellantis proposal & threw it into the trash, calling it "a slap in the face." He went on to warn automakers that "the clock is ticking" & his members at the Big Three are prepared to walk off the job if a deal is not reached when their contracts expire Sep 14. Leakers said that automakers have estimated that the UAW's contract demands could raise the current mid $60-per-hour labor rate to more than $150 per hour. The union says the Big Three can afford it but 2 of the carmakers have pushed back publicly on the UAW's demands. STLA said last week that it intends to fairly reward employees for their contribution to the company's success but added, "It will be critical to find common ground that doesn’t jeopardize our ability to continue investing in the affordable products, services and technology that our customers want and that would allow us to continue providing good jobs here at home." GM said in its latest statement on the negotiations that "The breadth and scope of the Presidential Demands, at face value, would threaten our ability to do what’s right for the long-term benefit of the team." Ford, which employs more hourly UAW members than any other automaker, said, "We look forward to working with the UAW on creative solutions during this time when our dramatically changing industry needs a skilled and competitive workforce more than ever." Whether a strike occurs or not, auto production could be hurt further if the UAW's scheduling demands are met, according to auto dealer Tom Maoli. "What they're looking for is to cut their work week back to 32 hours," Maoli said. "That's a production issue. And if they cut production any further, this car industry is in trouble because there is no production today – we're still trying to recover from the chip crisis."
UAW's contract fight with automakers heats up as strike threat looms
US moves to de-risk from China with a new investment ban suggest that Western allies may be learning from national security failings in Russia, according to analysts. The White House announced a ban on some US investment in China in sensitive technologies such as computer chips, in the latest ratcheting up of DC's disassociation from Beijing amid perceived national security risks. Analysts said the US was making such moves with an eye on rising tensions over Taiwan, given that the potential fallout from a conflict between China & Taiwan would be “unimaginable.” Pres Biden said the exec order, which will come into effect next year, aims to ensure that China’s military does not benefit from American technology & funding, particularly in sectors that “counter US & allied capabilities.” Such moves have sometimes been referred to as a “decoupling” of the world's 2 largest economies, though the US has preferred the term “de-risking.” Beijing hit back at the announcement, with the Foreign Ministry saying it was “resolutely opposed” to what it dubbed the US' “blatant economic coercion and technological bullying.” China's ambassador to the US has previously warned that Beijing would retaliate against such measures.
With eyes on Taiwan, new China ban shows the U.S. may be learning lessons from mistakes with Russia
At least 55 people are dead after devastating wildfires ripped through Hawaii's 2nd-largest island, Maui, county officials confirmed. The blaze has reduced the historic town of Lahaina to ashes, said Hawaii Sen Brian Schatz, who surveyed the damage. The fire in Lahaina has been 80% contained but remains active, according to an update. The city remains without power. Lahaina was the capital of Hawaii when the islands were an independent kingdom. The city carries deep cultural significance for Hawaiians. King Kamehameha 1 established Lahaina as his royal residence in the early 19th century as he unified the islands into a single state. “It’s absolutely heartbreaking. The recovery process will be long, but we’re committed to these families and communities,” Schatz said. Hawaii Gov Josh Green issued a 4th emergency proclamation since the fires began Tues. The declaration will help with the recovery & rebuilding of West Maui & allow for doctors & nurses from out of state to practice in Hawaii.
Hawaii wildfire death toll rises to 55, historic Lahaina ‘reduced to ashes’
Gold edged lower after the US reported an inflation measure rose last month, pushing up the $ & bond yields higher. Gold for Dec closed down $2 to settle at $1946 per ounce. The Bureau of Labor Statistics said its producer price index rose by 0.3% in Jul from Jun, above expectations for a 0.2% monthly rise. The higher than expected figure could fuel pressure on the Federal Reserve to raise interest rates again by year end to cut inflation, though the consumer price index released yesterday showed prices rose by 0.2% last month from Jun, matching expectations. The PPI report pushed the $ higher, making gold more expensive for intl buyers. The ICE $ index was last seen up 0.38 points to 102.9. Treasury yields were also higher following the report. The yield on the US 2-year note was last seen up 5.9 basis points to 4.897%, while the 10-year note was last seen paying 4.158%, up 4.8 basis points.
Gold Edges Down as the US Producer Price Index Rose More Than expected in July
Oil futures ended higher, booking a 7th straight weekly rise as investors focused on tightening supplies as a result of previously announced cuts by Saudi Arabia and Russia. West Texas Intermediate crude for Sep rose 37¢ (0.5%) to finish at $83.19 a barrel & the US benchmark rose 0.5% for the week. Oct Brent crude, the global benchmark, rose 41¢ (0.5%) to settle at $86.81 a barrel, leaving a 0.7% weekly gain. WTI & Brent each scored a 7th straight weekly gain. In its monthly report, the Intl Energy Agency said crude oil supplies would tighten further into the fall as Saudi Arabia & Russia continue supply cuts. Deepening OPEC+ supply cuts have collided with improved macroeconomic sentiment and all-time high world oil demand. If the bloc's current targets are maintained, oil inventories could draw by 2.2 mb/d (M barrels a day) in Q3-2023 & 1.2 mb/d in Q4, with a risk of driving prices still higher. The IEA said it expects oil supplies to rise by 1.5M barrels a day next year, 300K barrels a day more than it was expecting last month. That's expected to be driven by production increases in the US, Brazil & Guyana.
Oil scores 7th straight weekly rise as traders focus on tight supplies
This was a choppy week for stocks, with Dow up only 66. Fairly good news on the inflation front did not bring out many stock buyers. The stock market is coping with understanding the effects of high interest rates & a potential recession. After 2 strong months for Dow, it has been struggling in Aug.Dow Jones Industrials
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