Dow gained 115, advancers over decliners better than 3-2 & NAZ was off 3. The MLP index added 2+ to the 241s & the REIT index stayed in the 366s. Junk bond funds continued mixed & Treasuries had more selling, driving yields higher. Oil jumped 2+ to the 85s, its high in 2023,& gold inched up 1 to 1967 (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)
The average rate for a 30-year fixed-rate mortgage was 7.18% for last week, down from last the prior week's average of 7.23%, according to the latest data by Freddie Mac. At the same time, the average rate for a 15-year fixed-rate mortgage averaged 6.55%, unchanged from last week. While mortgage rates declined this week, they remain elevated amid a rising interest rate environment. "Despite continued high rates, low inventory is keeping house prices steady," Freddie Mac Chief Economist Sam Khater, said. "Recent volatility makes it difficult to forecast where rates will go next, but we should have a better gauge in September as the Federal Reserve determines their next steps regarding interest rate hikes." Since 2022, the Federal Reserve has raised interest rates 11 times to bring inflation down to its target range of 2%. But inflation climbed to 3.2% in Jul, according to the latest consumer price index (CPI) data released by the Bureau of Labor Statistics (BLS). Still, inflation has cooled from its Jun 2022 peak of 9.1%. Additionally, job growth declinedin Jul. Nonetheless, these readings may not be enough to convince the Fed to change its course. "Job growth is weakening, and wage growth is holding steady, but both are still above the pace that would be consistent with the Federal Reserve's inflation target," Joel Kan, the Mortgage Bankers Association's (MBA) VP & deputy chief economist, said. "The incoming economic data continue to convey conflicting signals about the strength of the economy," Kan continued. "Indicators of manufacturing and service sector health remain lackluster, measures of inflation have moved lower, while GDP growth in the second quarter was stronger than expected and consumer spending remains resilient." Fed Chair Jerome Powell has maintained the central bank won't ease up its monetary policy until it's convinced it’s within reach of meeting its goals. "We’ve covered a lot of ground, and the full effects of our tightening have yet to be felt," Powell said. "Looking ahead, we will continue to take a data-dependent approach in determining the extent of additional policy firming that may be appropriate. "Inflation has moderated somewhat since the middle of last year," Powell continued. "Nonetheless, the process of getting inflation back down to 2% has a long way to go."
Mortgage rates take a dip ahead of Labor Day weekend: Freddie Mac
Shares of Dell (DELL) skyrocketed after the company said it was lifting its full year forecast for revenue & profit amid an AI boom & steady demand for computer hardware & server products. The results could signal a return to spending for the tech industry after major networking equipment provider Cisco (CSCO), a Dow stock, also beat quarterly revenue estimates. "AI
is already showing it's a long-term tailwind, with continued demand
growth across our portfolio," COO Jeff Clarke said. The company forecasted 3rd-qtr revenue of $22.5-23.5B, beating estimates of $21.7B. DELL expects EPS of $1.45, plus or minus 10¢, compared with estimates of $1.38. For
the full year, DELL expects revenue of $89.5-91.5B & EPS of $6.30, plus or minus 20¢. The company reported 2nd qtr revenue & EPS above estimates. Driven by higher demand for AI-optimized servers, Dell said servers & networking revenue reached $4.27B over the 2nd qtr, up
11% from the first qtr. Meanwhile, revenue at the its client solutions group jumped 8% from the first qtr to $12.94B. The stock rose 11.90 (21%).
If you would like to learn more about DELL, click on this link:
club.ino.com/trend/analysis/stock/DELL_aid=CD3289&a_bid=6aeoso5b6f7
Dell raises forecast fueled by AI, hardware sales
Russian Pres Vladimir Putin said that he will soon meet with Chinese Pres Xi Jinping as the Kremlin's war in Ukraine drags on. “Soon enough we will have some events and there will be a meeting with the Chinese President [Xi Jinping],” Putin said. “He [Xi] calls me his friend, and I am happy to call him my friend, because this is a man who personally does a lot for the development of Russian-Chinese relations and cooperation in different areas,” Putin added. Since Russia's invasion of its ex-Soviet neighbor, the US & its allies have imposed rounds of coordinated sanctions vaulting Russia past Iran & North Korea as the world's most-sanctioned country. White House officials have previously expressed deep concerns about China's alignment with Russia & the possibility that the world's 2nd-largest economy may aid Moscow as the Kremlin's war heads into its 600th day. The last time the 2 leaders met was in Mar at the Kremlin. A month later, Xi spoke on the phone for the first time since Russia's full-scale invasion with Ukrainian Pres Volodymyr Zelenskyy. Putin & Xi's upcoming meeting also comes amid steady gains by Ukrainian forces on the battlefield. The White House said Ukrainian forces have made “notable progress” in southern Zaporizhzhia in the last 72 hours.
Putin says he will soon meet with China President Xi as war in Ukraine drags on
Gold futures posted a modest gain, with prices for the front-month contract up 1.4% for the week. When there is a cooling in jobs data, combined with the expectation that the Federal Reserve will reconsider another rate hike this month, gold prices are expected to rise. However, this same fundamental data is causing a pullback in bonds & a spike in Treasury yields, which is creating a tug-of-war between gold & the ancillary players that affect prices. Dec gold edged up by $1 to settle at $1967 an ounce after trading as highs as $1980.
Gold futures inch higher for the session, gain more than 1% for the week
Oil futures marked their highest settlement of the year, with front-month US benchmark prices up 7.2% for the week. With Saudi Arabia cutting exports by 1M barrels a day in Aug & likely to extend cuts into Q4, the market is rightly pricing in an outlook of tighter inventories as 2024 approaches. Oct West Texas Intermediate crude climbed $1.92 (2.3%) to settle at $85.55 a barrel. Prices based on front-month contract ended at their highest since Nov 2022.
Oil futures log highest settlement year to date
In a relatively quiet week of trading, Dow was up about 500. Next week, traders will be in full force with serious trading.Dow Jones Industrials
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