VerySmartInvesting: Markets edge higher as Dow records its 6th straight daily gain

Dow went up 172, but decliners over advancers 5-4 & NAZ retreated 29. The MLP index fluctuated in the 283s & the REIT index was off 3 to the 363s. Junk bond funds continued to be weak & Treasuries had selling which lifted yields. Oil was fractionally higher to the 79s & gold lost 3 to 2303 (more on both below).

AMJ (Alerian MLP Index tracking fund)

The pharmaceutical giant AstraZeneca (AZN) said it is withdrawing its COVID-19 vaccine worldwide citing low demand & a "surplus of available updated vaccines" since the pandemic. The vaccine, Vaxzevria, was one of a number of shots released onto catching COVID-19. The company said it would proceed to withdraw Vaxzevria's marketing authorizations within Europe. The vaccine was never approved in the US by the FDA. "As multiple, variant COVID-19 vaccines have since been developed there is a surplus of available updated vaccines," the company said, adding that this had led to a decline in demand for Vaxzevria, which is no longer being manufactured or supplied. AZN said that more than 3B doses were supplied globally & that "over 6.5 million lives were saved in the first year of use alone." "Our efforts have been recognized by governments around the world and are widely regarded as being a critical component of ending the global pandemic," the statement said. "We will now work with regulators and our partners to align on a clear path forward to conclude this chapter and significant contribution to the COVID-19 pandemic." AZN admitted for the first time in court documents that its COVID-19 vaccine can cause rare side effects such as blood clots & low blood platelet counts. The admission came via a UK class action lawsuit that sought $125M for almost 50 victims of AZN vaccine side effects. The European Medicines Agency listed Guillain-Barré syndrome as a very rare side effect of Vaxzevria in 2021 & added a warning in the product information. The firm's application to withdraw the vaccine was made on Mar 5 & came into effect yesterday. Many countries had already stopped supplying the vaccine before the announcement. The stock went up 65¢.

AstraZeneca to withdraw its COVID-19 vaccine globally as demand dips, rare side effects revealed

Google’s (GOOG) business is growing at its fastest rate in 2 years, & a blowout earnings report in Apr sparked the biggest rally in its shares since 2015, pushing the company's market cap past $2T. But at an all-hands meeting last week with CEO Sundar Pichai& CFO Ruth Porat, employees were more focused on why that performance isn't translating into higher pay, & how long the company's cost-cutting measures are going to be in place. “We’ve noticed a significant decline in morale, increased distrust and a disconnect between leadership and the workforce,” a comment posted on an internal forum read. “How does leadership plan to address these concerns and regain the trust, morale and cohesion that have been foundational to our company’s success?” GOOG is using artificial intelligence to summarize employee comments & questions for the forum. The top leadership have been on the defensive for the past few years, as vocal staffers have railed about post-pandemic return-to-office mandates, the company's cloud contracts with the military & an extended stretch of layoffs, totaling more than 12K last year, along with other cost cuts that began when the economy turned in 2022. The internal strife continues despite GOOG's better-than-expected first-qtr earnings report, in which the company also announced its first div as well as a $70B buyback billion. “Despite the company’s stellar performance and record earnings, many Googlers have not received meaningful compensation increases” a top-rated employee question read. “When will employee compensation fairly reflect the company’s success and is there a conscious decision to keep wages lower due to a cooling employment market?” Another highly-rated comment centered around the company’s priorities, including its hefty investments in artificial intelligence. “To many people, there’s a clear disconnect between spending billions on stock buybacks and dividends and re-investing in AI and retraining critical Googlers,” the post said. “Our priority is to invest in growth,” Porat said. “Revenue should be growing faster than expenses.” She also took the rare step of admitting to leadership's mistakes in its prior handling of investments. “The problem is a couple of years ago — two years ago, to be precise — we actually got that upside down and expenses started growing faster than revenues,” said Porat, who announced nearly a year ago that she would be stepping down from the CFO position but hasn't yet vacated the office. “The problem with that is it’s not sustainable.” GOOG execs have been hammering this theme of late. GOOG stock fell 1.82.

Google employees question execs over ‘decline in morale’ after blowout earnings

Aside from ramen & sausages, South Korea's convenience stores have a new popular item on the menu, gold bars. The country's largest convenience store chain, CU, has been collaborating with the Korea Minting & Security Printing Corporation (KOMSCO) to offer customers mini gold bars, & they're selling like hot cakes. A variety of finger-nail sized gold bars weighing between 0.1 gram & 1.87 gram have been up for sale at CU outlets since April. A 1.87 gram bar sells for 225K won ($166) & a 0.5 gram bar sells for 77K won. Priced at 113K won each, 1 gram bars were sold out within 2 days. The bars come with congratulatory messages, birthday wishes & even designs for personality types. People in their 30s were most active in purchasing these gold bars, accounting for over 41% of the total sales since their launch, according to CU’s commerce phone app Pocket CU. Those in their 40s make up 35% of the sales, followed by people in their 50s at 16%. People in their 20s accounted for 6.8% of all sales. Demand for bars & coins in South Korea rose 27% year on year to 5 tons in the first qtr of this year amid rising prices of the yellow metal, the World Gold Council (WGC) said. This was the sharpest quarterly increase in gold purchases in South Korea in more than 2 years, WGC noted. Other convenience stores are also riding the bullion wave. In South Korea’s GS25 convenience store chain, customers can buy small gold wafers from vending machines. According to the Korea Gold Exchange, prices of gold have surged to a record 456K won ($335) per 3.75 grams, or 0.13 an ounce. Conversely, the Korean won has weakened over 5% against the greenback so far this year, currently trading at 1358 against the $.

Gold bars are selling like hot cakes in Korea’s convenience stores and vending machines

Gold steadied while investors awaited US data for clues on potential interest rate cuts by the Federal Reserve, though a slight uptick in the $ limited any upside. Spot gold was mostly flat at $2312 per ounce. US gold futures for Jun settled $2 lower at $2322 per ounce. The $ edged up 0.1% on renewed bets of rate cuts this year. A stronger $ makes gold less attractive for foreign currency holders. Federal Reserve Bank of Boston Pres Susan Collins expressed confidence that the current setting of monetary policy will slow the economy in the way she believes will be necessary to get inflation back to the Fed's 2% target. Meanwhile, the European Central Bank has all but promised a rate cut on Jun 6 & worries that a delay in monetary policy easing by the Fed could also force it to take its time.

Gold holds ground as investors await US data for rate cut clues

West Texas Intermediate (WTI) crude oil closed higher, rising off early losses after the Energy Information Administration reported US oil inventories fell last week. WTI crude oil for Jun closed up 61¢ to settle at $78.99 per barrel, after earlier touching $76.89, while Jul Brent crude, the global benchmark, was last seen up 45¢ to $83.61. The rise came after the EIA's weekly survey showed US oil inventories fell by 1.4M barrels last week, near expectations, while gasoline & distillate inventories rose. The survey contradicted the weekly report from the American Petroleum Institute released Tues that showed a rise in oil inventories of 0.5M barrels last week. Geopolitical worries are continuing to offer support for oil prices, as ceasefire talks between Israel and Hamas continue, though a report said an Israel official saw no signs of a breakthrough in the negotiations.

WTI Crude Oil Closes Higher as the EIA Reported US Inventories Fell Last Week

The stock markets wavered, not knowing where to go next. Rate cuts are the biggest driver for the bulls but the first one is still a few months away. Until then, the economy will probably just limp along.