Markets mixed and gold has more selling

Dow sank 307, decliners over advancers 3-1 but NAZ went up 116.  The MLP index was steady in the 277s & the REIT index slid back 3+ to 370 on higher interest rates.  Junk bond funds traded lower & Treasuries had more selling which raised yields (more below).  Oil was a little lower in the 77s after early buying & gold tumbled another 48 to 2344.

Dow Jones Industrials 

JPMorgan's (JPM), a Dow stock, CEO Jamie Dimon says a “hard landing” for the US cannot be ruled out.  When asked about the prospect of a hard landing, Dimon replied: “Could we actually see one? Of course, how could anyone who reads history say there’s no chance?”  The CEO was speaking at the JPMorgan Global China Summit in Shanghai.  Dimon said the worst outcome for the US economy will be a “stagflation” scenario, where inflation continues to rise, but growth slows amid high unemployment.  “I look at the range of outcomes and again, the worst outcome for all of us is what you call stagflation, higher rates, recession. That means corporate profits will go down and we’ll get through all of that. I mean, the world has survived that but I just think the odds have been higher than other people think.”  However, he added that “the consumer is still in good shape” — even if the economy slips into recession.  He pointed to the unemployment rate, which has been below 4% for about 2 years, adding that wages, home prices & stock prices have been going up.  That said, Dimon pointed out that consumer confidence levels are low.  “It seems to be mostly because of inflation ...The extra money from Covid has been coming down.  It’s still there, you know, at the bottom 50% it’s kind of gone. So it’s I’m gonna call it normal, not bad.”  Dimon said interest rates could still go up “a little bit.”  “I think inflation is stickier than people think. I think the odds are higher than other people think, mostly because the huge amount of fiscal monetary stimulus is still in the system, and still maybe driving some of this liquidity.”  Is the world prepared for higher inflation? “Not really,” he warned.

JPMorgan’s Jamie Dimon says can’t rule out ‘hard landing’ for the U.S., stagflation will be ‘worst outcome’

Treasury yields rose following better-than-expected economic data.  The 10-year Treasury yield was higher by 6 basis points at 4.494%, while the 2-year Treasury yield increased by more than 7 basis points at 4.952%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Services & manufacturing gauges for May both were higher-than-expected & showed expansion in both sectors, according to purchase manager surveys from S&P Global.  The services activity index posted a 54.8 reading on the month, while manufacturing was at 50.9.  Both rose on a monthly basis & topped respective estimates for 51.5 & 50.  The 2 indices also showed that input prices “continued to rise sharply,” S&P said.  Weekly jobless claims numbers fell more than expected, signaling that any weakening in labor market demand may have stalled.  Claims for jobless benefits totaled 215K for last, down 8K from the previous period's upwardly revised level, according to the Labor Dept.  The forecast had been looking for 220K.  Minutes from the Apr 30-May 1 policy meeting of the Federal Open Market Committee pointed to uncertainty from policymakers about when it would be time to ease.

Treasury yields climb on positive economy and labor data

Crude oil futures bounced back today after a 3-day decline but are still on pace for a weekly loss.  US crude oil is down 2.4% for the week while Brent, the global benchmark, has fallen 1.8%.  West Texas Intermediate  The Jul contract at $78.04 a barrel is up 47¢ (0.6%) & YTD US crude oil is up 8.9%.  Brent  Jul contract is $82.40 a barrel, up 50¢ (0.6%) & YTD the global benchmark is up about 7%.  Oil prices have been stuck in a $3 range since their Apr highs as fears of a wider war in the Middle East ease & traders shift their focus back to basic supply & demand.  Prices have struggled to break out this month with investors remaining cautious that higher-for-longer interest rates could slow the US economy & weigh on oil demand.  Traders are also worried about a buildup in global oil inventories after a mild winter in parts of the Northern Hemisphere

Oil prices bounce back after three-day decline but still on pace for weekly loss

Investing in AI is very hot these days, driving NAZ tech stocks higher.  However the rest of the stock  market, which comprises most stocks, is stumbling, trying to gain upward momentum.  Jamie Dimon's thoughts (above) are getting a lot of attention.  Gold, after reaching new heights, is down about 80 this week.