Markets pause while gold sets a new record

Dow finished up 134 (barely above 40K), advancers modestly ahead of decliners & NAZ was off 12.  The MLP index gained 2+ to 281 & the REIT index was just below yesterday's level of 379.  Junk bond funds fluctuated & Treasuries continued to see selling which brought higher yields.  Oil slid back almost 1 to 80 & gold roared ahead 36 to 2422 for a new record (more on both below).

AMJ (Alerian MLP Index tracking fund)

The Food & Drug Administration approved Amgen (AMGN)’s therapy for patients with the most deadly form of lung cancer.  The agency cleared the drug, which will be marketed under the name Imdelltra, as a 2nd or later line of treatment for people with advanced small-cell lung cancer.  That means patients can take the drug if their cancer progresses while on or after trying one other form of treatment, which is typically a type of chemotherapy.  This drug is also known by its generic name tarlatamab.  In clinical trials, AMGN's drug has been shown to reduce tumor growth & help people with small-cell lung cancer live significantly longer.  Of the more than 2.2M patients who are diagnosed with lung cancer worldwide each year, small-cell lung cancer comprises 15%, or 330K, of those cases.  Around 80-85% of people with small-cell lung cancer are diagnosed with an advanced stage of the disease, according to a study published in the Journal of Cancer.  There are around 35K patients with small-cell lung cancer in the US, Dr Jay Bradner, AMGN's chief scientific officer said.  The stock fell 2.25.

FDA approves Amgen’s treatment for most deadly form of lung cancer 

The number of Americans filing new claims for jobless benefits fell last week, unwinding nearly ½ of the jump at the start of the month, indicating that labor market conditions remain fairly tight even as job growth is cooling.  There are signs the economy slowed further early in the 2nd qtr as the delayed effects of the Federal Reserve's hefty interest rate hikes start to have a bigger impact.  Single-family homebuilding dropped again in Apr & permits for future construction hit an 8-month low.  Output at factories unexpectedly fell, other reports showed.  Apr's economic data, including nonfarm payrolls & retail sales, have so far come in below expectations.  Initial claims for state unemployment benefits dropped 10K to a seasonally adjusted 222K for last week, the Labor Dept said.  The forecast called for 220K claims.  Claims raced to an 8 month high in the prior week.  Unadjusted claims decreased 13K to 197K.  Claims in New York tumbled 9K, almost reversing a prior surge which the state attributed to layoffs in transportation & warehousing, accommodation & food services as well as educational services industries.  There were significant drops in filings in Illinois & Indiana, more than offseting a notable rise in Florida.  The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 13K to a seasonally adjusted 1.8M during the latest week.  Continuing claims remain low by historical standards.

US labor market fairly tight, broader economy losing steam

Americans are racking up more credit card debt as they continue to battle high inflation & interest rates.  New data published by TransUnion shows the average debt per borrower hit $6218 at the end of the first qtr, an 8.5% increase from 1 year ago.  Consumers owe a collective $1.02T in credit card debt.  "As consumers manage expenses amidst stubbornly high inflation, demand for credit continues to be strong despite the currently relatively high interest rates," said Paul Siegfried, senior VP & credit card business leader at TransUnion.  Most households have seen their monthly expenses rise as the result of the ongoing inflation crisis.  Although the consumer price index has fallen from a peak of 9.1%, it remains notably higher than pre-pandemic levels.  When compared with Jan 2021, before prices began to spike, inflation is up more than 18%.  The findings come shortly after the New York Federal Reserve released new data revealing that a growing number of Americans are falling behind on their monthly credit card payments.  The flow of credit card debt moving into delinquency hit 8.9% in the first qtr at an annualized rate, above pre-pandemic levels.  In fact, the percentage of credit card balances in serious delinquency, in which payments are at least 90 days late, climbed to its highest level since 2012.

Americans grappling with high inflation are racking up credit card debt

Gold gold pushed back above the $2400 level for the first time in a month, rising to a record as the $ surrendered early gains.  Gold for Jun was last seen trading up $32 to $2417 per ounce, topping the prior record close of $2413 set on Apr 19.  Still-healthy labor & growth as well as lingering inflationary trends underpin the ongoing urge for caution, citing vulnerability for gold at record levels.  If price pressures become entrenched & labor markets remain strong, the Fed rate cut narrative that has set the backdrop for gold's gains becomes less clear.  The ICE dollar index was unchanged at 104.46, after earlier touching 104.8 & Treasury yields moved higher.  The 2 year note was last seen paying 4.831%, up 2.5 basis points, while the yield on the 10-year note was up 4.5 basis points to 4.426%.

Gold Trading at a Record High as the Dollar Moves Lower

West Texas Intermediate (WTI) crude oil rose back above $80 for the first time this month ahead of the Jun 1 OPEC+ meeting that will decide on whether the group will extend 2.2M barrels per day of voluntary cuts into the 3rd qtr.  WTI crude oil for Jun was last seen up 85¢ to $80.08 per barrel, while Jul Brent crude, the global benchmark, was up 67¢ to $83.94.  WTI prices have last breached $80 on Apr 30, with supply & demand remaining mostly balanced as the market awaits the potential stimulus of interest rate cuts, the demand hike that comes with the start of the US summer driving season on the Memorial Day long weekend, & a decision from OPEC+ on whether to continue production cuts slated to end on Jun 30.  OPEC+ is debating whether to hold its Jun 1 ministerial meeting in person or virtually, with a decision not to meet at OPEC's Vienna headquarters likely to be seen as an indication the cartel & its allies will extend production cuts past their scheduled expiry to support prices.

WTI Crude Oil Rises Back Above US$80.00 as an OPEC+ Decision on Production Cuts Looms

The bulls had a mini rally in the last hour to take the Dow just over 40K.  At the same time, nervous investors keep buying gold, taking it to new heights.  Dow was up 492 this week & extended its advance in May to 2200.

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