Markets ease lower while gold reaches new record highs

Dow was in the red just about all day & finished down 61, decliners over advancers 2-1 & NAZ was off 59.  The MLP index pulled back 4 to 281 & the REIT index was even in the 413s.  Junk bond funds crawled higher & Treasuries continued in demand bringing lower yields.  Oil slid to the high 73s & gold rose 10 to 2551 for another record (more on both below).

Dow Jones Industrials 

General Motors (GM) premium GMC brand wants to become the leader in all-electric truck sales for US consumers as it launches its new electric Sierra pickup.  The Sierra EV joins electric versions of the Hummer, including an SUV and pickup, in GMC's electric “truck” lineup.  The automaker is expecting the Sierra will become GMC's top seller for its EV lineup as lower-priced variants become available next year.  A roughly $100K “Edition 1″ of the vehicle recently started reaching customers.  “We believe this is a totally different proposition than anything that’s been launched by anybody else before. So, we’re confident about the demand,” Duncan Aldred, global VP of GMC said.  GMC did not disclose a timeline for when the brand expects to lead retail electric truck sales.  But to do so, it will have to outsell its sibling Chevrolet Silverado EV as well as competitors led such sales with its Cybertruck in the 2nd qtr.  Aldred said he believes there will be cross-shopping between the Sierra & Cybertruck, but he doesn't necessarily believe they are primary competitors, despite the vehicles being similarly priced.  He said many Cybertruck buyers already own Teslas (TSLA), while roughly 80% of GMC's reservation holders for the Sierra previously had non-GMC vehicles.  Automakers such as GM rushed to release all-electric pickup trucks, in part because TSLA planned to build such a vehicle.  That led to fears that the US.  EV leader would dominate the truck market, which is crucial to the Detroit automakers, like it did for electric cars.  But EV adoption has been slower than many expected & the electric truck market remains in its infancy.  The all-electric pickup truck market was roughly 38K vehicles during the first ½ of the year, including retail & fleet sales, according to Motor Intelligence.  That compares with the more than 1M traditional or hybrid full-size pickup trucks sold this year thru  Jun.  GM stock was up 21¢.

GMC expects to outsell its electric truck competitors as it launches new Sierra pickup

Eli Lilly's (LLY) highly popular weight loss drug reduced the risk of developing Type 2 diabetes by 94% in obese or overweight adults with prediabetes compared with a placebo, according to initial results from a long-term study.  The late-stage trial on tirzepatide, the active ingredient in the company's weight loss injection Zepbound & diabetes drug Mounjaro, also found that patients experienced sustained weight loss over the roughly 3-year treatment period.  Adults on the highest weekly dose of the drug saw a 22.9% decrease in body weight on average after 176 weeks, compared with 2.1% for those who received a placebo.  The results suggest that treatment could meaningfully delay a potential diagnosis for people with prediabetes, or those with blood sugar levels that are higher than normal but not high enough to be classified as Type 2 diabetes.  More than 1 in 3 Americans have prediabetes, according to the latest gov data, which health experts say can be reversed with lifestyle changes such as diet and exercise.  People who are overweight or have obesity are at a higher risk for prediabetes.  The new data also shows the potential long-term health benefits of taking a buzzy class of obesity & diabetes medications called GLP-1s, which mimic hormones produced in the gut to tamp down appetite and regulate blood sugar.  As LLY's Zepbound & Mounjaro have skyrocketed in popularity over the last 2 years, the companies have raced to study other clinical uses for their drugs.  The results are “another reminder of the huge investment which Lilly has made to prove not only do you lose weight but when you do on this medicine, it converts to health benefits. This is our fourth study this year that does such a thing,”  CEO David Ricks said, adding that tirzepatide has shown promise as a treatment for heart failure, sleep apnea & fatty liver disease in 3 other clinical trials.  LLY tested tirzepatide in more than 1000 adults over 176 weeks in the phase 3 trial, followed by a 17-week period where patients stopped treatment.  It is the longest completed study on the drug to date.  The stock jumped 28 (3%).

Eli Lilly’s weight loss drug slashes the risk of developing diabetes in long-term trial

Boeing (BA), a Dow stock, said that it has paused flight tests of its 777X after it found damage in a structure of 1 of the wide-body aircraft.  The company discovered the damage to the custom part, which it said is between the engine & the airplane structure, during scheduled maintenance.  It has since grounded the 3 other 777-9 airplanes in its test fleet.  No other flight testing was scheduled for the other aircraft.  “Our team is replacing the part and capturing any learnings from the component and will resume flight testing when ready,” BA said.  It has informed the Federal Aviation Administration & its customers, which have ordered 481 of the 777X.  It wasn't immediately clear whether the grounding & issue would impact certification & delivery of the new wide-body jetliners, which are slated for 2025, about 5 years behind schedule.  BA began flight tests of the aircraft with the FAA in Jul, a major milestone.  The stock dropped 7.55 (4%).

Boeing pauses tests of 777X aircraft after finding damage to one of the jets' structures

Gold prices extended their record run, holding firm above the key $2500 level, driven by a weaker $ & growing investor confidence that the Federal Reserve will likely cut interest rates in Sep.  Spot gold rose 0.3% to $2510 per ounce, after hitting an all-time high of $2531 earlier in the session & US gold futures settled 0.4% higher at $2550.  The $ index sank to a 7-month low, making gold more attractive for other currency holders, while benchmark US 10-bond yields slipped.

Gold Extends Record Rally On Dollar Weakness, Rate-Cut Bets

Crude futures fall for a 3rd straight session with demand concerns & easing geopolitical risk premium keeping sellers at the forefront.  The oil market's recent poor form is continuing this week as a ceasefire in Gaza grows more likely & China demand weakness shows little sign of recovery.  If the market fundamentals don't break this bearish trend soon, OPEC+ may be hesitant to unwind their voluntary cuts anytime soon.  Sep WTI goes off the board at $74.04 a barrel, down 0.4%, while the most active Oct contract falls 0.7% to $73.17 & Brent settles down 0.6% at $77.20 a barrel.

Oil Futures Extend Losses on Demand Concerns

The stock market had a quiet day as some traders are away in this semi-holiday period prior to Labor Day.  While stocks roar ahead with the popular averages at or near records, gold continues in demand by investors who have negative outlooks for stocks.  It's amazing, but this relationships has lasted for months.