Dow climbed 179, advancers over decliners 5-4 & NAZ gained 156. The MLP index.slid below 169 & the REIT index fluctuated a little above 480. Junk bond funds hardly moved today & Treasuries were weak, taking the yield on the 10 year Treasury up 2 basis points to 1.58%. Oil pulled back under 81 & gold added 2 to 1866 (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)
Pres Joe Biden will hold a highly anticipated virtual summit with Chinese Pres Xi Jinping Mon evening. Biden & Xi have held 2 phone calls since Biden took office in Jan, the most recently on Sep 9. But Mon's summit will be the first time in Biden's term that they have communicated face-to-face in a formal summit format. Traditionally, world leader to leader summits are carefully choreographed to produce some kind of tangible outcome. But senior White House officials said the Biden-Xi summit will not be like that. “This is not about seeking specific deliverables or outcomes,” said one administration official. “This is about setting the terms of an effective competition where we are in the position to defend our values and interests and those of our allies and partners,” the official added. “We believe when such terms—or guardrails—are established, we can sustain a vigorous competition.” The summit comes as the US & China are at odds on major geopolitical issues like trade, human rights, military buildup, Taiwan & cybersecurity. China has been scaling up military exercises near Taiwan in recent months, a show of force that has not gone unnoticed by the Biden administration. Beijing has also drawn intl condemnation for its campaign to “reeducate” members of its Uyghur Muslim minority ethnic group. This “reeducation” push includes forced labor, the mass incarceration of over a M people in “reeducation” camps & the alleged sterilization of Uyghur women. On trade, Beijing has been pushing the Biden administration to lift Trump-era tariffs on over $350B worth of Chinese goods. But the US has stalled, choosing instead to leave the tariffs in place & try to open a new round of trade talks. Yet despite these deep divisions between the 2 countries, Biden is making it a priority to maintain open lines of communication with Beijing. “Intense competition requires intense diplomacy,” said the White House official. “As President Biden has made clear, he welcomes the stiff competition, but does not want conflict.”
Biden-Xi virtual summit set for Monday evening amid rising China tensions
Used car prices are expected to climb as Americans fall victim to the new car manufacturing shortage, according to the co-CEO of an online used car marketplace. "We’re seeing a continued rise in [used car] prices," Shift co-CEO Toby Russell said. The average price of a used car was $28K in Sep, up nearly $8K since Feb 2020, according to Edmunds. When Russel was asked to give an example of how the average price of a Ford sedan has increased compared to a year ago, he stressed that there has been a "substantial change" in used cars. "Around 30% or more of the car that is sitting in your driveway right now," he said. "It might have been that you had a car that was worth $10,000 back then. It could be up to $13- $14,000 now, even more, potentially depending on the part of the country you’re in." The demand for used cars comes as Americans try to revert back to normalcy following over a year of pandemic-related restrictions, Russell pointed out. Despite the sharp rise in prices, consumers are eager to get their hands on their "new" whip. "What we’re seeing is consumer demand remains. Folks are coming out of COVID, wanting to be out and about, wanting to be able to drive," he explained. The simplicity of the online used car marketplace company has made itself an attractive hot spot for customers eager to get their hands on their "new" whip. "It’s an exchange. We buy from consumers, sell to consumers," Russell said. "Whether we’re delivering it to you anywhere in the country or bring it to your house for a test drive. It goes from your computer, to your home and you can shop online without having to interact with anybody. You can then choose a car and we will sell it to you online and bring it to you," he added.
Used car prices will continue to rise
Health-care conglomerate Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, announced plans to split its consumer products business from its
pharmaceutical 7 medical device operations, creating & publicly
traded companies. The
separation will sheer off its household products unit, maker of
Band-Aid bandages, Aveeno& Neutrogena skin care products, &
Listerine, from its riskier, but faster-growing division that makes &
sells prescription drugs and medical devices, including its Covid-19 vaccine. “Following
a comprehensive review, the board and management team believe that the
planned separation of the consumer health business is the best way to
accelerate our efforts to serve patients, consumers, and healthcare
professionals, create opportunities for our talented global team, drive
profitable growth, and – most importantly – improve healthcare outcomes
for people around the world,” outgoing CEO Alex Gorsky said. The company said it hopes to complete the transaction
in 18-24 months. The pharmaceutical & medical device division,
which includes advanced technologies like robotics & artificial
intelligence, would retain the name Johnson & Johnson & keep its incoming CEO, Joaquin Duato, at its helm. He said the decision to break up the company had been discussed by
its board for “some time” as it would bring “tremendous opportunity” to
stakeholders. “It’s in the best long-term interest of all our stakeholders,” he added.
“Our goal is really to create two global leaders – a pharmaceutical and
medical device business that has great potential today ... and of
course, the consumer business that’s got iconic brands.” The stock went up 1.87.
If you would like to learn more about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
J&J plans to split into two companies, separating consumer products and pharmaceutical businesses
Gold futures finished with a gain, stretching their winning streak into a 7th consecutive session, with prices scoring the biggest weekly percentage gain since May. Gold for Dec rose $4 to settle at $1868 an ounce. That was the highest settlement for a most-active contract since Jun 11 & marked 7 consecutive session gains, the longest such stretch the longest stretch since a 9-day rise ending Jul 29, 2020. Prices for the yellow metal also found support after the Univ of Mich's reading on US consumer sentiment showed a fall to 66.8 this month from 71.7 in Oct, while expectations for 1-year inflation rose to 4.9%. It's highest level since 2008, from 4.8% in Oct. Futures for the yellow metal notched a weekly gain of nearly 2.9%, for the best weekly gain since the period ended May 7.
Gold stretches winning streak to a 7th session, posts best weekly rise since May
Oil futures fell, with strength in the $ & the
threat of a possible release of crude from the Strategic Petroleum
Reserve (SPR) contributing to a decline in prices for the week. During
a White House press conference, Press Secretary Jen Psaki
said the US continues to look at “every tool in our arsenal” to lower
gasoline prices, and has taken a range of actions, including engaging
with entities abroad such as the Organization of the Petroleum Exporting
Countries. This tells us is that
behind the scenes, they're not quite sure what to
do. An SPR release & a ban on US oil
exports would both fail to provide any lasting relief from high oil &
gasoline prices. West Texas Intermediate crude for Dec fell 80¢ (1%) to settle at $80.79 a barrel. The move marked a 3rd-weekly decline in a row for the US
benchmark, which lost 0.6% this week. Jan Brent crude the global benchmark, lost 70¢ (0.8%) at $82.17 a barrel, for a 0.7%
weekly decline. The prospect of a release of crude from the US
reserve has helped put a lid on crude prices, analysts said. 11
Dem senators early this week pressed the Biden administration to consider an SPR release or other measures, such as export bans.
Oil ends lower, down a third-straight week ahead of potential U.S. move to ease high prices
Dow Jones Industrials
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