Markets advance carefully with Dow and gold at record levels

Dow finished up 111, advancers modestly ahead of decliners & NAZ gained 24.  The MLP index was steady in the 254s & the REIT index added 1+ to the 398s.  Junk bond funds had modest buying & Treasuries saw substantial buying which lowered yields.  Oil was off 1+ to 74 & gold jumped 19 to 2088 in record territory (more on both below).

AMJ (Alerian MLP Index tracking fund)

A federal appeals court granted Apple's (AAPL), a Dow stock, request to temporarily pause a federal trade commission’s ban on some of its Apple smartwatches amid an ongoing patent dispute with medical technology firm Masimo.  APL filed an emergency request with the US Court of Appeals for the Federal Circuit to halt the ban, which bars the import & sale of the Apple Watch Series 9 & Ultra 2 because of the US Intl Trade Commission's decision that the smartwatches infringed on Masimo's patented blood oxygen sensor technology.  AAPL began including pulse oximeters in smartwatches beginning with its Series 6 model in 2020.  The appellate court granted AAPL's request to pause the ban's implementation while Customs & Border Protection (CBP) determines whether AAPL's redesigned watches violate Masimo's patent.  CBP is expected to make its decision on Jan 12.  The ban on Apple Watches determined to have violated Masimo's patents took effect on Dec 26 after the Biden administration declined to veto the trade commission's decision.  Before the ban took effect, AAPL preemptively took steps toward compliance.  It announced on Dec 18 that it would halt sales of the Series 9 & Ultra 2 smartwatches on its website beginning on Dec 21, while the company's retail locations were to stop selling those watches after Dec 24.  The stock slid back 14¢.

Apple wins appeal to temporarily pause Apple Watch ban

2 senators have written to Elon Musk, Tesla  (Telsa's (TSLA) top exec, calling on him to “swiftly” recall any steering & suspension parts that pose a safety risk.  The letter cites “an alarming” Reuters investigation published on Dec 20 that exposed how TSLA has blamed drivers for frequent failures of components it has long known were defective.  “We write with extreme concern following recent reporting about Tesla’s knowledge of safety flaws in its vehicles and concealment of the causes of these flaws from the National Highway Traffic Safety Administration,” states the letter, which is signed by Senators Richard Blumenthal, of Connecticut, & Edward J Markey, of Massachusetts.  The senators call on Musk to correct “apparent false and misleading representations” made to the safety agency.  The Reuters report found that TSLA told NHTSA & customers that the frequent failures of defective parts in its electric vehicles were caused by driver “abuse,” such as hitting a curb.  In 2020, TSLA gave that explanation in a letter to the safety agency explaining why it would not recall a suspension part called the aft link in the US, despite having just recalled it in China.  TSLA documents show the automaker's engineers for years tracked frequent failures of aft links & other suspension, steering & axle parts, often on relatively new cars.  The company instructed its service managers to tell customers that the parts were not faulty as it struggled to contain soaring warranty costs.  “We are disturbed that you would blame your customers for these failures,” stated the letter from Blumenthal & Markey.  “It is unacceptable that Tesla would not only attempt to shift the responsibility for the substandard quality of its vehicles to the people purchasing them, but also make that same flawed argument to NHTSA.”  The stock rose 4.83.

Two U.S. senators call for Tesla recalls

Thousands of Palestinian families fled from the brunt of Israel's expanding ground offensive into Gaza’s few remaining, overcrowded refuges, as the military launched heavy strikes across the center & south of the territory, killing dozens, Palestinian health officials said.  On foot or riding donkey carts loaded with belongings, a stream of people flowed into Deir al-Balah, a town that normally has a population of around 75K.  It has been overwhelmed by several hundred thousand people driven from northern Gaza as the region was pounded to rubble.  Because UN shelters are packed many times over capacity, the new arrivals set up tents on sidewalks for the cold winter night.  Most crowded onto streets around the town's main hospital, Al-Aqsa Martyrs, hoping it would be safer from Israeli strikes.  Still, no place is safe in Gaza.  Israeli offensives are crowding most of the population into Deir al-Balah & Rafah at the territory's southern edge as well as a tiny rural area by the southern coastline.  But those areas continue to be hit by Israeli strikes that regularly crush homes full of people.  The newly displaced were fleeing from several built-up refugee camps in central Gaza targeted in the latest phase of Israel's ground assault.  One of the camps, Bureij, came under heavy bombardment throughout the night as Israeli troops moved in.  “It was a night of hell. We haven’t seen such bombing since the start of the war,” said Rami Abu Mosab, speaking from Bureij, where he has been sheltering since fleeing his home in northern Gaza.  He said warplanes flew overhead, & gunfire & explosions echoed from the eastern edge of the camp.  A home near his shelter was hit, but no one was able to reach the area, he said.  With much of northern Gaza leveled, Palestinians fear a similar fate awaits other areas, including Khan Younis, just south of Deir al-Balah, where Israeli forces launched ground operations in early Dec.  In Khan Younis, Israeli shelling struck a residential building next to Al-Amal Hospital, according to the Palestinian Red Crescent, which runs the facility.  Health Ministry spokesman Ashraf al-Qidra said at least 20 people were killed & dozens more wounded, with the death toll likely to rise.  Israel has said the bombing campaign & ground offensive are necessary to dismantle Hamas & prevent a repeat of its Oct 7 attack in which militants broke thru Israel's formidable defenses & killed 1200 people, mostly civilians, & abducted around 240.  An estimated 129 remain in captivity after dozens were freed.  Achieving its goals, Israel has said, will take “many months.”

Thousands flee widening Israeli assault in central Gaza as military launches new strikes

Gold scaled a 3-week peak as traders bought zero-yield bullion in anticipation of US interest-rate cuts next year, while a dip in the $ & bond yields also supported prices.  Spot gold was up 0.5%, at $2077 per ounce, its highest since Dec 4 & on track to gaining nearly 14% in 2023, if gains hold.  US gold futures settled 1.1% higher, at $2093.  The dollar index hit a 5-month low, & eyed its first yearly slide since 2020, making bullion more attractive for overseas buyers.  Benchmark 10-year Treasury yields also touched their lowest since Jul 24.  London's gold price benchmark climbed to an all-time high of $2069 per troy ounce, surpassing the previous record set in Aug 2020, the London Bullion Market Association said.

Gold Hits Three-Week High on Hopes of U.S. Fed Cutting Rates

Oil prices dropped nearly 2%, eating into the previous day's gains as investors monitored developments in the Red Sea, where shippers are returning despite further attacks yesterday.  Brent crude futures settled down $1.42 (1.8%) at $79.65 a barrel & West Texas Intermediate crude fell $1.46 (1.9%) to $74.11.  Danish shipping company Maersk said it has scheduled several dozen container vessels to travel via the Suez Canal & Red Sea in the coming weeks after calling a temporary halt to those routes this month after attacks by Yemen's Iran-backed Houthi militia.  France's CMA CGM also said it was resuming passage thru the Red Sea after deployment of a multinational task force to the region.  Elsewhere, oil loadings at the Russian Black Sea port of Novorossiisk were suspended because of a storm.  However, the Caspian Pipeline Consortium (CPC) terminal near the port was open, Kazakhstan's energy ministry said.

Oil Drops Almost 2% as Investors Watch Red Sea Developments

Once again stocks & gold are at or near record highs.  Of course volume is thin.  Next week this disconnect may get sorted out.

Dow Jones Industrials