Markets wobble while gold rises again

Dow fell 23, advancers over decliners better than 2-1 & NAZ rose 159.  The MLP index was up 1+ to the 292s & the REIT index was steady in the 376s.  Junk bond funds were mixed & Treasuries continued in demand which reduced yields.  Oil finished up about 1 to the 83s & gold roared ahead 26 to 2369.

Dow Jones Industrials 

Federal Reserve officials at their Jun meeting indicated that inflation is moving in the right direction but not quickly enough for them to lower interest rates, minutes showed.  “Participants affirmed that additional favorable data were required to give them greater confidence that inflation was moving sustainably toward 2 percent,” the meeting summary said.  Though the minutes reflected disagreement from the 19 central bankers who took part in the discussion, with some even indicating a penchant toward raising rates if necessary, the meeting concluded with Federal Open Market Committee voters holding rates in place.  The Fed targets 2% annual inflation, a level it has been above since early in 2021.  Officials at the meeting said data has improved lately, though they are want more evidence that it will continue.  Meeting participants “emphasized that they did not expect that it would be appropriate to lower the target range for the federal funds rate until additional information had emerged to give them greater confidence that inflation was moving sustainably toward the Committee’s 2 percent objective.”  At the meeting, policymakers also provided an update on economic projections & monetary policy over the next several years.  The FOMC “dot plot” showed 1 qtr percentage point cut by the end of 2024, down from the 3 indicated following the last update in Mar.  Even though the dot plot indicated 1 cut this year, futures markets continue to price in 2, starting in Sep.  Also, the committee largely left its economic projections intact, though they lowered their inflation expectations for this year.

Fed says it’s not ready to cut rates until ‘greater confidence’ inflation is moving to 2% goal

Vice President Kamala Harris' allies are privately discussing what her candidacy would look like if Pres Biden dropped out of the race for the White House & how they could help her, following Biden's disastrous debate performance.  These conversations have been held over phone calls & text messages between some people who raised money for the VP during her failed 2020 Dem primary campaign against Biden & other contenders, leakers said.  Key issues include whether Harris would control the massive Biden-Harris campaign war chest managed by Biden's team if the pres were to drop out of the race.  Harris has emerged as an early favorite to replace the pres at the top of the ticket, but this does not guarantee that the Dem National Convention in Chicago will not feature more contenders & a potentially messy battle for the nomination.  Harris would likely have the keys to most of the money, according to Biden campaign manager Julie Chavez Rodriguez, who acknowledged the rules during a recent call with party donors.  Biden's campaign began Jun with $91M in cash on hand, according to Federal Election Commission records.  The entire political operation, which includes Biden's joint fundraising committees, entered Jul with $240M on hand, according to the campaign.

Vice President Kamala Harris’ past donors privately strategize in case Biden drops out

Mortgage rates increased this week, approaching nearly 7% again as rates remain stubbornly high & continue to hinder the housing market.  Freddie Mac's latest Primary Mortgage Market Survey showed that the average rate on the benchmark 30-year fixed mortgage climbed to 6.95% this week from 6.86% last week.  The average rate on a 30-year loan was 6.81% a year ago.  The average rate on the 15-year fixed mortgage also rose, jumping to 6.25% from 6.16% last week.  One year ago, the rate on the 15-year fixed note averaged 6.24%.

Mortgage rates climb to 6.95%

Markets closed early today ahead of tomorrow's holiday.  Officials are still on the sidelines for rate cuts.  More important are the goings on with Biden's election team.  Chaos is everywhere in DC & it will be difficult for the stock market to advance until this mess is straightened out!

Markets are mixed after a sluggish jobs market report

Dow was off 61, advancers over decliners 3-1 & NAZ gained 62.  The MLP index added 2+ to 294 & the REIT index crawled up 1 to the 377s.  Junk bond funds edge higher & Treasuries were heavily purchased which lowered yields (more below).  Oil slid lower in the 82s & gold surged 40 to 2374.

Dow Jones Industrials 

Hiring by US companies slowed more than expected in Jun, pointing to a labor market that is continuing to cool in the face of higher interest rates, according to the ADP National Employment Report.  Companies added 150K jobs last month, missing the 160K gain that was predicted & down from the revised 157K figure in May.  At the same time, the report showed that wage growth, a key driver of inflation, dropped slightly to 4.9%, the slowest pace of growth since Aug 2021.  For workers who changed jobs, wages climbed 7.7%, down from the 7.8% increase recorded in May.  Job growth was almost entirely concentrated in the services sector, with goods producers contributing just 14K jobs to the total.  Hospitality& leisure accounted for the bulk of the gains, adding 63K new jobs.  Job growth beyond that sector was mostly anemic.  The construction industry added 27K workers in Jun, followed by professional & business services with a gain of 25K.  There were also sectors that saw notable declines last month.  Natural resources & mining shed 8K jobs, while manufacturing lost 5K.  "Job growth has been solid, but not broad-based," said Nela Richardson, ADP chief economist.  "Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month."  The weaker-than-expected report comes in the wake of an aggressive tightening campaign by the Federal Reserve, which has raised interest rates to the highest level since 2001.  Traders are watching the labor market closely for signs that it is finally cooling, so the Fed can pivot to cutting interest rates.  Central bank officials have indicated that rate cuts will begin later this year but cautioned they need to see more evidence that inflation is returning to their 2% target.

US private job growth slows in June to just 150,000, worse than expected

The 10-year Treasury yield retreated for another session after weak economic data.  The yield on the 10-year Treasury dropped by around 7 basis points to 4.364% & the 2-year Treasury yield was last at 4.685%, sliding by about 5 basis points.  Yields & prices have an inverted relationship, so falling yields mean higher prices for Treasuries & 1 basis point equals 0.01%.  The 10-year yield took a leg down following economic releases today signaling that the labor market is cooling.  ADP data showed weaker private payroll growth than expected in Jun, while weekly claims for unemployment benefits came in higher than economists forecast.  The latest numbers are a prelude to Fri's closely watched nonfarm payroll report for Jun.  Bond yields across the board declined later after ISM services data came in notably below expectations.  This data added to growing concerns that the US economy is slowing down.  The bond market closes early today & will remain dark tomorrow for the Fourth of July holiday.  This afternoon, traders will watch for minutes from the policy-setting Federal Open Market Committee's Jun meeting.

10-year Treasury yield tumbles after weak economic data

Ford (F) sales rose 1% during the 2nd qtr over the year-earlier period, led by a 5% gain in truck sales, the automaker said.  Ford truck sales, which includes pickups & vans, totaled 309K vehicles during the period, the company’s best 2nd-qtr performance for the category since 2019.  Sales in its F-Series totaled 199K vehicles.  Sales of Ford electric vehicles totaled 24K during the 2nd qtr, up 61%.  The automaker said its EVs, in particular the Mustang Mach-E & F-150 Lightning, are drawing new customers to the company.  Meanwhile, sales of hybrid vehicles totaled 54K, an increase of 56% & a new quarterly sales record for Ford since it began offering hybrid models more than 20 years ago.  Automakers including Ford have been leaning on hybrids to ease the EV transition & help achieve tightening federal fuel efficiency standards.  Auto industry forecasters including Cox Automotive & Edmunds expect 2nd-qtr sales industrywide to be roughly flat year over year.  The stock lost a penny.

Ford sales edge 1% higher in the second quarter, led by trucks

The markets will close early today, ahead of tomorrow's holiday.  Hopes are growing for an interest-rate cut even as the Fed chair once again signaled a lack of urgency to act.  Traders are pricing in 65% odds of a move lower in Sep, according to CME's FedWatch tool.  Meanwhile gold is seeing significant demand.

Markets gain as Powell notes inflation progress

Dow climbed 162 (session high), advancers over decliners better than 2-1 & NAZ gained 149.  The MLP index stayed near 291 & the REIT index was up 1+ to the 376s.  Junk bond fund were a little higher & Treasuries rose in price, taking yields a little lower.  Oil was fractionally lower, going below 83, & gold slid 2 to 2336 (more on both below).

Dow Jones Industrials 

The number of available jobs in the US unexpectedly grew in May, signaling continued resilience in the labor market.  Job openings jumped higher to 8.1M in May, from a downwardly revised 7.9M in Apr, according to the Bureau of Labor Statistics' latest Job Openings & Labor Turnover Survey (JOLTS) report.  The forfecast had expected openings would fall to 7.9M.  Despite the uptick in job postings, which can be quite volatile May's JOLTS report marked a significant milestone for the US labor market.  The ratio of job openings to those who are unemployed fell to 1.2 available jobs per job seeker, matching the figure seen in Feb 2020, a month prior to the pandemic lockdowns that shocked the global economy.  That ratio has been steadily moving lower since hitting a record 2.0 in Mar 2022.  Other seasonally adjusted measures of labor turnover showed continued stability in the US jobs market, which has gradually cooled in recent months while remaining historically strong.  The estimated number of hires moved up to 5.8M from 5.6M in Apr; layoffs & separations bounced higher to 1.6M in May, up from 1.5M; while the number of voluntary quits inched upward to 3.46M from 3.45M.  While both hires & job openings rates (as a percentage of total employment) ticked higher for May, the quits rate & layoffs rate were unchanged.  Economists have been closely watching the quits rate, which has held steady at 2.2% for 7 months running, as it serves as a signal for workers' willingness to test the labor market's waters.  When people switch jobs, that typically can correlate to bigger pay bumps, which in turn potentially could make it more difficult to rein in inflation.

US job openings unexpectedly grew in May

General Motors (GM) reported its best quarterly sales in more than 3 years, including notable increases in full-size pickup trucks & all-electric vehicles.  The automaker reported sales of 697K for the 2nd qtr, up 0.6% from a year earlier & its highest quarterly units sold since the 4th qtr of 2020.  Its EV deliveries increased 40% compared to a year earlier to 22K units.  Still, EVs made up only 3.2% of its total 2nd-qtr sales.  Sales of GM's full-size pickup trucks were roughly 229K during the 2nd qtr, up about 6% from a year earlier & the best quarterly sales since 2021.  GM's total sales thru the first ½ of the year were down 0.4%, however, compared to a year earlier to roughly 1.3M vehicles.  GM's 2nd-qrr sales are expected to slightly outpace the overall industry.  Auto industry forecasters such as Cox Automotive& Edmunds expect 2nd-qtr sales industrywide, including Jul 1, to be roughly level from a year earlier amid slowing retail demand.  An unknown outlier in the 2nd qtr is how much of an effect cyberattacks on dealer software provider CDK Global will have on sales.  The Jun 19 ransomware attack forced CDK, a market leader, to shut down its dealer management system, affecting close to ½ of all dealerships in North America.  “The CDK cyberattacks have thrown a monkey wrench into sales during the second half of June, affecting what is arguably one of the most lucrative and busiest times of the month and quarter for dealerships,” said Jessica Caldwell, Edmunds' head of insights.  GM said its “dealers who use the CDK platform are working to meet strong customer demand under difficult circumstances. Some deliveries may be delayed until Q3.”  The stock rose 26¢.

GM reports best U.S. quarterly sales since 2020

The Food & Drug Administration approved Eli Lilly’s (LLY) Alzheimer’s drug donanemab, expanding the limited treatment options for the mind-wasting disease in the US.  The agency approved the treatment, which will be sold under the brand name Kisunla, for adults with early symptomatic Alzheimer's disease.  Nearly 7M Americans have the condition, the 5th-leading cause of death for adults over 65, according to the Alzheimer’s Association.  By 2050, that group is projected to rise to almost 13M in the US.  It's a long-awaited win for LLY after donanemab faced obstacles in its path to market.  The FDA rejected the drug's approval last year due to insufficient data, then surprisingly delayed it again in Mar.  Earlier this month, an advisory panel to the agency recommended the treatment for full approval, saying the benefits outweigh its risks.  LLY's drug slowed Alzheimer's progression by 35% over 18 months compared with a placebo, according to a late-stage trial.  Patients were able to end their treatment & switch to a placebo after 6, 12 or 18 months after they hit certain goals for amyloid plaque clearance.  The stock fell 7.50.

FDA approves Eli Lilly Alzheimer’s drug, expanding treatment options in the U.S.

Gold prices edged lower as Treasury yields held firm, while investors digested comments from Federal Reserve Chair Jerome Powell & looked forward to US jobs data due later this week for more signals on US interest rate cuts.  Spot gold was down 0.3% at $2324 per ounce & US gold futures settled 0.2% lower at $2333.  The benchmark 10-year Treasury yield hit a 1-month high yesterday & stayed elevated today, making non-yielding bullion less attractive.  Data today showed US job openings rose to 8.1M in May.  Focus now shifts to Fri's non-farm payrolls, which will be crucial in assessing whether the US labor market remains resilient against the backdrop of decades-high interest rates.  Gold is down 5% from a record high of $2449 per ounce it touched on May 20, a rally caused by safe-haven demand driven by geopolitical & economic uncertainty as well as persistent central bank buying, a crucial category of demand.

Gold down as elevated bond yields weigh, US jobs data in focus

West Texas Intermediate (WTI) crude oil closed lower, unable to stick early session gains on expectations for high summer demand, continuing violence in the Middle East & an early start to the hurricane season.  WTI crude oil for Aug closed down 57¢ to settle at $82.81 per barrel, after earlier touching $87.46 & Sep Brent crude, the global benchmark, was last seen down 31¢ to $86.29.  The drop comes despite expectations summer demand is surging, with forecasts calling for a big drop in US oil inventories in reports from the American Petroleum Institute & later from the Energy Information Administration.  Mideast tensions continue to run hot, with Israel pressing its war on Hamas in Gaza, while threatening to expand hostilities into Lebanon as conflicts between Israeli forces & the Iran-backed Hezbollah militia heat up & Houthi militants continue attacks on Red Sea shipping.  The rise also comes as Hurricane Beryl strengthened to a category 5  storm packing winds of 165-miles per hour, according to the National Hurricane Center.  Beryl is the most powerful storm to ever rise in Jun, spurred by high ocean temperatures, but it is not expected to disrupt production from platforms in the northern gulf.

WTI Crude Closes Lower Despite Summer Demand, Geopolitical Risk and an Early Start to Hurricane Season

Stocks rose in the PM after comments by a Fed official that officials should be prepared for rate cuts.  Otherwise the stock market had a quiet day & the Dow continues to trend sideways, a little below its 40K peak.

Markets waver as investors weigh Powell comments

Dow was off 4, advancers over decliners 3-2 & NAZ added 40.  The MLP index moved up 1 to the 291s & the REIT index rose 1 to 376.  Junk bond funds were up slightly & Treasuries rose in price, bringing lower yields (more below).  Oil steadied in the 83s & gold dropped 5 to 2333.

Dow Jones Industrials 

Federal Reserve Chair Jerome Powell said that policymakers have made "quite a bit" of progress on fighting inflation, but that he needs to see more evidence before starting to reduce interest rates.  Powell said that inflation reports from Apr & May show that price pressures are fading from the economy & reiterated that the Fed wants that progress to continue.  "I think the last reading, and the one before it to a lesser extent, do suggest that we are getting back on a disinflationary path," he added.  "We want to be more confident that inflation is moving sustainably down to 2% before we start the process of loosening policy."  Officials voted at their most recent meeting in May to hold interest rates steady at 5.25% - 5.50%, the highest level since 2001.  Although policymakers left the door open to rate cuts later this year in their post-meeting statement, they also stressed the need for "greater confidence" that inflation is coming down before easing policy.  Since then, there has been some evidence that inflation is starting to ease again.  The May producer consumption index showed that inflation had cooled slightly to 2.6%, from a high of 7.1%.  At the same time, core prices, which are more closely watched by the Fed because they strip out volatile measurements like food & energy, also climbed 2.6%, the slowest annual rate since Mar 2021.  "That represents really significant progress," Powell continued.  "We've made a lot of progress. We just want to understand that the levels that we're seeing are a true reading of what's happening with underlying inflation."  Both of those figures remain above the Fed's 2% target.  Most investors now expect the Fed to begin cutting rates in Sep or Nov & are penciling in just 2 reductions this year — a dramatic shift from the start of the year, when they anticipated 7 rate cuts beginning as soon as Mar.

Fed's Powell says prices are ‘back on disinflationary path,’ but more confidence is still needed

Tesla (TSLA) reported 2nd-qtr vehicle production & deliveries numbers for 2024, beating expectations.  Total deliveries in Q2 were 444K vehicles & total production in Q2 were 411K vehicles.  These numbers beat estimates.  Analysts expected deliveries to hit 439K in the & months ending Jun 30.  The total number of deliveries in the 2nd qtr was down 4.8% from 466K a year earlier but 14.8% higher than the first qtr of 2024.  Deliveries are the closest approximation of sales disclosed by the electric vehicle maker.  TSLA groups deliveries into 2 categories — Model 3 & Model Y vehicles, & all other vehicles — but doesn't report numbers for individual models or specific regions.  Its current lineup includes its popular Model Y crossover utility vehicles, Model 3 sedans & the new Cybertruck pickups, as well as the Model X SUV & flagship Model S sedan.  The stock jumped 20 to about 230.

Tesla shares rise on better-than-expected Q2 deliveries report

Treasury yields fell after Powell cited progress on squashing stubborn inflation.  The yield on the benchmark 10-year Treasury note fell more than 3 basis points to about 4.44%, while the yield on the 2-year Treasury note fell 3 basis points to trade at about 4.74%.  Yields & prices move in opposite directions & 1 basis point is equivalent to 0.01%.  In his remarks, Powell expressed satisfaction with the progress on inflation over the past year but said he wants to see more before being confident enough to start cutting interest rates.  “I think the last [inflation] reading and the one before it to a lesser, lesser extent, suggest that we are getting back on the disinflationary path,” Powell said.  “We want to be more confident that inflation is moving sustainably down toward 2% before we start the process of reducing or loosening policy.”  The consumer price index, a broad inflation gauge that measures a basket of goods & services costs across the US economy, showed no increase in May though it increased 3.3% from a year ago.  The Labor Dept's Job Openings & Labor Turnover Survey (JOLTS) showed openings changed little at 8.1M, down by 1.2M over the year.

Treasury yields fall as Powell says U.S. getting back on ‘disinflationary path’

Stocks are showing signs of fatigue as show in the Dow chart above.  The trading week is dominated by Fri's crucial Jun jobs report & will be shortened for the Jul 4 holiday.

Markets pause ahead of jobs data on Friday

Dow was up 50, decliners better than advancers 2-1 & NAZ gained 146.  The MLP index edged up 1+ to the 289s & the REIT index slid back 3+ to the 375s.  Junk bond funds continued to be in demand & Treasuries saw very heavy selling, raising Treasury yields.  Oil shot up 1+ to the 83s & gold was steady at 2340 (more on both below).

Dow Jones Industrials 

Measuring the strength of the sprawling US economy is no easy task, so one firm is sending artificial intelligence in to do the job.  The Zeta Economic Index, launched today, uses generative AI to analyze what its developers call “trillions of behavioral signals,” largely focused on consumer activity, to score growth on both a broad level of health & a separate measure on stability.  At its core, the index will gauge online & offline activity across eight categories, aiming to give a comprehensive look that incorporates standard economic data points such as unemployment & retail sales combined with high-frequency information for the AI age.  “The algorithm is looking at traditional economic indicators that you would normally look at. But then inside of our proprietary algorithm, we’re ingesting the behavioral data and transaction data of 240 million Americans, which nobody else has,” said David Steinberg, co-founder, chair & CEO of Zeta Global.  “So instead of looking at the data in the rearview mirror like everybody else, we’re trying to put it out in advance to give a 30-day advanced snapshot of where the economy is going,” he added.  The * verticals the economic index uses include automotive activity, dining & entertainment, financial services such as credit line expansion, health care, retail sales, technology & travel.  For the stability measure, the index will look to gauge consumers' ability to handle gyrations in the economy.  Together, the goal is to provide something more expansive than gross domestic product & similar measures to gauge growth.  In Jun, both measures had good news, with the economic score at 66 & the stability index at 66.1.  Respectively, the 2 readings correspond to “active” & “stable” regarding the health of the economy.  “This is maybe a more holistic way of really predicting the economy because not only are you taking the existing economic indicators around GDP, employment, all the different reporting that comes down on different vertical sales, you’re layering on top of it,” Steinberg said.  “We’re really looking at what they’re actually spending. We’re looking at what they’re actually reading and researching,” he added.  “We’re seeing all of that information, which allows us to build a better forecast.”

A new index is using AI tools to measure U.S. economic growth in a broader way

Boeing (BA), a Dow stock, will buy back its struggling fuselage maker Spirit AeroSystems (SPR) in an all-stock deal that the plane maker has said will improve safety & quality control.  It said it agreed to pay $37.25 a share in BA stock for SPR, giving the aerospace company an equity value of $4.7B.  Including its debt the deal has a transaction value of $8.3B.  SPRs shares closed Fri at $32.87 a share, giving it a market capitalization of about $3.8B.  BA CEO Dave Calhoun, who has said he will step down at the end of the year, said bringing Spirit in-house will “fully align” the companies’ production systems & workforces.  “Among the many actions we’re taking as a company, this is one of the most significant in demonstrating our unwavering commitment to strengthen quality and make certain that Boeing is the company the world needs it to be,” Calhoun said in a message to employees.  He said he expects the deal to close mid-2025, subject to approval by regulators, SPR shareholders & the sale of SPR's operations dedicated to Airbus planes.  BA stock rose 4.91 & SPR was up 1.10 to 34.

Boeing agrees to buy fuselage maker Spirit AeroSystems in $4.7 billion deal

Nvidia (NVDA) is set to be charged by the French antitrust regulator for allegedly anti-competitive practices, making it the first enforcer to act against the computer chip maker.  The French statement of objections or charge sheet would follow dawn raids in the graphics cards sector in Sep last year, which sources said targeted NVDA.  The raids were the result of a broader inquiry into cloud computing.  The world's largest maker of chips used both for artificial intelligence & for computer graphics has seen demand for its chips jump following the release of the generative AI application ChatGPT, triggering regulatory scrutiny on both sides of the Atlantic.  The company in a regulatory filing last year said regulators in the EU, China & France had asked for information on its graphic cards.  The European Commission is unlikely to expand its preliminary review for now, since the French authority is looking into NVDA.  The French watchdog in a report issued Fri on competition in generative AI cited the risk of abuse by chip providers.  It voiced concerns regarding the sector's dependence on NVDA's CUDA chip programming software, the only system that is 100% compatible with the GPUs that have become essential for accelerated computing.  It also cited unease about NVDA's recent investments in AI-focused cloud service providers such as CoreWeave.  Companies risk fines of as much as 10% of their global annual turnover for breaching French antitrust rules, although they can also provide concessions to stave off penalties.  NVDA stock rose 76¢.

Nvidia set to face French antitrust charges

Gold prices edged higher, buoyed by some short covering from investors with focus turning to US jobs data due later this week that could offer more cues around interest rate cuts by the Federal Reserve.  Spot gold was up 0.2% at $2329 per ounce.  Prices registered a more than 4% gain in the 2nd qtr.  US gold futures settled mostly unchanged at $2338.  US manufacturing contracted for a 3rd straight month in Jun & a measure of prices paid by factories for inputs dropped to a 6-month low amid weak demand for goods, indicating that inflation could continue to subside.  This week, the focus will be on remarks from Chair Jerome Powell tomorrow, followed by minutes from the central bank's latest policy meeting on Wed & US non-farm payrolls data due on Fri.ens new tab

Gold holds ground as investors await US jobs data

Oil futures ended solidly higher, extending on last week's gains after shaking off an initial dip following data that showed a fall in China's crude demand in May.  Chinese oil-refinery output fell 1.8% year over year in May.  West Texas Intermediate crude for Aug rose $1.84 (2.3%) to settle at $83.38 a barrel.  That was the highest front-month contract close since Apr 26.  Sep Brent crude, the global benchmark, rose $1.60 (1.9%) to $86.60 a barrel, the highest close since Apr 30.  The number of active US oil-drilling rigs fell by 6 in the latest week, according to Baker Hughes data.

Crude prices climb to 2-month high on summer demand prospects, 5th weekly fall in U.S. oil rigs

Stocks got off to a sluggish start in this week with the Fourth of July holiday.

Markets hesitate as Treasury yields jump higher

Dow was off 16, decliners over advancers 5-2 & NAZ went up 82.  The MLP index stayed in the 288s & the REIT index fell 5+ to the 373s on higher interest rates.  Junk bond funds crawled higher & Treasuries had heavy selling, sharply raising yields (more below).  Oil rose about 1 to the 82s (more below) & gold slid back 1 to 2338.

Dow Jones Industrials 

Treasury yields were higher as investors awaited key economic data due this week & digested the latest inflation insights.  The yield on the 10-year Treasury was up by nearly 10 basis points at 4.441% & the 2-year Treasury yield was last more than 6 basis points higher at 4.781%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Investors considered the latest economic data & looked ahead to insights from the labor market expected this week.  On Fri, the personal consumption expenditures price index showed that inflation slowed to its lowest annual rate in over 3 years in May.  Core PCE, which excludes food & energy, rose by a seasonally adjusted 0.1% on a monthly basis in May & 2.6% from a year earlier, which was in line with previous estimates.  Headline inflation including food & energy was flat from the previous month & increased 2.6% on an annual basis, which was also in line with forecasts.  The data comes as Federal Reserve officials have repeatedly said that they are looking for more data evidence of inflation & the economy easing before making decisions about when & how often to cut interest rates this year.  Further insights about the state of the economy are expected this week, when a series of labor market data is due.  That includes job openings figures for May, ADP's latest private payrolls report & the Jun jobs report, which includes nonfarm payrolls.  Should the numbers indicate an easing of the labor market, hopes for interest rate cuts could be boosted.

10-year Treasury yield climbs as investors look to data in week ahead

US crude oil futures rose ahead of the Fourth of July holiday, after booking a 6% gain last month on the back of fears of a wider Middle East war & expectations of rising summer fuel demand.  Though oil prices have been steadily rising, the average price for a gallon of gasoline stands at $3.49 nationwide, down about 5¢ from last month.  West Texas Intermediate  Aug contract was $82.04 per barrel, up 50¢ (0.6%) & YTD US oil has gained 14.5%.  Brent  Sep contract was $85.58 per barrel, up 58¢ (0.7%) & YTD, the global benchmark is ahead by 11.1%.  Oil market speculators have added long positions, betting on higher prices as tensions rise between Israel & the Iran-backed Hezbollah militia in Lebanon.

U.S. crude oil rises, tops $82 per barrel ahead of Fourth of July holiday

Starbucks (SBUX) cafes across the country are starting to change how they make drink orders, among other tweaks designed to reduce bottlenecks & long wait times that have dogged the chain.  The overhaul comes as the coffee giant prepares for an anticipated swell of orders through its mobile app.  At the heart of the plan is “Siren Craft System,” a series of processes that aim to make baristas' jobs easier & speed up service times for customers.  More than 10% of its 10K stores have already implemented the system, which includes changing the production order for hot & cold drinks.  It will be deployed across North America by the end of Jul.  Execs hope the changes will provide a much needed jolt to SBUX.  In Apr, the company reported a disappointing 2nd qtr, as US same-store sales fell 3% & traffic dropped 7%.  The coffee chain cut its 2024 outlook.  SBUX reported rates of incomplete mobile app orders in the mid-teens & said occasional customers came in less.  CEO Laxman Narasimhan mentioned the need to make improvements to stores.  SBUX has done something uncharacteristic in recent weeks, joining the stream of value offerings with a $5 food & beverage combo option.  Communicating value to customers is also part of the plan to drum up business.  The stock dropped 88¢.

Inside Starbucks’ plans to improve stores for customers and baristas

Stocks started trading higher but enthusiasm faded bringing popular averages to around even.  However there is limited demand for tech stocks on NAZ.  Higher yields do not warm the hearts of traders in a holiday shortened week.  US manufacturing activity data released today showed the Institute for Supply Management's manufacturing PMI fell further into contraction territory in Jun, hitting a 4-month low.  In the meantime, the prospect of political gridlock in France is gripping investors after the first round of voting in national elections.