Markets rebound from substantial selling yesterday

Dow recovered 216, advancers over decliners about 5-1 & NAZ went up 104.  The MLP index rose 2+ to 256 & the REIT index gained 1+ to 591.  Junk bond funds crawled higher & Treasuries hardly budged in price (more below).  Oil slid back chump change to the high 73s & gold added 5 to 2052.

AMJ (Alerian MLP Index tracking fund)

Americans are bracing for a blow to their personal finances in 2024 as they continue to battle stubbornly high prices for necessities like food, rent & medical care.  That's according to a new survey published by Bankrate, which found that nearly 2/3 of consumers, about 63%, do not expect their personal finances to improve in 2024.  That includes 26% who expect their finances to deteriorate & 38% who think their financial situation will remain the same.  Just 37% of Americans expect their finances to improve in the new year.  The pessimism stems from still-high inflation, which was cited as the top obstacle to financial improvement.  Roughly 61% of respondents blamed the ongoing spike in prices for the potential hit to their finances next year.  "[Prices are] still notably higher than just two or three years ago, and that is what households feel," said Greg McBride, chief financial analyst at Bankrate.  "The rate of inflation may be coming down, but prices generally are not."  While inflation has fallen from the highs of mid-2022, many families have yet to see material relief.  The consumer price index is still running well above the typical pre-pandemic rate & the cost of necessities like food, gasoline, rent & child care remain far more expensive than they were just one year ago.  Chronically high prices are forcing Americans to spend about $650 more per month than they did 2 years ago, according to a recent estimate from Moody's Analytics.  Inflation has created severe financial pressures for most households, which are forced to pay more for everyday necessities like food & rent.  The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.  "A staggering 61% of those not expecting their financial situation to improve point to continued high inflation as a culprit — nearly twice that of any other reason," McBride said.  Other commonly cited reasons for the dreary financial outlook include stagnant or reduced income (32%), changing interest rates (22%) & debt (19%).  As they spend more on everyday goods, Americans are burning thru their savings & are increasingly turning to credit cards to cover those basic expenses.

Americans expect their finances to deteriorate in 2024 amid still-high inflation

Sales of new vehicles in the US are expected to increase slightly next year, as the automotive industry continues to normalize from the coronavirus pandemic & other supply chain problems since 2020.  Forecasts from leading automotive data firms are calling for a year-over-year increase of 1-4% to roughly 15.6-16.1M vehicles sold.  Such sales would be the highest since 2019, when more than 17M new cars & trucks were sold domestically.  Since that time, the auto industry has been battling production & supply chain problems sparked by the global Covid health crisis, with sales of less than 14M vehicles, the lowest in more than a decade, in 2022.  Even a small increase in US sales could be good for consumers & the economy.  It would mean more vehicles are being produced, potentially easing recent affordability concerns amid inflation, high interest rates & record high new vehicle prices.  “While the year ahead holds the promise of further increased inventory and enticing deals that consumers have eagerly awaited, 2023′s high interest rates are expected to linger, provoking conflicting market dynamics.” said Jessica Caldwell, Edmunds' head of insights.  Edmunds believes new vehicle pricing power for automakers has peaked, as improved inventory has driven incentives back into the market.  For investors, increased sales are good, but lower prices & rising incentives are expected to be headwinds for many automakers & dealers that have produced record profits in recent years.  “Automakers specifically will weigh one other key consideration in 2024: Are they satisfied with this newly established supply-demand equilibrium, or are they willing and able to push sales volumes closer to prepandemic norms?” Caldwell added.  The expected US growth compares with a 2.8% year-over-year increase in auto sales globally forecast by S&P Global Mobility.  “2024 is expected to be another year of cagey recovery, with the auto industry moving beyond clear supply-side risks, into a murkier macro-led demand environment,” said Colin Couchman, exec director of global light vehicle forecasting at S&P Global Mobility.  S&P's US sales forecast is among the highest.  It expects sales to reach 15.9M units in 2024, an estimated increase of roughly 2% from projected sales of 15.5M units in 2023.  GlobalData, which acquired LMC Automotive, is forecasting a nearly 4% increase in US new vehicle sales to 16.1M units.  Edmunds expects 15.7M new cars & trucks to be sold in 2024.  That would be a roughly 1% uptick from an estimated 15.5M cars & trucks sold in 2023.  At the low end, Cox Automotive expects 15.6M vehicle sales, driven largely by an increase in fleet or commercial sales.  Retail sales are expected to be “mostly flat,” according to Cox.

New car sales are expected to rise slightly next year in the U.S.

The 10-year Treasury yield fell as investors continued to assess the path of future rate cuts from the Federal Reserve.  The yield on the benchmark 10-year Treasury note dropped 4 basis points to 3.836%, the lowest level since Jul 24 when the 10-year yielded as low as 3.792%.  The yield on the 30-year Treasury bond dipped 2 basis points to 3.982%, while the 2-year yield was lower by 5 basis points 4.316%.  Yields move inversely to prices.  The 3rd estimate of real GDP came in lower than expected.  Real GDP rose 4.9% on an annual basis in the 3rd qtr, according to the Bureau of Economic Analysis.  That's down from the 2nd estimate’s increase of 5.2% & lower than the rise of 5.1% expected.  Initial jobless claims were little changed week over week & below, as the labor market continues to show strength.  There were 205K initial unemployment claims last week, up 2K from the previous period, according to the Dept of Labor.  The forecast was expecting 215K claims.  10-year Treasury yields have declined by almost a percentage point since the end of Oct on rising expectations that the Fed will begin cutting rates as soon as Mar.

10-year Treasury yield falls as investors assess path for rate cuts

The bulls have returned & they want to keep taking the market higher even though the background economic data is only so-so at best.  Many Americans are not feeling the benefits from higher stock prices.  With the bulls in command, the rest of the year could extend the stock market's rally.

Dow Jones Industrials 

Markets fall after 5 consecutive days of record closes for the Dow

Dow sank 475 with heavy selling in the last hour, decliners over advancers better than about 3-2 & NAZ gave back 225.  The MLP index was steady in the 254s & the REIT index fell 4+ to the 388s.  Junk bond funds were dragged lower along with stocks & Treasuries saw more buying which lowered yields.  Oil was flattish, a little under 74, & gold slid back 6 to 20245 (more on both below).

AMJ (Alerian MLP Index tracking fund)

US existing home sales rebounded in Nov from the lowest level in 13 years as easing mortgage rates lured would-be homebuyers back into the market.  Sales of previously owned homes rose 0.8% in Nov from the previous month to an annual rate of 3.8M units, snapping a 5-month losing streak, according to new data from the National Association of Realtors (NAR).  It marked the slowest pace of sales since 2010.  On an annual basis, existing home sales remain down 7.3% when compared with Nov 2022.  "The latest weakness in existing home sales still reflects the buyer bidding process in most of October when mortgage rates were at a two-decade high before the actual closings in November," said Lawrence Yun, NAR's chief economist.  "A marked turn can be expected as mortgage rates have plunged in recent weeks."  There were about 1.13M homes for sale at the end of Nov, down 1.7% from the previous month but up 0.9% from the same time one year ago.  The decline in inventory helped to drive prices higher last month.  The median price of an existing home sold in Oct was about $387K, up 4% from one year ago.  "Home prices keep marching higher," Yun said.  "Only a dramatic rise in supply will dampen price appreciation."  Homes sold on average in just 25 days last month.  While that is down slightly from the 14 days recorded in Jul 2022, it marks a major increase from prior years.  Before the COVID-19 pandemic, homes typically sat on the market for about a month before being sold.  At the current pace of sales, it would take roughly 3.5 months to exhaust the inventory of existing homes.  Experts view a pace of 6-7 months as a healthy level.  The supply crunch is largely being driven by the astronomical rise in mortgage rates over the past year.  Sellers who locked in a low mortgage rate before the pandemic began have been reluctant to sell with rates so high, leaving few options for eager would-be buyers.  However, borrowing costs have retreated over the past month as many investors believe the Federal Reserve is done with its aggressive interest-rate hike campaign.  Rates on the popular 30-year fixed mortgage are currently hovering around 6.95%, according to Freddie Mac, down from a high of 7.79% at the end of Oct but well above the pre-pandemic average of 3.9%.  "Rates have retreated some since mid-November, but they are likely still not at a level which will result in a significant increase in home listings," said Daniel Vielhaber, Nationwide economist.  "We don’t expect to see that until the second half of 2024."

Existing home sales rebound from 13-year low amid cooling mortgage rates

General Mills (GIS) said tepid demand & pricing pressures are compounding problems for the Dunkaroos & Bisquick maker.  GIS trimmed its full-year sales outlook.  With 2 qtrs remaining in the its fiscal year, the company now sees revenue down 1% to flat, compared with previous guidance of a 3-4% increase.  GIS is also cutting the high end of its earnings guidance due to the lower demand forecast.  It expects “a slower volume recovery in fiscal 2024, reflecting a more cautious consumer economic outlook.”  While GIS reported its 8th consecutive quarterly earnings beat, revenue came up well short of estimates: $5.14B vs $5.35B expected.  It was its biggest revenue miss in 8 years.  CEO Jeff Harmening said the company saw “a slower-than-expected volume recovery in the second quarter amid a continued challenging consumer landscape.”  Organic sales growth was an eyesore, unexpectedly contracting 2% versus estimates of 3.1% growth.  Every business segment saw disappointing sales, from consumer food to pet food, from domestic to intl.  Volumes fell 4% overall, led by a 5% drop in North America retail volumes.  Pricing increases continued to decelerate, contributing just 3 percentage points to sales in the latest qtr.  The company has also been boosting promotions.  “We’re seeing consumers continue to display stronger-than-anticipated value-seeking behaviors across our key markets, and this dynamic is delaying volume recovery in our categories,” Harmening said.  The stock fell 2.40 (4%).

General Mills echoes FedEx with a warning about weaker demand

A strong job market & a sturdy business climate have left Americans feeling quite jolly this Dec.  US consumer confidence improved for the 3rd consecutive month, leaping to its highest level since Jul, while recession worries abated, according to new data released yesterday by the Conference Board.  The business group's Consumer Confidence Index, a leading economic indicator of households' future spending & saving patterns, jumped to a reading of 110.7 this month from a downwardly revised 101 in Nov.  Additionally, consumers’ “perceived likelihood of a US recession” during the next 12 months fell to its lowest level seen all year.  Dec's preliminary reading far exceeded expectations of 104.5.  “December’s increase in consumer confidence reflected more positive ratings of current business conditions and job availability, as well as less pessimistic views of business, labor market, and personal income prospects over the next six months,” Dana Peterson, chief economist at The Conference Board, said.  The Dec headline index was buoyed by an improvement in consumers' outlooks for 6 months from now, particularly for their job prospects, overall business conditions & their incomes.  The Conference Board's Expectations Index shot up to 85.6 from a downwardly revised reading of 77.4 in Nov.  In assessing the future, consumers were more confident that interest rates wouldn't rise as much, that the stock market would remain strong & that their financial picture would improve.

US consumers’ confidence levels are at their highest level since July

Gold closed lower on a higher $ despite lower treasury yields as investors take profits following 2 days of gains.  Gold for Feb closed down $4 to settle at $2047 per ounce.  The metal is down from a record high of $2809 set at the start of the month & briefly fell back under the $2000 mark last week after Federal Reserve chair Jerome Powell said the central bank could begin rolling back interest rates next year, only to be contradicted by other members of the central bank's policy committee.  The drop comes as the $ rose, making gold more expensive for intl buyers.  The ICE dollar index was last seen up 0.11 points to 102.27.  Treasury yields were also lower, bullish for gold since it offers no interest.  The 2-year note was last seen paying 4.382%, down 6.0 basis points, while the yield on the 10-year note was down 5.0 basis points to 3.883%.

Gold Falls on Profit Taking as the Dollar Rises and Treasury Yields Weaken

West Texas Intermediate (WTI) crude oil rose for a 3rd-straight session as threats to Red Sea shipping from Yemen's Houthi militant group adds a geopolitical-risk premium even as US oil inventories rose & US oil production rose to a record.  WTI crude oil for Feb closed up 20¢ to settle at $74.22 per barrel, while Feb Brent crude, the global benchmark, closed up 47¢ to $79.70.  The rise comes as threats to Red Sea shipping continue as the Houthi said they will continue carrying out drone & missile attacks on Red Sea shipping in support of Hamas' war with Israel.  The attacks have forced shippers to reroute away from the Red Sea, which normally accounts for up to 15% of global shipping, &, instead go around Africa, while the US forms an intl naval response to counter the threat.  The rise also comes after the Energy Information Administration said US oil inventories rose by 2.9M barrels last week, while the consensus estimate predicted a 2.3M barrel drop.  Gasoline & distillate inventories also rose, while US oil production climbed to a record 13.3M barrels per day.

WTI Oil Rises as Threat to Red Sea Shipping From Houthi Attacks Continues While US Inventories Rise

Dow traded around breakeven for most of session until the last 1+ hours when there was very heavy selling.  Red Sea shipping disruptions are getting more attention with all the saber rattling by the Houthi rebels in Yemen.  Tomorrow has the makings of an exciting time for stocks.

Dow Jones Industrials 

Markets waffle while stocks edge higher

Dow slipped back 10, advancers over declines 2-1 & NAZ was up 46.  The MLP index added 1+ to the 255s & the REIT index rose 1+ to the 395s.  Junk bond funds were weak & Treasuries had limited buying which reduced yields slightly.  Oil was fractionally higher to the 74s & gold fell 6 to 2046.

AMJ (Alerian MLP Index tracking fund)

Mortgage demand fell last week compared with the previous week, despite a continued drop in rates, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index.  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726K or less) decreased to 6.83% from 7.07%, with points increasing to 0.60 from 0.59 (including the origination fee) for loans with a 20% down payment.  Even with the recent decline, rates are still much higher than they were at the start of the Covid pandemic.  “With the positive news about the drop in inflation, and the FOMC [Federal Open Market Committee] projections proclaiming a pivot towards rate cuts, the 30-year fixed mortgage rate reached its lowest level since June 2023,” said Mike Fratantoni, MBA senior VP & chief economist.  “At least as of last week, borrowers’ response to this rate move was rather tepid,” Fratantoni added.  Applications to refinance a home loan dropped 2% for the week ended Fri, after jumping 19% the week before, according to the MBA.  Refinance demand was 18% higher than the same week one year ago, however.  Applications for a mortgage to purchase a home declined 1% for the week & were 18% lower than the same period last year.  Despite the drop in demand, the Mortgage Bankers Association predicted good news ahead for the market, despite expecting a “mild recession” in the first ½ of next year.  “We expect that this path for monetary policy should support further declines in mortgage rates, just in time for the spring housing market,” the group said, referring to the Federal Reserve's recent signal that it is looking to cut its benchmark rate multiple times next year.  “We are forecasting modest growth in new and existing home sales in 2024, supporting growth in purchase originations.”  The association said it expects mortgage origination volume to increase 22% in 2024 to $2T, with a 14% rise in purchase volume & a 56% jump in refinance demand.

Mortgage demand slips despite another drop in interest rates

The 10-year Treasury yield fell to its lowest level since Jul as traders assessed the path of future rate cuts from the Federal Reserve.  The yield on the benchmark 10-year Treasury note was last down around 4 basis points to 3.879%.  Earlier in the session, it hit a low of 3.871%, its lowest level since Jul 27 when the 10-year yielded as low as 3.839%.  The 2-year yield slipped about 6 basis points to 4.382%.  Meanwhile, the yield on the 30-year Treasury bond dropped 3 basis points to 4.005%.  Yields move inversely to prices & 1 basis point equals 0.01%.  Treasury yields have come off their highs after the Fed last week indicated 3 likely interest rate cuts in 2024.  The unexpectedly dovish pivot prompted a steep fall in the 10-year yield as investors increased bets on a quicker loosening of monetary policy.  Economic data releases today will include a 3rd-qtr US current account reading, followed by Nov's existing home sales figures & Dec consumer confidence data.

10-year Treasury yield falls below 3.9% to lowest since July

FedEx (FDX) shares fell after the package delivery giant cut its revenue forecast as weaker demand hit sales.  The expects a low-single-digit decline in revenue for the fiscal year, down from a previous forecast for flat sales year over year.  The forecast expected a revenue drop of less than 1% in the current fiscal year.  It's the 2nd consecutive qtr FDX has lowered its revenue outlook.  Its Express unit, its largest, was especially challenged in the qtr with lower demand, surcharges & customers shifting to cheaper services.  “In the remainder of [fiscal] 2024, we expect revenue will continue to be pressured by volatile macroeconomic conditions, negatively affecting customer demand for our services across our transportation companies,” FedEx added.  Its fiscal year ends May 31.  The company said, however, that operating income would improve thanks to its cost-cutting plan.  For the 3-month period ending Nov 30, EPS was $3.55 versus $3.07 a year earlier.  Adjusting for certain items, the company posted EPS or $3.99, up more than 25% from a year earlier but below analyst forecasts.  The company credited cost-cutting initiatives for its higher profit.  Revenue fell 3% to $22.2B from a year earlier versus $22.4B expected.  “When you step back and review how our business has performed in environments with suppressed demand, we are delivering much better profitability today than we have historically,” FedEx CEO Raj Subramaniam said.  The stock tumbled 10.73 (11%).

FedEx shares tumble 10% after weaker demand hit revenue outlook

Dow began trading higher but lost its strength after notching 5 straight record closes.  FDX earnings above signals all is not well for the economy.

Dow Jones Industrials 

Markets extend rally on the prospect of interest rate cuts

Dow climbed 251 to yet another record high, advancers over decliners 4-1 & NAZ was up 98.  The MLP index added 2 to the 254s & the REIT index rose 3+ to the 293s.  Junk bond funds continued in demand & Treasuries were purchased, lowering yields.  Oil added 1+ to the 73s & gold was up 12 to 2052 (more on both below).

AMJ (Alerian MLP Index tracking fund)

New US home construction roared back to life in Nov as falling mortgage rates helped draw consumers back into the housing market.  Housing starts surged 14.8% last month to an annual rate of 1.56M units, the highest level since May, according to new Commerce Dept, well above the forecast for a pace of 1.36M units.  However, applications to build, which measures future construction, fell in Nov, sliding 2.5% over the course of the month to an annualized rate of 1.46M units.  When compared with the same time last year, building permits are up about 4.1%.  The data comes one day after the National Association of Home Builders/Wells Fargo Housing Market Index (NAHB), which measures the pulse of the single-family housing market, rose 3 points to 37.  The increase followed a 6-point drop in Nov.  Any reading below 50 is considered negative.  "With mortgage rates down roughly 50 basis points over the past month, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look," said Alicia Huey, NAHB chair.  Sentiment among builders began steadily falling at the end of the summer after mortgage rates shot above 7%, throttling demand among would-be homebuyers.  However, borrowing costs have retreated over the past month as many investors believe the Federal Reserve is done with its aggressive interest-rate hike campaign.  Rates on the popular 30-year fixed mortgage are currently hovering around 6.95%, according to Freddie Mac, down from a high of 7.79% at the end of Oct but well above the pre-pandemic average of 3.9%.  "Mortgage rates have continued to float down in the early weeks of December, so this momentum should continue through year end, welcomed news for buyers who have been unlocked by affordability to enter the market once again," said Nicole Bachaud, Zillow senior economist.

Housing starts unexpectedly surge in November as mortgage rates fall

After a 2-year slump below its pandemic high, online shopping made a comeback this holiday season.  The CNBC All-America Economic Survey finds 57% of Americans naming online shopping as their top 1 or 2 destinations for Christmas gifts.  In 2006, online shopping accounted for just 18% of responses.  It hit an all-time high in 2020, at the height of the pandemic, when 55% responded it was the top destination.  It scaled back to 51% last year, holding on to some but not all of its pandemic gains.  But this year, it hit yet another all-time high.  The survey of 1002 Americans throughout the country was conducted Dec 8-12 & has a margin of error of +/-3.1%.  The reason for the surge is unclear but a look at those spending more online this year suggests it could center around a search for bargains to combat inflation.  Among those groups spending more online are women 50 & older who as a group reported more frugal holiday spending plans than average & are more concerned about inflation & the overall condition of the economy.  Still, the group shops less online than younger women aged 18-49.  Also spending more online this year than last are those with incomes below $30K & those who plan to spend only $200 on gifts, far below the $1300 average.  “We know from the rest of the data that inflation is a major factor in why people are spending less and more,″ said Micah Roberts of Public Opinion Strategies, the Rep pollster for the survey.  “Everything costs more, so you’re going to have to spend more to buy it.”  While groups differ over how much they spend online, where they spend is fairly uniform: Amazon (AMZN).  Once again, & continuously since the question was first asked 6 years ago, AMZN is the #1 destination for online shopping & no one else is close.  Back in 2017, just 35% of the public said AMZN was their top online destination.  Today, that percentage has risen to a commanding 74%, unchanged from last year but below its 2019 high.  While groups differ over how much they spend online, where they spend is fairly uniform: AMZN.  

Online shopping for holidays exceeds 2020 pandemic high, CNBC survey shows

It looks like it’s going to be both a green & a blue Christmas.  The CNBC All-America Economic Survey finds American views on the economy in a continued slump, echoed in increasingly negative views on Pres Biden's job approval, & yet holiday spending plans are buoyant.  The survey shows intended holiday spending per person rocketed up to $1300 this year, 31% above last year.  While the number was driven by a small number of respondents saying they will spend large sums, the gains still amount to double digits when those answers are removed.  What’s more, 18% say they will spend more, up from just 11% last year & the highest since 2019.  Among those spending more, 32% say it's because they are being paid more or have higher incomes, up 2 points from last year; 24% say it's because of inflation, down 6 points.  Meanwhile, among those spending less this year, 37% say it's because of inflation, up from 15% last year.  The survey underscores the increasing divide between dour American economic sentiment & upbeat economic data.  Multiple surveys have found downbeat economic views but data continues to show robust consumer spending.  Recent reports show surging 3rd-qtr growth, a low unemployment rate & strong holiday spending.  The survey found modest improvements in views on the economy, but they remain mostly depressed.  80% view the economy as just fair or poor, down 3 points from the Oct & 19% say it's excellent or good, up 3 points.  But those levels are heavily depressed from the pre-pandemic levels in Dec 2019 when 53% of the public said the economy was good or excellent.  The outlook also improved a bit, with 24% of the public saying they expect the economy to improve, up from 19% in Oct, but still down from 30% in 2019.  For the full year, the 66% of Americans who are negative about the current state of the economy & the outlook represents an all-time high in the 17 years of the survey.  Inflation looks to be driving economic sentiment with 30% of respondents saying it's the #1 issue facing the nation, down just 2 points from the high last qtr despite a continued decline in the inflation numbers, a potential sign that Americans are less concerned that prices aren't rising as fast anymore as they are that prices have risen & remain high.  Inflation is followed by immigration & border security, chosen by 18% as the leading issue, & foreign policy & national security, which rose 4 points to 12%.  Biden's approval numbers do not fare well in any of the 3 categories surveyed.  His overall approval rate fell to 35%, the lowest the survey has recorded in his presidency, from 37% in the prior qtr, while his disapproval edged up a point to 59%.  At -24, the pres's approval is the most underwater it’s been during his term.  His economic approval numbers are worse.  Approval rose a point to 33% & disapproval declined a point to 62%.  But they remain more underwater at -29% than his overall approval numbers.  On foreign policy, the pres's 33%-63% approval & disapproval numbers leave him 34 points underwater, compared with -29 in Oct.

Holiday spending to be up big even as approval of Biden hits new low, CNBC economic survey shows

Gold moved higher for a 2nd day as the $ & treasury yields weakened.  Gold for Feb closed up $11 to settle at $2052 per ounce.  The metal is down from a record high of 2089 set at the start of the month & briefly fell back under the $2000 mark last week after Federal Reserve chair Jerome Powell said the central bank could begin rolling back interest rates next year, only to be contradicted by other members of the central bank's policy committee.  The $ weakened early, making gold more affordable for intl buyers.  The ICE dollar index was last seen down 0.39 points to 102.17.  Treasury yields were also lower, bullish for gold since it offers no interest.  The 2-year note was last seen paying 4.446%, down 2.2 basis points, while the yield on the 10-year note was down 2.3 basis points to 3.915%.

Gold Closes Higher on a Weaker Dollar and Lower Yields

West Texas Intermediate (WTI) crude oil closed higher for a 2nd day on supply concerns as ships rerouted from the Red Sea, while the US announced a multi-nation naval effort to protect ships moving in the area from drone and missile attacks from Houthi militants based in Yemen.  WTI crude for Jan closed up 97¢ to settle at 73.44 per barrel, while Feb Brent crude, the global benchmark, closed up $1.28 to $79.23.  Prices rose after BP & others suspended shipping thru the key waterway for ships transiting the Suez Canal because of the attacks from the Yemen group in support of Hamas in its war with Israel.  As much as 15% of global shipping passes thru the region, according to the Dept of Defense.  Secretary of Defense Lloyd Austin said a combined naval operation made up of ships from the US, the UK, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles & Spain would ensure the safety of Red Sea shipping.

WTI Closes Higher on Red Sea Disruption as the US Recruits Allies to Fend Off Houthi Attacks

While the Dow is reaching new heights, demand for gold & Treasuries is strong with gold near its record.  Generally risky investments (stocks) & safe haven investments don't go up at the same time.  Now the Red Sea which handles a great deal of commerce could be caught up in the MidEast war & that would negatively impact the price of oil.  Nervous investors are buying safe haven gold & Treasuries.

Dow Jones Industrials 

Markets moved higher as rate cut hopes persist

Dow climbed 212, advancers over decliners 5-1 & NAZ went up 80.  The MLP index added 2+ to the 253s & the REIT index rose 4 to the 394s.  Junk bond funds crawled higher & Treasuries had buying which reduced yields.  Oil was up 1+ to the 73s & gold gained 15 to 2055.

AMJ (Alerian MLP Index tracking fund)

Attacks by Iran-backed Houthi militants on ships in the Red Sea have already rocked global trade.  And there could be more disruptions & price increases to come for shipments of goods & fuel.  Several major shipping lines & oil transporters have suspended their services thru the Red Sea as more than a dozen vessels have come under attack since the start of the Israel-Hamas war in early Oct.  Help appears to be on the way.  Defense Secretary Lloyd Austin, who is visiting Bahrain, said American forces along with the UK, Bahrain, Canada, France, Italy, Netherlands, Norway, Seychelles & Spain would create a new force to protect ships in the region.  MSC, Maersk, Hapag Lloyd, CMA CGM, Yang Ming Marine Transport & Evergreen have all said they will be diverting all scheduled journeys immediately to secure the safety of their seafarers & vessels.  Collectively, these ocean carriers represent around 60% of global trade.  Evergreen also said it would temporarily stop accepting any Israel-bound cargo, suspending its shipping service to Israel.  Orient Overseas Container Line (OOCL), which is a part of Chinese-owned COSCO Shipping Group, has also stopped accepting Israeli cargo, citing operational issues.  “About 30% of Israeli imports come through the Red Sea on container vessels that are booked two to three months in advance for consumer or other products, meaning that if the voyage will now be extended, products with a shelf life of two to three months will not be worthwhile importing from the Far East,” said Yoni Essakov, who sits on the exec committee of the Israeli Chamber of Shipping.  “Importers will need to increase stock due to the uncertainty and pay much more and others will lose out on their markets as time to market is not competitive,” Essakov added.  Yesterday oil giant BP (BP) said it would also pause shipping activity in the Red Sea as the Yemen-based Houthis continue their attacks.  “The safety and security of our people and those working on our behalf is BP’s priority. In light of the deteriorating security situation for shipping in the Red Sea, BP has decided to temporarily pause all transits through the Red Sea,” the company said.  “We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”  Oil tanker group Frontline also said it is avoiding the Red Sea.

Global supply chain under threat after militant attacks in the Red Sea

US officials yesterday expanded a multinational maritime force in the Red Sea to defend against escalating attacks from the Iran-backed Houthi rebels, which have impeded intl shipping routes.  “The recent escalation in reckless Houthi attacks originating from Yemen threatens the free flow of commerce, endangers innocent mariners, and violates international law,” Defense Secretary Lloyd Austin said.  The new defense, named Operation Prosperity Guardian, builds on the power of the Combined Maritime Forces, a 39-member international coalition.  The CMF operates under the US Navy Fifth Fleet in Bahrain to protect maritime access & stability.  A subdivision of the forces, called Task Force 153 is dedicated to the Red Sea.  “What we’re trying to do is is strengthen and bolster it, and operationalize it, in ways that perhaps it hadn’t been operationalized prior to these Houthi attacks,” National Security Council spokesman John Kirby said of Task Force 153.  The expansion comes as a flood of companies pause their shipping activity along that popular Suez Canal route due to the elevated threat from the Houthis.  Oil giant BP announced yesterday it would temporarily suspend its shipping in the Red Sea, joining companies like shipping firms Maersk, MSC & others.  Operation Prosperity Guardian will aim to deter further Houthi attacks as the US eyes potential flare-ups of regional conflict amid the Israel-Hamas war.  The US has so far shot down dozens of Houthi drones heading towards commercial ships.  In recent weeks, Yemen's Houthi rebel group has launched a slew of drone attacks against commercial ships crossing the Red Sea.  The Iran-backed Houthis have previously warned that any ship connected to Israel is a “legitimate target” until the war in Gaza ends, and many commercial ships have been caught in the crossfire.

US launches Operation Prosperity Guardian to defend Red Sea shipping lanes from Houthi attacks

On Sep 26 Target (TGT), a Dividend Aristocrat, set off a national firestorm when it said it would close 9 stores in 4 states because theft & organized retail crime had made them too dangerous to run.  On its face, TGT's announcement was evidence that retail crime was preventing one of the country's most prominent retailers from operating stores profitably & safely.  It challenged skeptics who believed that retailers had exaggerated the impact of organized retail crime & used it as an excuse for poor financial performance.  There was just one problem with the explanation TGT gave for closing stores: The locations it shuttered generally saw fewer reported crimes than others it chose to keep open nearby, a monthslong investigation has found.  The findings cast doubt on TGT's explanation & raise questions about whether the company's announcement was designed to advance its legislative agenda — seeking a crackdown on organized retail crime — & to obscure poor financial performance at the stores as it grapples with sliding sales.  In some cases, TGT chose to keep operating stores in busier areas that had better foot traffic or higher median incomes, even though the locations saw more theft & violence, the probe revealed.  In those areas, police departments may be better funded due to higher tax bases & shoppers may have more to spend on discretionary goods.  Many of the locations TGT closed were “small-format” stores the company opened over the last 5 years as part of an experiment to expand its footprint in dense, urban areas.  The moves followed TGT's decision to shutter 4 similar stores in the spring that it said were underperforming.  At the time it announced the 9 store closures in Sep, TGT said, “We cannot continue operating these stores because theft and organized retail crime are threatening the safety of our team and guests, and contributing to unsustainable business performance. We can only be successful if the working and shopping environment is safe for all.”  The news came just hours after the National Retail Federation (NRF) issued a key annual retail security survey — in which it said violence at stores had increased but losses from theft hadn't changed much — & exactly 1 month before the trade group was planning to lobby Congress for stiffer punishment for organized theft offenders.  TGT CEO Brian Cornell sits on the NRF's board of directors & is a member of its exec committee.  The stock rose 1.23.

Target blamed theft and violence for 9 closures. Crime is higher at stores it kept open nearby

Piracy in the Red Sea is getting more attention because it affects a large percentage of global trade.  Now the US & its allies have to show they are serious about enforcing this mission.  Meanwhile investors are mesmerized about thoughts of lower interest rates even though background economic is only so-so at best.

Dow Jones Industrials 

Markets waver as they struggle to extend the rally

Dow inched up about 1 (good enough for a new record), advancers barely ahead of decliners & NAZ rose 90.  The MLP index added 2+ to the 252s & the REIT index slid back 1+ to the 391.  Junk bond funds hardly changed & Treasuries had some selling, raising yields.  Oil continued strong, up 1 to the 72s, & gold gained 5 to 2040 (more on both below).

AMJ (Alerian MLP Index tracking fund).

Confidence among builders in the US housing market rebounded in Dec from an 11-month low as high mortgage rates finally began to fall.  The National Association of Home Builders/Wells Fargo Housing Market Index (NAHB), which measures the pulse of the single-family housing market, rose 3 points to 37, slightly more than expected.  The increase followed a 6-point drop in Nov.  Any reading below 50 is considered negative.  "With mortgage rates down roughly 50 basis points over the past month, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look," said Alicia Huey, NAHB chair.  Sentiment among builders began steadily falling at the end of the summer after mortgage rates shot above 7%, throttling demand among would-be homebuyers.  But borrowing costs have retreated over the past month as many investors believe the Federal Reserve is done with its aggressive interest-rate hike campaign.  Rates on the popular 30-year fixed mortgage are currently hovering around 6.95%, according to Freddie Mac, down from a high of 7.79% at the end of Oct but well above the pre-pandemic average of 3.9%.  The recent decline has prompted a burst of optimism among homebuilders that the worst may be over.  "The housing market appears to have passed peak mortgage rates for this cycle, and this should help to spur home buyer demand in the coming months, with the HMI component measuring future sales expectations up six points in December," said NAHB chief economist Robert Dietz.

Homebuilder sentiment stirs back to life as mortgage rates fall

VF Corp (VFC), a Dividend Aristocrat, reported that a hack had affected its ability to fulfill some orders ahead of the holidays.  Hackers encrypted “some” systems & made off with personal data.  Those are some hallmarks of ransomware, where attackers try to extort companies in exchange for hefty payment. VFC declined to comment on whether the incident was a ransomware attack.  VFC announced the incident on the same day that the Securities & Exchange Commission's new cyber disclosure rules took effect.  Those regulations mandate that companies report “material cybersecurity incidents” to their investors within 4 days of determining that a hack would have an effect on their bottom lines.  VFC first identified hackers in its system on Dec 13, meaning it took relatively little time for the company to identify the threat as material.  The attack is expected to hit the company's operations in the lead up to the critical holiday shopping period.  The company said the breach has affected its ability to fulfill orders, but customers will still be able to place them online.  The full scope of the attack is still not known & it will likely continue to have a material impact until recovery efforts are complete, the company added.  The stock sank 1.56 (8%).

VF Corp. shares tumble as it says cyberattack could hamper holiday fulfillment

Oil major has joined a growing list of firms pausing shipping through the Suez Canal following a series of attacks on vessels by Houthi militants from Yemen, as the US pledged an intl effort to combat the situation.  “In light of the deteriorating security situation for shipping in the Red Sea, bp has decided to temporarily pause all transits through the Red Sea,” the company said.  “We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.”  During a trip to Israel today, Defense Secretary Lloyd Austin said the attacks were “reckless, dangerous,” & that they “violate international law.”  “So we’re taking action to create an international coalition to address this threat,” he said.  “This is not just a U.S. issue, this is an international problem and it deserves an international response.”  Austin said he was convening a virtual meeting tomorrow with ministers in the region & beyond “to ensure freedom of navigation in the area.”  Norwegian energy firm Equinor said it had chosen to reroute its ships in the area but had not made a decision on future activity.  Oil tanker group Frontline said it would avoid passages thru the Red Sea in the near-term.  Shipping giants MSC, Hapag-Lloyd, CMA CGM & Maersk have also all announced suspensions of travel thru the Red Sea due to the drone threat, meaning no access to the key link between Europe & Asia between the Middle East & North Africa.

BP becomes latest to pause Red Sea shipments as Houthi attacks continue

Gold edged higher, staying firmly above the $2000 mark as the $ eased while treasury yields rose.  Gold for Feb was last seen up $4 to $2040 per ounce.  The metal is down from a record high of $2809 set at the start of the month & briefly fell back under the $2000 mark last week after Federal Reserve chair Jerome Powell said the central bank could begin rolling back interest rates next year, only to be contradicted by other members of the central bank's policy committee.  Gold ended the week higher & continues to hold up above $2K raising the question whether a Santa rally could come.  The $ moved lower making the metal more affordable for intl buyers.  The ICE dollar index was last seen down 0.01 points to 102.54. Treasury yields were higher, raising the carrying cost of owning gold.  The 2-year note was last seen paying 4.472%, up 3.7 basis points, while the yield on the 10-year note was up 4.9 basis points to 3.963%.

Gold Closes Higher on a Weaker Dollar as Treasury Yields Climb

West Texas Intermediate (WTI) closed higher, gaining a geopolitical-risk premium as attacks on Red Sea shipping by Houthi militants in Yemen have forced the suspension of some shipments through the Suez Canal.  WTI crude for Jan closed up $1.04 to settle at $72.47 per barrel, while Feb Brent crude, the global benchmark, was last seen up $1.50 to $78.05.  BP said it is suspending tanker shipments thru the Red Sea, joining other shippers who have stopped transiting the sea following drone & missile attacks on ships by the Houthi in support of Hamas & to impede Israel's war on the group.  Fresh attacks were reported today by the UK Navy.  The attacks come as hedge funds cover short positions as hedge funds sold oil ahead of last week's meeting of the Federal Reserve's policy committee, according the Commodities Futures Trading Commission's commitments of traders report.

WTI Crude Oil Closes With a Gain as Attacks Force the Suspension of Some Red Sea Shipping

In the AM buyers tried to take stocks higher, but that effort did not last.  Sellers returned at midday to a rise measured in chump change.  The Dow looks very tired.  The rebels from Yemen are becoming a bigger part of the story for oil.

Dow Jones Industrials 

Markets edge higher, hoping to build on the recent advance

Dow was up 18, advancers over decliners almost 5-4 & NAZ gained 42.  The MLP index rose 2+ to the 252s & the REIT index was steady in the 392s.  Junk bond funds were mixed & Treasuries saw a little selling, raising yields (more below).  Oil recovered 2+ to the 73s & gold was even at 2035.

AMJ (Alerian MLP Index tracking fund)

Chicago Federal Reserve Bank Pres Austan Goolsbee said that the Fed's fight against inflation isn’t over yet despite encouraging signs that inflationary pressures are easing without triggering a recession.  The Federal Open Market Committee (FOMC), which acts as the Fed’s policymaking arm, last week opted against an additional rate hike & instead chose to leave the benchmark federal funds rate unchanged at 5.25-5.50%, the highest level in 22 years.  The Fed began aggressively raising interest rates last year to tamp down inflation, which peaked at a 4-decade high of 9.1% in Jun 2022 & has gradually declined to 3.1% this Nov, though it's still well above the Fed's 2% target.  Goolsbee said that the US has "made a lot of progress in 2023, but I still caution everybody it’s not done. And so the data is gonna drive what’s gonna happen to rates."  "It’s too early to declare victory," Goolsbee said.  "We made a lot of progress. So the thing to remember is every time in the past that the Fed or other central banks around the world have had to get inflation down a lot, it has basically always been accompanied by a major recession."  "We still get one more month of data, but 2023 looks like it’s going to end up being a very substantial reduction in inflation without a big increase in the unemployment rate, that’s the golden path that I talked about, but we’re still above target," Goolsbee explained.  "We gotta get inflation down to target," he added.  "Until we are convinced that we’re on the path to that, it’s an overstatement to be counting the chickens."  Goolsbee acknowledged that there has been some concerning economic data, such as a 12% year-over-year increase in homelessness, as well as delinquencies rising in credit card debt, auto lending and small business lending.  He also noted that geopolitical risks like the war in Ukraine & the Middle East conflict between Hamas & Israel could weigh on the economy.  "So if oil prices were to start rising substantially again, the way they have in the last few years, that would be a major supply shock problem facing the economy," Goolsbee said.  "If we saw expansions of wars, if we saw collapse in China, if we saw a series of things around the world or if we got a big credit crunch in the United States and deterioration of the banking sector, all of those would be threats. And those kind of external shocks we call ‘em, they have derailed easier soft landings than this in the past in 1990 and 2001."  At the Fed's policy meeting last week, the central bank’s economic projections showed that a majority of policymakers believed that interest rates would decline to 4.6% by the end of 2024.

'Too early to declare victory' on inflation, Chicago Fed president says

MSC, the world's largest shipping carrier, said it is no longer traveling thru the Suez Canal after its container ship, the MSC PALATIUM III, was attacked Fri while transiting the Red Sea under a subcharter to Messina Line.  “Due to this incident and to protect the lives and safety of our seafarers, until the Red Sea passage is safe, MSC ships will not transit the Suez Canal Eastbound and Westbound. Already now, some services will be rerouted to go via the Cape of Good Hope instead.”  MSC explained the new routing will impact the sailing schedules by several days for vessels booked for Suez transit.  “We ask for your understanding under these serious circumstances,” the advisory continued.  This announcement follows the announcement in the pause of Red Sea& Bab al-Mandeb Straight travel by shipping giants, Hapag-Lloyd & Maersk, following a series of attacks on their vessels by Iranian-backed Houthi militants from Yemen.  Maersk, the world's 2nd-largest container shipping company, moves 14.8% of the world's trade.  It said it would divert ships away from the Red Sea.  The Houthi group backs Hamas, the Palestinian militant group & has said it is targeting vessels headed for Israel.  A Maersk spokesman said the Danish company is deeply concerned about the highly escalated security situation in the southern Red Sea & Gulf of Aden.  The recent attacks on commercial vessels in the area are alarming & pose a significant threat to the safety & security of seafarers, the spokesman added, saying that employees’ safety is the company's top priority.  “Following the near-miss incident involving Maersk Gibraltar yesterday and yet another attack on a container vessel today, we have instructed all Maersk vessels in the area bound to pass through the Bab al-Mandab Strait to pause their journey until further notice,” the representative said.  Hapag-Lloyd, which controls about 7% of the global container ship fleet, said that it will “pause all container ship traffic through the Red Sea until Monday. Then we will decide for the period thereafter.”  The Bab el-Mandeb Strait is between the Horn of Africa & the Middle East.   It connects the Red Sea to the Gulf of Aden & the Arabian Sea, which feed into the Indian Ocean.  This waterway is used by container ships & exports of petroleum & natural gas from the Persian Gulf.  Approximately 12% of the world's trade, which includes 30% of all global containers, move through the Suez Canal.  That then feeds thru the Red Sea & Bab el-Mandeb.  The significance of the Suez Canal was thrust into the spotlight in Mar 2021, when the container ship Ever Given was stuck for 6 days.

MSC, the world’s largest shipping carrier, joins shipping giants Hapag-Lloyd and Maersk in Red Sea travel pause amid attacks

The 10-year Treasury note yield slipped as traders continued to digest the unexpectedly dovish tone of the Federal Reserve last week.  The yield on the 10-year Treasury  was more than 1 basis point lower at 3.913%.  On Thurs, the yield fell below the 4% level, hitting its lowest since Jul.  The 2-year Treasury  yield eased by more than 3 basis points to 4.417%, below the closely watched 4.5% level.  Yields & prices move in opposite directions & 1 basis point equals 0.01%. The Fed last week held its key interest rate steady & revealed that policymakers were penciling in at least 3 rate cuts next year, marking a more aggressive series of cuts than what was previously hinted.  Deutsche Bank strategists described the Fed’s move as a “big shift” from the higher-for-longer narrative, though they noted some Fed officials went against the notion rate cuts are a current topic of discussion.  “But the big question is now when these rate cuts might happen, and on Friday we had some mild pushback from Fed officials against the market excitement,” they added.  On Fri, New York Fed Pres John Williams said, “We aren’t really talking about rate cuts right now.”

10-year Treasury yield slips to start the week

The bulls are struggling to extend the stock market's recent rally.  But the stock market is extremely overbought & will need more helpful economic articles to take it higher.  The war in the MidEast is getting more investor attention.

Dow Jones Industrials 

Markets pause while investors digest the recent rally

Dow went up 56 for another record, decliners over advancers better than 2-1 & NAZ gained 52.  The MLP index was off 1 to 251 & the REIT index retreated 6+ to the 391s.  Junk bond funds continued mixed & Treasuries wrapping up a wild week of trading finished flattish today.  Oil slid back pennies in the 71s & gold fell 13 to 2031 in volatile trading (more on both below).

AMJ (Alerian MLP Index tracking fund)

General Motors (GM) will lay off 1314 employees at 2 factories in Michigan in connection with ending production of vehicles.  GM filed a WARN notice that said the Orion Assembly plant's expected layoff date will take place on Janu 1, Lansing Grand River Assembly/Stamping as GM ends production of the Camaro muscle car built there.  The cuts will happen in phases that begin Jan 1 & end in Mar.  Those cuts are related to GM's Oc announcement that it was delaying production of 2 all-electric pickups at the plant by a full year & transferring nearly 1000 workers to other GM facilities in Michigan.  GMs' self-driving vehicle unit, Cruise, announced the layoffs amid an ongoing safety investigation into its robotaxis, impacting nearly 1 in 4 employees.  The announcement came shortly after GM let go of 9 Cruise execs amid the safety probe, including COO Gil West.  This all comes as GM announced Wed that it was making several changes to its product development team & promoting execs to lead the next phase of the company's growth strategy. "We are committed to full transparency and are focused on rebuilding trust and operating with the highest standards when it comes to safety, integrity, and accountability," the memo said.  "As a result, we believe that new leadership is necessary to achieve these goals."  The automaker stated that it would offer employees affected by the cuts jobs elsewhere in the company.  The stock was off 49¢.

General Motors slashing workforce at two Michigan plants

Treasury Secretary Janet Yellen urged China to shift from a state-driven approach in economic policy to healthy competition with the US, saying that their current approach is "unfair."  "The PRC deploys unfair economic practices, from non-market tools, to barriers to access for foreign firms, to coercive actions against American companies," Yellen said, at the US-China Business Council's 50th anniversary dinner in DC.  "These policies harm American workers and firms."  The treasury secretary said that China's state-driven approach can discourage investors, urging the nation to "shift away" from their current economic policy.  "If the PRC were to shift away from its state-driven economic approach in industry and finance, I believe that would be better for the PRC as well," Yellen added.  "Too strong a role for state-owned enterprises can choke growth and an excessive role for the security apparatus can dissuade investment."  Citing a recent US-China Business Council member survey, Yellen noted that firms are reconsidering investment plans & said this should be concerning for the PRC.  "These trends should be concerning to China, and point to the potential benefits to China of pursuing structural reforms and treating foreign firms fairly," Yellen said.  "Beyond attracting more foreign investment, this would help address the inefficiencies and vulnerabilities that have resulted from China’s economic practices, at a critical moment in its economic trajectory."  The treasury secretary also reiterated her previous comments that the world's 2 largest economies would not decouple, calling complete separation from China "damaging."  "I and other U.S. officials have repeatedly stated that the United States does not seek to decouple from China," Yellen said.  "This would be damaging to both our economies and would have negative global repercussions."

Yellen says China's economic practices 'unfair,' encourages healthy competition

Darden (DRI) reported quarterly earnings that beat expectations & raised its annual guidance, helped by sales growth at chains such as Olive Garden & LongHorn Steakhouse.  Sales rose 9.7% from the year-ago period, which the company said was driven by the inclusion of Ruth's Chris Steak House locations and a same-restaurant sales increase of 2.8%.  Olive Garden same-restaurant sales were up 4.1%, while LongHorn Steakhouse saw a 4.9% jump for the qtr.  Fine dining lagged, as sales fell 1.7% for the qtr.  “The consumer appears to be resilient, but more selective,” said CEO Rick Cardenas.  CFO Raj Vennam also noted that DRI expects the inflation environment to improve halfway thru the fiscal year.  But he said restaurant foot traffic is projected to be down for the full year.  “We continued to profitably grow market share again this quarter as we outperformed industry same-restaurant sales and traffic,” said Cardenas.  The restaurant group also updated its fiscal 2024 outlook, forecasting adjusted EPS of $8.75-8.90, up from the company's previous estimate of $8.55-8.85, excluding Ruth's Chris transactions & integration costs. The LongHorn Steakhouse owner also projects $11.5B in sales for the fiscal year, as well as 50-55 new restaurant openings.  The stock fell 68¢.

Olive Garden owner Darden beats earnings estimates, ups guidance as sales climb

Gold trimmed a weekly gain as traders reassessed how aggressive the Federal Reserve's pivot to easing monetary policy next year.  The precious metal slipped by as much as 0.8% as comments from 2 Fed officials diminished hopes for a sharper pace of rate reduction next year.  A faster pace of cuts would be positive for the non-interest bearing metal.  Bullion's upside has been kept for most of the year as the Fed embarked on the most aggressive monetary tightening in decades to contain inflation & cool the labor market.  Earlier this week, Fed officials indicated at their last meeting of the year that they expect to cut rates by 75 basis points next year.  That prompted economists to call for the central bank to ease policy earlier & faster.  Meanwhile, economic data released today showed that US factory production rebounded in Nov, reflecting a pickup in activity at carmarkers & parts suppliers following the end of the United Auto Workers' strike.  Gold slid 0.8% to $2020 an ounce for a 0.8% weekly gain.

Gold Trims Weekly Gain as Market Rethinks Fed Pivot to Easing

West Texas Intermediate (WTI) crude oil closed lower amid volatile trading.  WTI crude for Jan closed down 15¢ to settle at $72.13, after trading between $70.30-72.22.  Feb Brent crude, the global benchmark, was last seen down 8¢ to $76.53.  The drop follows on forecasts for higher 2024 demand from the Energy Information Administration, OPEC & the Intl Energy Agency.  All 3 see demand continuing to rise next year amid continuing OPEC+ supply cuts, putting the focus on non-OPEC supply gains.

WTI Crude Oil Closes With a Loss Amid Volatile Trading

Dow reached another record which makes investors happy.  The challenge is to keep this rally going in the face of headwinds.  This week Dow finished up an impressive 1060 & for the month nearly 1355.

Dow Jones Industrials