Dow advanced 42, advancers over decliners better than 4-3 & NAZ added 16. The MLP index rose 1+ to the 287s & the REIT index gained 1+ to the 354s. Junk bond funds fluctuated & Treasuries did little. Oil went over 51 & gold was flattish at 1294.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.4357138325174409)
Federal Reserve officials held a detailed debate last month over whether forces holding inflation down were persistent or temporary, with several policy makers looking for stronger evidence of price gains before supporting a 3rd interest-rate hike this year. “Many participants expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent,” according to minutes of the Sep 19-20 meeting. Several policy makers said their decision on whether to raise rates this year “would depend importantly on whether the economic data in coming months increased their confidence” on inflation rising toward their 2% target. They left the target range for the federal funds rate unchanged while projecting another increase before the end of the year & announcing an Oct start for a gradual unwind of its $4.5T balance sheet. The minutes suggest that the forecast for another rate increase in 2017 is conditioned on economic data showing that the inflation target is within reach over the next couple of years. “It was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted,” the minutes said. Before the release of the minutes, investors saw about a 78% probability of one more rate increase by the end of the year. Getting a clear read on economic data may be difficult as some prices, such as gasoline, are affected by recent natural disasters in the US. The Fed's post-meeting statement said the hurricanes would affect the economy in the near term but were “unlikely to materially alter” its course over the medium term. The minutes added that the Fed policy makers expected Q3 growth “to be held down by the severe disruptions caused by the storms but to rebound beginning in Q4 as rebuilding got under way & economic activity in the affected areas resumed.”
Fed Minutes Show Support for Next Hike Was a Close Call for Some
The price of air travel is poised to rise again, with airlines seeing beyond recent fare wars that have cut into their profits. Delta Air Lines (DAL) profit fell more than 6% to $1.18B, partly because Hurricane Irma robbed the company of $140M in revenue from canceled flights. But investors are more likely to seize on its prediction that a proxy for average prices will rise by up to 4% over last year during Q4. Airline stocks tumbled during Jul & Aug over concern that overly rapid expansion & fare wars at several big airports were hurting profits. It appears those fears were overblown. Demand for travel remain strong. DAL enjoyed its busiest summer ever, as traffic rose 3.4% over last year while fares were relatively flat, but extra fees for things like checked bags helped the airline rake in 1.9% more money for each seat flown one mile (a closely watched measure of pricing power in the airline business). Importantly, DAL said that same figure would rise by 2 -4% in Q4 which includes holiday travel. Excluding one-time items EPS was $1.57, 4¢ better than the forecast. Despite Hurricane Irma, revenue rose 5.5% to $11.06B, also slightly better than anticipated. Execs said they expect the airline's weakest region, Asia, to improve by year end. Profit fell, however, because costs rose 8%, even faster than revenue. Labor expenses jumped 10% on higher wages, & fuel spending climbed 8% including Delta & Delta Connection planes. Fuel is a hard-to-predict cost that hangs over the industry. Airlines benefited from falling fuel prices in 2015 & 2016, but DAL paid $1.61 a gallon in Q3, up 11¢ from the summer before. The stock rose 37¢. If you would like to learn more about DAL, click on this link:
club.ino.com/trend/analysis/stock/DAL?a_aid=CD3289&a_bid=6ae5b6f7
To better incorporate all of the brands it now owns, the storied Coach company of NY is changing its name to Tapestry. The luxury goods company that came to prominence in the "Mad Men" era now owns brands like Stuart Weitzman & Kate Spade. CEO Victor Luis said that the name Tapestry is more inclusive. Coach acquired Stuart Weitzman in 2015 in a deal valued up to $574M & spent $2.4B for Kate Spade this year, seeking to broaden its appeal. Its brand of bags & other goods is alive & well, but it becomes one of 3 brands sold by the company that will be called Tapestry. "We are now at a defining moment in our corporate reinvention, having evolved from a mono-brand specialty retailer to a true house of emotional, desirable brands," Luis said. A website with the new name, which becomes official at the end of the month, is up & running. The change is part of the company's pursuit of younger shoppers who may not feel the same draw to store windows on Manhattan's 5th Avenue. It will also be changing its ticker symbol on the NYSE from "COH," to "TPR." The stock fell 1.13. If you would like to learn more about COH, click on this link:
club.ino.com/trend/analysis/stock/COH?a_aid=CD3289&a_bid=6ae5b6f7
After days dominated by friction with his sec of state & a Rep senator, Pres Trump is trying to refocus on his top legislative priority, using a Pennsylvania visit to pitch his tax overhaul as a boon for truckers. Trump's speech in Harrisburg was to be set against a backdrop of big rigs, with lots of truckers in attendance. The pres has been traveling the country to promote a plan that would dramatically cut corp tax rates from 35% to 20%, reduce the number of personal income tax brackets & boost the standard deduction. At his latest stop, Trump planned to argue that his tax reform framework would benefit truckers by lowering their tax rates, boosting manufacturing, & making it easier for families to pass their trucking businesses on to their children. "When your trucks are moving, America is growing. That is why my administration is taking historic steps to remove the barriers that slow you down," Trump said in prepared excerpts. "America first means putting American truckers first." Trump is diving back into the tax fight after weeks in which his attention has shifted to rapidly emerging crises, including the mass shooting in Las Vegas & the hurricane recovery effort in Puerto Rico, as well as dramas of his own making, such as his escalating feud with Sen. Bob Corker & public tension with Sec of State Rex Tillerson. Taxes are the chief legislative priority for Reps hungry for a major legislative achievement. Trump has left it up to Congress to fill in many specifics of his plan, which omits details such as the income levels for his new tax brackets. Reps in Congress aren't solidly behind him, with some from high-tax states balking because the framework calls for eliminating the federal deduction for state & local taxes. That deduction is claimed by an estimated 44M & costs the gov an estimated $1.3T in lost revenue over 10 years. Trump planned to highlight the tax plan's provisions aimed at encouraging intl companies to bring back, or repatriate, cash that they've kept overseas. "We will eliminate the penalty on returning future earnings back to the United States and we will impose a one-time low tax on money currently parked overseas so it can be brought back home to America, where it belongs," Trump said in the prepared excerpts. He added that his Council of Economic Advisers estimates that the change "would likely give the typical American household a $4,000 pay raise."
Stocks muddled along, giving a passing grade to the Fed minutes. While earnings season is important, tax reform will affect everybody & the entire economy. Stumbling by those guys in DC is being accepted by traders, but they want action (preferably before year-end) to keep this rally going. Dow needs another 200 to top 23K.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Federal Reserve officials held a detailed debate last month over whether forces holding inflation down were persistent or temporary, with several policy makers looking for stronger evidence of price gains before supporting a 3rd interest-rate hike this year. “Many participants expressed concern that the low inflation readings this year might reflect not only transitory factors, but also the influence of developments that could prove more persistent,” according to minutes of the Sep 19-20 meeting. Several policy makers said their decision on whether to raise rates this year “would depend importantly on whether the economic data in coming months increased their confidence” on inflation rising toward their 2% target. They left the target range for the federal funds rate unchanged while projecting another increase before the end of the year & announcing an Oct start for a gradual unwind of its $4.5T balance sheet. The minutes suggest that the forecast for another rate increase in 2017 is conditioned on economic data showing that the inflation target is within reach over the next couple of years. “It was noted that some patience in removing policy accommodation while assessing trends in inflation was warranted,” the minutes said. Before the release of the minutes, investors saw about a 78% probability of one more rate increase by the end of the year. Getting a clear read on economic data may be difficult as some prices, such as gasoline, are affected by recent natural disasters in the US. The Fed's post-meeting statement said the hurricanes would affect the economy in the near term but were “unlikely to materially alter” its course over the medium term. The minutes added that the Fed policy makers expected Q3 growth “to be held down by the severe disruptions caused by the storms but to rebound beginning in Q4 as rebuilding got under way & economic activity in the affected areas resumed.”
Fed Minutes Show Support for Next Hike Was a Close Call for Some
The price of air travel is poised to rise again, with airlines seeing beyond recent fare wars that have cut into their profits. Delta Air Lines (DAL) profit fell more than 6% to $1.18B, partly because Hurricane Irma robbed the company of $140M in revenue from canceled flights. But investors are more likely to seize on its prediction that a proxy for average prices will rise by up to 4% over last year during Q4. Airline stocks tumbled during Jul & Aug over concern that overly rapid expansion & fare wars at several big airports were hurting profits. It appears those fears were overblown. Demand for travel remain strong. DAL enjoyed its busiest summer ever, as traffic rose 3.4% over last year while fares were relatively flat, but extra fees for things like checked bags helped the airline rake in 1.9% more money for each seat flown one mile (a closely watched measure of pricing power in the airline business). Importantly, DAL said that same figure would rise by 2 -4% in Q4 which includes holiday travel. Excluding one-time items EPS was $1.57, 4¢ better than the forecast. Despite Hurricane Irma, revenue rose 5.5% to $11.06B, also slightly better than anticipated. Execs said they expect the airline's weakest region, Asia, to improve by year end. Profit fell, however, because costs rose 8%, even faster than revenue. Labor expenses jumped 10% on higher wages, & fuel spending climbed 8% including Delta & Delta Connection planes. Fuel is a hard-to-predict cost that hangs over the industry. Airlines benefited from falling fuel prices in 2015 & 2016, but DAL paid $1.61 a gallon in Q3, up 11¢ from the summer before. The stock rose 37¢. If you would like to learn more about DAL, click on this link:
club.ino.com/trend/analysis/stock/DAL?a_aid=CD3289&a_bid=6ae5b6f7
Delta sees 3Q profit slip, hints at higher average prices
To better incorporate all of the brands it now owns, the storied Coach company of NY is changing its name to Tapestry. The luxury goods company that came to prominence in the "Mad Men" era now owns brands like Stuart Weitzman & Kate Spade. CEO Victor Luis said that the name Tapestry is more inclusive. Coach acquired Stuart Weitzman in 2015 in a deal valued up to $574M & spent $2.4B for Kate Spade this year, seeking to broaden its appeal. Its brand of bags & other goods is alive & well, but it becomes one of 3 brands sold by the company that will be called Tapestry. "We are now at a defining moment in our corporate reinvention, having evolved from a mono-brand specialty retailer to a true house of emotional, desirable brands," Luis said. A website with the new name, which becomes official at the end of the month, is up & running. The change is part of the company's pursuit of younger shoppers who may not feel the same draw to store windows on Manhattan's 5th Avenue. It will also be changing its ticker symbol on the NYSE from "COH," to "TPR." The stock fell 1.13. If you would like to learn more about COH, click on this link:
club.ino.com/trend/analysis/stock/COH?a_aid=CD3289&a_bid=6ae5b6f7
Coach no more; New York company wants to be called Tapestry
After days dominated by friction with his sec of state & a Rep senator, Pres Trump is trying to refocus on his top legislative priority, using a Pennsylvania visit to pitch his tax overhaul as a boon for truckers. Trump's speech in Harrisburg was to be set against a backdrop of big rigs, with lots of truckers in attendance. The pres has been traveling the country to promote a plan that would dramatically cut corp tax rates from 35% to 20%, reduce the number of personal income tax brackets & boost the standard deduction. At his latest stop, Trump planned to argue that his tax reform framework would benefit truckers by lowering their tax rates, boosting manufacturing, & making it easier for families to pass their trucking businesses on to their children. "When your trucks are moving, America is growing. That is why my administration is taking historic steps to remove the barriers that slow you down," Trump said in prepared excerpts. "America first means putting American truckers first." Trump is diving back into the tax fight after weeks in which his attention has shifted to rapidly emerging crises, including the mass shooting in Las Vegas & the hurricane recovery effort in Puerto Rico, as well as dramas of his own making, such as his escalating feud with Sen. Bob Corker & public tension with Sec of State Rex Tillerson. Taxes are the chief legislative priority for Reps hungry for a major legislative achievement. Trump has left it up to Congress to fill in many specifics of his plan, which omits details such as the income levels for his new tax brackets. Reps in Congress aren't solidly behind him, with some from high-tax states balking because the framework calls for eliminating the federal deduction for state & local taxes. That deduction is claimed by an estimated 44M & costs the gov an estimated $1.3T in lost revenue over 10 years. Trump planned to highlight the tax plan's provisions aimed at encouraging intl companies to bring back, or repatriate, cash that they've kept overseas. "We will eliminate the penalty on returning future earnings back to the United States and we will impose a one-time low tax on money currently parked overseas so it can be brought back home to America, where it belongs," Trump said in the prepared excerpts. He added that his Council of Economic Advisers estimates that the change "would likely give the typical American household a $4,000 pay raise."
Trump turns back to tax overhaul; pitch aimed at truckers
Stocks muddled along, giving a passing grade to the Fed minutes. While earnings season is important, tax reform will affect everybody & the entire economy. Stumbling by those guys in DC is being accepted by traders, but they want action (preferably before year-end) to keep this rally going. Dow needs another 200 to top 23K.
Dow Jones Industrials
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