Wednesday, April 24, 2019

Market rally pauses on mixed earnings reports

Dow fell 59, advancers barely ahead of decliners & NAZ lost 18.  The MLP index was off 1+ to the 253s & the REIT index added 3 to the 376s.  Junk bond funds slid lower & Treasuries continued in demand.  Oil pulled back to the 65s & gold rose 4 to 1277 (more on both below).

AMJ (Alerian MLP Index tracking fund)

Live 24 hours gold chart [Kitco Inc.]

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Norfolk Southern (NSC) delivered a 23% improvement in Q1 profit as the railroad began implementing a comprehensive plan to cut costs & improve productivity.  The company said had EPS of $2.51, up from $1.93 last year.  The results easily beat the $2.17 estimate.  "Our first-quarter results reflect the initial steps in the implementation of our new strategic plan that are transforming our company," CEO Jim Squires said.  Revenue grew 5% to $2.84B  even though the number of shipments it delivered in the qtr was flat.  The revenue topped the forecast of $2.8B.  These are the first quarterly results since NSC announced plans in Jan to follow the rest of the industry in overhauling its operations.  The railroad is in the process of building a new headquarters in Atlanta.  NSC operates about 20K miles of track in 22 states & the DC.  The stock rose 5.03.
If you would lilke to learn moer about NSC, click on this link:

Norfolk Southern railroad hauls in 23% more profit

Ford (F) will invest $500M in electric truckmaker Rivian & build an emissions-free vehicle with the company's proprietary platform, the firms said.   Auto manufacturers are rushing to produce new plug-in options as govs across the globe seek to impose tighter regulations on vehicles emissions.  On top of the new vehicle slated to be produced in conjunction with Rivian, Ford has already announced 2 fully electric models in development: A Mustang-inspired crossover & a new version of the popular F-150 pickup.  The race is leading to new partnerships between other carmakers, part suppliers & startups.  Ford CEO Jim Hackett called it "a different world, in terms of what's going to emerge."  “As we continue in our transformation of Ford with new forms of intelligent vehicles and propulsion, this partnership with Rivian brings a fresh approach to both,” Hackett said.  Rivian will remain an independent company after the investment, but Joe Hinrichs, Ford's new head of automotive operations, will join its board of directors.  “This strategic partnership marks another key milestone in our drive to accelerate the transition to sustainable mobility,” said Rivian founder & CEO RJ Scaringe.  “We are excited to use our technology to get more electric vehicles on the road."  Ford stock went up 7¢.
If you would like to learn more about F, click on this link:

Gold futures ended higher, rebounding from their lowest levels of the year, as a rally in stocks that took 2 of the 3 main US equity indices to records cooled, providing support for the haven metal.  However, a perky $ — hovering around its highest level in about 22 months — kept prices for the metal off the session's high.  Gold for Jun delivery rose $6.20 (0.5%) to settle at $1279 an ounce.  The most-active contract settled at its lowest levels since Dec 26.  The yellow metal had now posted gains in 2 of the past 7 sessions.  The recent bout of weakness in gold has made some assets pegged to the precious asset appear more attractive.

Gold ends higher as the U.S. stock market pauses its rally

US benchmark oil futures pulled back from their highest levels since Oct, with a hefty gain in weekly domestic crude stockpiles prompting the first loss in 4 sessions.  Brent oil futures managed to finish a few cents higher as energy-market participants assessed the likelihood of producers quickly ramping up supply in response to tougher US action against Iran's oil market.  US West Texas Intermediate crude for Jun delivery fell 41¢ (0.6%) to settle at $65.89 a barrel, after settling yesterday at its highest in almost 6 months.  Jun Brent crude, the global benchmark, tacked on 6¢ at $74.57 a barrel, logging another finish at its highest since late Oct.  The Energy Information Administration (EIA) reported that US crude supplies rose by 5.5M barrels last week.  Analysts expected a decline of 500K barrels.  The American Petroleum Institute yesterday reported an increase of 6.9M barrels.  Meanwhile, the EIA data also showed inventory declines of 2.1M barrels for gasoline & 700K barrels for distillates last week.  The S&P Global Platts survey had shown expectations for supply declines of 1.1M barrels for gasoline & 1M barrels for distillates.

U.S. oil benchmark posts first loss in 4 sessions as domestic supplies surprise to upside

Glamor from yesterday's advance faded today.  The  popular stock indices were generally in the red today, with a little selling into the close.  Earnings are the most popular topic for traders & they will be watched closely.

Dow Jones Industrials

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