Dow dropped 620 (but off session lows), decliners over advancers 3-1 & NAZ tumbled 266. The MLP index fell 2+ to the 145s & the REIT index lost 3+ to the 372s. Junk bond funds drifted lower & Treasuries continued weak. Oil was flattish in the 52s & gold rebounded 12 to 1850 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
A construction slowdown during the coronavirus pandemic is hurting demand for Caterpillar's (CAT), a Dow stock, heavy machinery, but the manufacturer said dealers & customers expect a turnaround this year. The
company said that revenue fell 15% in Q4 due to lower volumes & less demand from customers &
dealers. Revenue declined in each of it's main businesses:
construction, mining, energy & transportation. CFO Andrew
Bonfield said that
while a rebound in home construction was boosting purchases for some
machinery, spending cuts by local & state govs were weighing on
road construction. "People in an uncertain time are just not necessarily sanctioning new projects," he added. CAT sees signs of a turnaround. Its order backlog
increased in Q4 compared with the previous 3 months & a year earlier as dealers ordered new machines ahead of the
traditionally busy spring season. For the current Q1,
CAT expects stronger sales of construction equipment in
particular. "Customers are starting to feel a bit more confident," Bonfield said. Lower demand for machinery in Q4 is a
contrast to consumer-focused manufacturers, who have struggled to keep
up with large orders from customers at home buying new boats and kitchen
appliances. The
oil-&-gas industry remained a particularly weak market. Lower energy prices have led to fewer developments of oil & gas projects. In all, revenue in the qtr fell 15% to $11.3B from the qtr a year before & profit declined 29% to $780M. The stock was off 1.62.
If you would like to learn more about CAT, click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar flags signs of recovery amid slack demand
Eli Lilly (LLY) beat estimates for Q4 profit on,
boosted by strong demand for its diabetes & cancer drugs & a partial
lift from sales of its Covid-19 antibody treatment. The company
recorded $871M in quarterly sales of the Covid-19 therapy,
bamlanivimab, benefiting from the US gov's move to stock up on
the drug for emergency use. The
Covid-19 therapy belongs to a class of drugs known as
monoclonal antibodies & has been authorized for use in the US in patients who are at risk of serious illness from the
infection. Sales of key drugs in the qtr beat
expectations as high demand helped offset pricing pressures from rebates
or after-market discounts to health insurers & pharmacy benefits
managers. Sales of cancer treatment Alimta also grew 23% to $653M, trouncing estimates of $560M. The
company lowered its 2021 EPS forecast to $7.10-$7.75
per share from its prior forecast of $7.25-$7.90, citing
higher investments. It, however, kept its sales & adjusted profit
forecasts unchanged. EPS rose to $2.32 from $1.64 a year
earlier. Excluding items, EPS was $2.75, beating estimates of $2.35. Overall sales rose 21.7% to $7.44B. The stock declined 2.01.
If you would like to learn more about LLY, click on this link:
club.ino.com/trend/analysis/stock/LLY?a_aid=CD3289&a_bid=6ae5b6f7
Eli Lilly profit beats estimates on demand for its cancer and diabetes drugs
Gold futures settled higher, scoring their first gain in 7 sessions but returned a loss for the month, even though investors focused on worries about rising speculation in the stock market & the efficacy of COVID vaccines. Investors harbored concerns about a bubble in the stock market. Against high volatility in stocks, gold prices have been elevated, popping above its 50-day moving average at $1858 an ounce. Apr gold rose $9 (0.5%) to settle at $1850 after it settled 0.4% lower yesterday, marking gold's 6th straight day of declines, the longest skid for prices since the 7-session loss ended Mar 5, 2019. Based on the most-active contract settlements, prices lost 0.5% for the week & fell 2.4% from the Dec 31 finish for the Feb gold contract. Market participants are growing increasingly concerned that an army of individual investors gathering on chat forums like Reddit & battling professional short sellers, could create ripples throughout the financial system. Meanwhile, concerns that the economic recovery may take longer than hoped, even with vaccines to fight the pandemic, have been disrupting the bullish trend for stocks & buoying precious metals.
Gold logs first gain in 7 sessions, but ends lower for the month
Oil futures finished sharply higher for the month, finding support as traders remained hopeful that efforts to rein in global supplies will offset pressure on demand from the continued spread of COVID-19 & slower-than-expected vaccine rollouts. OPEC & their allies (OPEC+) agreed in Jan to keep most oil production curbs in place from Feb to the end of Mar. Additionally, Saudi Arabia agreed to implement a unilateral production cut of 1M barrels a day starting in Feb. West Texas Intermediate crude for Mar inched down 14¢ (0.3%) to settle at $52.20 a barrel. Prices based on the front-month contract was off slightly for the week, but tallied a climb of 7.6% for month of Jan. Mar Brent crude, which expired at the end of the day's session, rose 35¢ (0.6%) to end at $55.88 a barrel, logging a 0.9% weekly gain & a 7.9% increase for the month. Apr Brent, the most active & now front-month contract, fell 6¢ to $55.04 a barrel.
Oil futures gain nearly 8% for the month
The stock market had another very choppy day due to hedge funds, short selling, individual investors, beaten up stocks rebounding from near death, etc. The Dow began the day at even for Jan, but was in the red all day (& for the month). At the low, it was down 750. Buyers returned in the PM t to limit the loss. Next week may be a tough one for stock starting with sluggish economic data reports coming in the week.
Dow Jones Industrials
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