Dow sank 191. decliners over advancers around 2-1 but NAZ went up 96, nearing record highs. The MLP index fell 3 to 206 & the REIT index was off 1 to 450. Junk bond funds inched higher & Treasuries were sold bringing higher yields. Oil dipped below 72 & gold plunged 77 to 1784 for one of its worst days in history after a hawkish Fed surprise.
AMJ (Alerian MLP index tracking fund)
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The number of Americans filing for first-time jobless benefits unexpectedly rose off a pandemic low last week, according to the Dept of Labor. Data showed 412K Americans filed for first-time unemployment benefits last week, above the 359K that was expected. The prior week's reading was revised down by 1K to 375K. Continuing claims, meanwhile, ticked up 1K to 3.52M. The forecast called for a decline to 3.43M. The unexpected uptick in jobless claims comes as the economy is suffering thru a labor shortage as many workers would rather collect benefits that include an additional $300 weekly check. Others may be hesitant to return to work over fears of contracting COVID-19 or due to the need to provide childcare. The US economy has 7.6M fewer workers than before the pandemic. 26 states have already ended or announced plans to end the supplemental benefits in an attempt to lure laborers back to work. Federal Reserve Chair Jerome Powell said he was confident the labor market was "on a path" to a very strong recovery.
Jobless claims unexpectedly climb off pandemic low
Ford (F) said its adjusted pretax earnings forQ2
will “surpass its expectations” & be significantly better than a year
earlier, while net income will be “substantially lower” than the same
period last year. The company released the broad guidance ahead of
a presentation later today. “The improvement in automotive is being driven by lower-than-anticipated costs and favorable market factors,” the company said. “Additionally, higher vehicle auction values are benefiting Ford Credit.” Ford said that the automaker is
seeing improvement in its automotive business since providing full-year
operating guidance on Apr 28, despite continuing uncertainty about
supplies of semiconductor chips, which are used in infotainment &
other systems needed to build cars. Ford previously said it
expected to lose about 50% of its planned Q2 production due
to the shortage, up from 17% in Q1. Its Apr forecast was for full-year adjusted pretax profit to be $5.5-6.5B, including an adverse effect of about $2.5B from the semiconductor issue. Adjusted free cash flow for the
full year was projected to be $500M-1.5B. The stock was down a dime.
If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F?a_aid=CD3289&a_bid=6ae5b6f7
Ford says second-quarter earnings will ‘surpass expectations’
Federal Reserve Chair Jerome Powell maintained that a recent surge in consumer prices is likely transitory – but warned the increase may ultimately be "higher and more persistent" than expected. "As the reopening continues, shifts in demand can be large and rapid and bottlenecks, hiring difficulties and other constraints could continue to limit how quickly supply can adjust, raising the possibility that inflation could turn out to be higher and more persistent than we expect," Powell said following the central bank's 2-day policy-setting meeting. Updated economic projections released by the Fed show that officials dialed up their inflation expectations for the year, raising the headline forecast to 3.4% for 2021 – a full point higher than the Mar estimate. Longer-term projections show that policymakers expect inflation to settle around 2% in the future. Fed policymakers also penciled in an earlier-than-expected interest rate hike. Forecasts show that a majority of officials are anticipating at least 2 rate hikes in 2023, sooner than they anticipated in Mar. At the time, the median official did not expect to move rates until 2024. Officials also discussed an eventual tapering of the central bank's bond-buying program, although Powell gave no indication of when that may occur. He said the Fed would give markets plenty of advance notice before it begins to withdraw the monetary support that began last year. "I expect that we'll be able to say more about timing as we see more data, basically," he said. "There's not a lot more light I can shed on that." Yesterday officials voted unanimously to hold the benchmark federal funds rate at a range of 0%-0.25%, where it has been since Mar 2020, when COVID-19 forced an unprecedented shutdown of the nation's economy. The Fed will also keep purchasing $120B in bonds each month, a policy known as "quantitative easing" that's designed to keep credit cheap. The Fed reiterated that it expects to continue bond purchases until "substantial further progress" has been made in the recovery.
Powell predicts consumer price surge likely 'transitory,' says could be higher
The Fed spoke & investors listened. Now they are weighing the comments. Gold's decline today indicates all thoughts are not encouraging. Meanwhile, NAZ, with tech stocks, is near record highs,
Dow Jones Industrials
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