Dow was up 53, decliners over advancers 2-1 & NAZ dropped 101. The MLP index fell 3+ to the 184s & the REIT index crawled up 1 to the 462s. Junk bond funds fluctuated & Treasuries were sold, taking the yield on the 10 year Treasury down over 5 basis points to 1.3% (a 5 month low). Oil sank 1+ to the 71s & gold added 4 to 1829 (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)
Delta Air Lines (DAL) Q2 revenue that topped estimates & said leisure & business travel bookings rose sharply after more
than a year of pandemic lockdowns. The airline posted a profit of $652M, snapping a 5-qtr streak of losses, thanks to federal coronavirus aid that offset some of its costs. It expects to be profitable for H2 without the benefit of the gov aid. While
still hamstrung by weak international air travel, revenue will continue
to improve compared with recent months. For Q3, DAL said it expects revenue will be down 30-35% over 2019, when it brought in $12.6B. Domestic leisure travel has completely recovered & that
business travel demand was also recovering. Average daily net cash sales
— tickets purchased minus refunds — doubled over Q1 &
were 20% higher than its initial forecast. It's a sharp turnaround, which reported a record loss of $12.4B last year. Other airlines have also become more upbeat. DAL said last month it will ramp up hiring of more than 1000 reservation agents & plans to hire about 1000 pilots over the next year. Fuel costs have also increased to the highest levels since early 2020. EPS was a loss of $1.07
versus an expected loss of $1.38 a share. The figure strips out $1.5B in federal payroll & other adjustments. Revenue
for Q2 came in at $7.1B, down 43%
from the $12.5B it generated during the same period in 2019 but
more than the $6.2B that was expected. “Looking forward,
we are harnessing the power of our differentiated brand and resilient
competitive advantages to drive towards sustainable profitability in the
second half of 2021 and enable long-term value creation,” CEO Ed
Bastian said. The stock rose 70¢.
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 reports first profit since 2019 thanks to federal aid, improving revenue as travelers
An economic rebound, rising wages & declining unemployment claims weren't enough to spare Federal Reserve Chair Jerome Powell from gripes in the Senate. During testimony before the Senate Banking Committee, Dems grilled Powell over the central bank's support for climate change initiatives & its rollback of financial protections, while Reps questioned the Trump nominee on his commitment to controlling inflation. “Big banks rake in cash – and they spend it on executive compensation and dividends and buybacks, instead of lending in communities or increasing capital to reduce risk,” said committee chairman Sen Sherrod Brown. “The Fed should be fighting this trend, protecting our progress from Wall Street greed and recklessness – not making it worse.” Ranking Member Sen Pat Toomey offered criticism for what he views as the Fed's inaction on inflation. “The Fed’s policy is especially troubling because the warning siren for problematic inflation is getting louder. Inflation is here, and it’s more severe than most — including the Fed itself — expected,” he said. “Since the Fed has proven unable to forecast the level of inflation, why should we be confident that the Fed can forecast the duration of inflation?” The barbs from both sides of the aisle may feel unfamiliar to Powell, who has otherwise received praise from lawmakers for acting quickly to flush the economy with cash as the Covid-19 pandemic forced thousands of businesses to close. The recent criticism of the Fed & its leader may have less to do with economics & more to do with political posturing. With members of both parties seeking an early edge in the key 2022 midterm elections, Powell may find himself with fewer public allies in Congress.
Powell grilled by grouchy senators over inflation and climate change, even as economy rebounds
Gold futures recovered early losses to stretch their streak of gains to a 3rd session in a row, settling at a nearly one-month high. Investors looked to the latest US economic data &l Federal Reserve Chair Jerome Powell's congressional testimony to help gauge the next direction for the metal's prices, but appeared to find little reason to make any big moves. Aug gold edged up by $4 to settle at $1829 an ounce, marking another finish at the highest since Jun 16, based on the most-active contract. Prices posted a gain for 3rd-straight session. Powell, in front of the House Financial Services Committee yesterday, said that removing some of the Fed's stimulus was some way off as the labor market struggles to rebound from the pandemic. The central bank chief also described inflation as a short-lived phenomenon that would eventually revert to the mean after a COVID-fueled surge that has been stoked by supply shortages amid spiking demand. His testimony before the Senate Banking committee today offered a similar message. Economic reports today offered a mixed picture of the US recovery from the COVID pandemic. US initial jobless benefit claims fell to 360K from 386K last week. The US import price index climbed 1% in Jun & prices minus volatile fuel rose 0.7% on the month. Meanwhile, the Philadelphia Manufacturing Index fell to 21.9 from 30.7, while the Empire State manufacturing index rose to a record 43 in Jul from 17.4 in the prior month.
Gold futures settle higher for a third session in a row
Oil futures fell, dragging US prices down to their lowest finish in nearly a month, a day after data showed a rise in US fuel supplies, adding to concerns about supplies following reports that the UAE & Saudi Arabia reached a compromise that would allow a further relaxation of output curbs beginning next month. Worries that the spread of the delta coronavirus variant have also contributed to weakness in oil prices as the variant is leading to renewed lockdowns in some countries, particularly in Asia, dulling demand for energy. Crude fell sharply yesterday after reports said the UAE & Saudi Arabia had reached a compromise in their dispute over output cuts. The UAE, however, has said no deal has been reached with OPEC+ producers & that talks are ongoing & would need the support of other OPEC members. A meeting of OPEC & its allies (OPEC+) ended earlier this month without an agreement on a proposed easing of output curbs after the UAE insisted it should be allowed to raise the baseline dictating its output, putting it at odds with Saudi Arabia. In its monthly report, OPEC said there are “solid expectations” for global economic growth in 2022, with improved containment of COVID-19, particularly in emerging & developing countries, expected to allow oil demand to return to pre-pandemic levels next year. World oil demand is seen up 3.3M barrels a day year-over-year in 2022, for average demand of 99.9M barrels a day. Demand is forecast to top the 100-M-barrel-a-day threshold in H2-2022. OPEC shaved its 2021 forecast for non-OPEC liquids supply by 30K barrels a day, despite upward revisions to the US & Canada, & now sees growth at 81K barrels a day for an average of 63.8M barrels a day.
U.S. oil prices end near 1-month low on OPEC compromise expectations, COVID concerns
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