Dow declined 164, decliners over advancers better than 2-1 & NAZ sank 209. The MLP index fell 2+ to the 184s & the REIT index gained 1+ to the 464s. Junk bond funds did little & Treasuries were being purchased. Oil was even in the high 71s & gold was off 3 to 1791.
AMJ (Alerian MLP index tracking fund)
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Lockheed Martin (LMT) said its space business boosted revenues in the latest
qtr, but a classified aeronautics development program caused the
company to miss the profit estimate. Q2 earnings report comes a year after the
global pandemic first hit the defense industry & its supply chain,
causing shutdowns, shortages & months of delays. LMT increased its guidance for full-year EPS. Quarterly sales at Lockheed's largest unit, aeronautics - which makes the F-35 fighter jet, rose 2.5% to $6.6B. But
"performance issues" at aeronautics in the qtr led to a loss of
$225M on "a highly classified program that Lockheed Martin has
been working on for a couple of years," Ken Possenriede CFO said The forecast the company to report quarterly EPS of $6.53. In
its sales outlook for the year, the company trimmed the aeronautics
segment by $175B, but increased its outlook for sales by the same
figure across the Rotary & Mission Systems unit & Space unit. The
space unit saw its profits in the qtr increase to $335M, a
jump of 33%, due to progress on space based sensor platforms & its
United Launch Alliance investment. Q2 revenue was
$17BB comparable to the estimate of $16.9B. The stock rose 5.85.
If you would like to learn more about LMT, click on this link:
club.ino.com/trend/analysis/stock/LMT?a_aid=CD3289&a_bid=6ae5b6f7
Lockheed second quarter profit misses even as space business boosts sales
The IMF warned that there's a risk inflation will prove to be more than just transitory, pushing central banks to take pre-emptive action. The issue is currently dividing the investment community, which has been busy contemplating whether a recent surge in consumer prices is here to stay. In the US, the consumer price index came in at 5.4% in Jun — the fastest pace in 13 years. In the UK, the inflation rate reached 2.5% in Jun — the highest level since 2018 & above the Bank of England's target of 2%. For the most part, the Washington-based institution sees these price pressures as transitory. “Inflation is expected to return to its pre-pandemic ranges in most countries in 2022,” the Fund said in its latest World Economic Outlook update. However, it warned that “uncertainty remains high.” “There is however a risk that transitory pressures could become more persistent and central banks may need to take preemptive action,” the IMF added. Higher prices increase the chances that central banks will start to curb their ultra-accommodative monetary policies, such as a tapering of market-friendly stimulus like asset purchases. Speaking earlier this month, Federal Reserve Chair Jerome Powell said the jobs market was “still a ways off” from where the central bank would like to see it before it reduces stimulus. He added that inflation would “likely remain elevated in coming months before moderating.”
IMF warns inflation could prove to be persistent and central banks may need to act
Home prices continue to break records, as strong demand slams up against weak supply. Nationally, home prices were 16.6% higher than in May 2020, the highest reading in the S&P CoreLogic Case-Shiller report's 30-plus years. In Apr it rose 14.8% year over year. The 10-city composite annual increase was 16.4% in May versus 14.5% in Apr. The 20-city composite gained 17% year over year, up from 15% the month before. All 20 cities reported higher price increases in the year ending May 2021 versus the year ending Apr 2021. Phoenix, San Diego & Seattle reported the highest year-over-year gains among the 20 cities in May. “A month ago, I described April’s performance as ‘truly extraordinary,’ and this month I find myself running out of superlatives,” said Craig Lazzara, managing director & global head of index investment strategy at S&P DJI. “We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the Covid pandemic, as potential buyers move from urban apartments to suburban homes. May’s data continue to be consistent with this hypothesis.” Mortgage rates fell slightly to start May & held within a narrow range throughout the month. Rates have been so low for so long that even slight monthly moves higher have done nothing to take the heat out of home prices. Sales of new & existing homes have weakened in the past few months, largely due to sky-high prices. The inventory of homes for sale has finally started to increase, albeit slowly. An increase in listings is the only thing at this point that could pull price gains back a bit. Demand is still strong due to simple demographics of the largest generation, millennials, moving into its homebuying years. Mortgage rates have also been falling again in the past few weeks.
Home prices broke records in May, according to S&P Case-Shiller
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