Dow pulled back 66, decliners over advancers 2-1 & NAZ went up 41. The MLP index fell 1 to the 193s & the REIT index was off 2+ to the 461s. Junk bond funds inched higher & Treasuries found a little bit of buying. Oil was off fractionally to the high 73s & gold added 6 to 1811.
AMJ (Alerian MLP index tracking fund)
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US consumer prices rose last month at the fastest pace since 2008. The Labor Dept said that the consumer price index rose 0.9% in Jun, faster than the 0.6% increase in May. The forecast was expecting a 0.5% gain. Used car prices spiked 10.5% last month, accounting for more than 1/3 of the increase. Additionally, energy prices climbed 1.5% month over month & food prices rose 0.8%. Prices rose 5.4% year over year & have been trending higher every month this year. The forecast called for prices to rise 4.9% annually. The annual data has a "base effects" skew due to the decline in prices that occurred at the start of the pandemic. Core prices, which exclude food & energy, rose 0.9% in Jun, quicker than the 0.7% increase recorded in May. The 4.5% annual increase was the most since 1991. Higher prices seeped into large swaths of the economy as businesses have struggled to correct supply-chain bottlenecks that occurred as a result of the pandemic. Some businesses are also struggling to find workers as supplemental unemployment benefits have encouraged workers to stay home
Consumer prices surge by most since August 2008
JPMorgan Chase (JPM), a Dow stock, Q2 profit soared compared with a year ago, when the bank was stockpiling funds to prepare for a painful recession. The nation's biggest bank
posted EPS of $3.78, compared with
$1.38 a year ago. That beat the expectations of $3.20. Yet
revenue fell 8% to $30.5B from $33.1B a year ago, the
result of depressed lending margins & lower trading revenue. The forecast
had expected $29.9B in revenue. The
divergence between profit & revenue is largely due to the
extraordinary conditions of Q2 last year, when the
coronavirus pandemic appeared poised to decimate the economy. Then, JPM set aside $10.5B
to prepare for a wave of loan defaults. This qtr, the bank
continued to free up pandemic loan-loss reserves, releasing another $3B & boosting its bottom line. Q2 will likely prove to be an in-between period for big
banks. Businesses that boomed throughout the pandemic,
especially trading & investment banking, are slowing down from record paces. Corp clients that last year nervously rushed to raise money are now flush with cash. Last year's market chaos, which can be ideal for trading, has quieted now that the US has gotten the pandemic under control. Revenue fell 19% in the corp & investment bank & was up 3% in its consumer bank. Loan balances grew 3% but with interest rates still near zero, the bank's lending profits fell again. The stock dropped 3.56.
If you would like to learn more about JPM, click on this link:
club.ino.com/trend/analysis/stock/JPM?a_aid=CD3289&a_bid=6ae5b6f7
JPMorgan profit more than doubles, but revenue falls
Europe is struggling to contain a surge in Covid-19 cases caused by the delta variant, but while several countries reimpose measures to control the spread, the UK is taking the plunge & lifting restrictions. From residual vaccine skepticism in some countries, to surges in infections linked to nightlife resuming, Europe is having to contend with competing needs: the reopening of crucial economic sectors this summer, while at the same time, curbing surging cases. It’s not an easy balance to strike &, erring on the side of caution, a number of countries – including France, the Netherlands, Greece & Spain – announced new restrictions yesterday in a bid to curb the rise in infections, particularly among younger people who are the last in the queue to be vaccinated against Covid. Danny Altmann, professor of immunology at Imperial College London, said that the divergent approaches showed just how nuanced the issue was. ″[It illustrates] how difficult it is and hard for any policy makers and scientists to make assertions against such a formidable and unpredictable foe,” he said. “We make predictions at our peril.”
Europe struggles to break free of Covid restrictions as delta variant surges
Dow Jones Industrials
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