Dow rose 64, advancers over decliners 3-2 & NAZ jumped 136. The MLP index continued even, near 198, & the REIT index was flattish in the 474s. Junk bond funds remained weak & Treasuries saw a little buying. Oil slid back chump change in the 84s & gold shot up 12 to 1806 (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)
Kimberly-Clark Corp.(KMB), a Dividend Aristocrat, is planning to raise prices for the 2nd time
this year in order to mitigate headwinds caused by "significant
inflation," the company said. Management expects key input costs to rise by $1.4-1.5B in the current fiscal year, above the previous estimate calling
for an increase of up to $1.3B. "We expect to fully offset inflation with both pricing and cost
reductions," said CEO Michael Hsu. "Margin improvement is a fundamental pillar of
what we need to do for the company." The consumer products maker has over the past year dealt with higher input,
freight & labor costs which have squeezed margins. Profit margins fell to 29.6% in the qtr, down from 33% the year
prior. Inflation concerns caused the company to lower its full-year outlook for the 2nd time in 3 months. Management
forecasts organic sales will decline 1-2% this year & adjusted EPS will be $6.05-6.25. In
July, KMB cut its outlook for organic sales to decline 0-2% & adjusted EPS of $6.65-6.90. The company had expected commodity prices to ease in H2, but instead, they were "far in excess" of what the company had
expected, according to CFO Maria Henry. KMB now expects costs to continue to rise & to stabilize at
higher levels. This is as a tight labor market & supply chain
disruptions have made it more difficult to get products on the shelves & as energy prices have risen sharply. Higher costs weighed on EPS which was $1.62. Revenue
jumped 7% year over year $5.01B. The forecast was expecting adjusted EPS of $1.65 & revenue of $4.99B. The stock was off 2.99.
If you would like to learn more about KMB, click on this link:
club.ino.com/trend/analysis/stock/KMB?a_aid=CD3289&a_bid=6ae5b6f7
Kimberly-Clark planning further price increases to mitigate inflationary pressures
Senate Dems are crafting a plan to tax billionaires & other ultra-high earners in order to pay for the bulk of Ores Biden's signature economic spending plan after failing to secure enough support for a slew of other planned tax increases. Senate Finance Chair Ron Wyden is slated to unveil a tax on the unrealized capital gains of the ultra-wealthy this week, Treasury Secretary Janet Yellen said. The proposal, which has support from other Dems, would set the so-called billionaires' income tax at $1B income, or 3 consecutive years of $100M or more in income. "I wouldn’t call that a wealth tax, but it would help get at capital gains, which are an extraordinarily large part of the incomes of the wealthiest individuals and right now escape taxation until they’re realized," Yellen added. Dems hope to generate at least $200B in new revenue over the next decade from the tax, which would include stocks as well as other assets like real estate. Individuals could claim deductions for annual losses in the value of their assets. It would affect roughly 700 taxpayers, the richest Americans. "Raising the rate is not going to cause Jeff Bezos to pay a penny more," Sen Elizabeth Warren. Warren has pushed for a tax on the wealthiest Americans for years, rolling out a far more expansive plan during her 2020 presidential campaign. "What we need is a tax that focuses on the wealth of the richest Americans." Still, it's unclear whether the tax, which would be the first of its size & scope in an advanced economy, will be backed by every Senate Dem & nearly every House Dem — the required threshold for its passage. Senior Biden officials & other top Dems have expressed cautious optimism that moderate lawmakers like Sen Kyrsten Sinema is expected to support the effort.
Dems' big plan to fund Biden's massive spending agenda: How it would work
Federal Reserve officials are poised to start slowing their aggressive bond-buying program in Nov, the first step that policymakers will take in dialing back pandemic-era support for the US economy. Fed Chair Jerome Powell & other top policymakers have indicated over the course of the past month that they are preparing to start reducing the $120B in monthly purchases, a policy known as "quantitative easing" that's designed to keep credit cheap. Reducing bond purchases will be the first step the Fed takes in returning to a more normal policy setting. "I do think it’s time to taper, and I don’t think it’s time to raise rates," Powell said last week. Minutes from the central bank's Sep meeting revealed that most policymakers agreed they could begin tapering asset purchases as soon as mid-Nov, with plans to conclude the reduction by Jul – about one or 2 months earlier than previously expected. That would mean the Fed would reduce assets by about $15B per month. "Participants generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around the middle of next year would likely be appropriate," the minutes said. "Participants noted that if a decision to begin tapering purchases occurred at the next meeting, the process of tapering could commence with the monthly purchase calendars beginning in either mid-November or mid-December."
Fed prepares to begin tapering asset purchases as inflation surges
Gold futures climbed above $1800 an ounce, with concerns surrounding rising inflation helping prices mark their highest finish in more than 6 weeks. Dec gold climbed $10 (0.6%) to settle at $1806 an ounce, with prices for the most active contract ending at their highest since Sep 14. Gold scored a 1.6% weekly climb on Fri, marking the 4rth weekly advance in 5 weeks. Data had the sharpest such rise for a most-active contract since the period ended Aug 27. Gold also posted a climb for Fri's trading session, though ended below the day's best levels, after remarks from Fed Chair Jerome Powell raised the likelihood that the central bank will soon start to slow, or taper, its monthly bond purchases. The yellow metal climbed today, supported in part by a pull back in Treasury yields from multimonth highs, though bullishness appeared capped by a modest rise in the $. Still, gold bulls make the case that the $ has been tracking lower in recent days after hitting a peak earlier this month, paving the way for $-pegged assets to advance. The $, as measured by the ICE U.S. Dollar index, was up 0.2% today, but traded around 0.4% lower for the month.
Gold futures top $1,800 to post highest finish in nearly 6 weeks
Natural-gas futures rallied to mark their highest
settlement in almost 3 weeks, with forecasts for colder weather
lifting prices for the heating fuel by nearly 12% for the session. Oil
futures, meanwhile, finished on a mixed note, with US prices flat &
global prices up for the session, as investors focused on tight supply & comments from oil producers in Saudi Arabia & Russia. Nov
natural gas which expires at the end of Wed's trading session,
climbed 62¢ (11.7%) to settle at $5.898 per M British
thermal units. That was the highest finish for a front-month contract
since Oct 5. Last week, NOAA also released its 2021-22 Winter Outlook, predicting a La Niña event for a 2nd year in a row. US & global benchmark crude futures split paths, with US prices
trading higher for much of the session, then moving lower — only to
finish flat. West Texas Intermediate (WTI) crude for Dec settled
unchanged at $83.76 a barrel after
touching a high of $85.41. Based on the front-month contracts, prices
touched their highest intraday level since 2014. WTI has seen 9 consecutive weekly gains, based on front-month contracts — the
longest streak ever for front-month contracts, going
back to 1983. Dec Brent
crude, the global benchmark, rose 46¢ (0.5%) to settle at
$85.99 a barrel. Jan Brent the most
actively traded contract, climbed 53¢ (0.6%) at $85.17 a barrel. WTI prices briefly turned lower today as traders weighed comments Alexander Novak, Russia's deputy prime minister. He said that OPEC &
allies will agree to raise production by 400K barrels a day at their
meeting on Nov 4. The move would be in line with a previous agreement
set by the group of producers, known as OPEC+. Remarks over the weekend by Saudi Arabia's energy minister were taken
as a sign that OPEC+ has little appetite for further boosting output. The remarks by Prince Abdulaziz bin Salman underlined concerns the
COVID-19 impact could still undercut demand in the near term. “We are not yet out of the woods,” he said. “We need to be careful. The crisis is contained but is not necessarily over.”companies
Natural-gas futures surge 12%, as U.S. oil touches 7-year high before ending flat
Stock averages have been rising in the last week, but cautiously. There is no shortage of ugly news, starting with inflation, but it's not getting a lot attention. The KMB report above shows it is hurting companies & all consumers see it in stores. Sloppjng around massive sums of money in DC is another significant problem which must be monitored. Gold is being purchased by nervous investors again.
Dow Jones Industrials
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