Dow dropped 33 (off session lows), decliners over advancers about 4-3 & NAZ went up 128 to another record. The MLP index fell 2+ to 188 & the REIT index retreated 5+ to the 478s. Junk bond funds inched higher & Treasuries remained in demand. Oil was off 2 to the 78s & gold rose 29 to 1793 (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)
The US trade deficit hit a fresh record of $81B in Sep, driven by a surge in imported goods that far outpaced exports, gov data showed. The Commerce Dept said that the gap between what the US buys from other countries & what it sells to foreign nations surged by 11.2%, topping the previous record of $73B in Jun. In Sep, exports plummeted 3% to $208B as supply chain disruptions caused congestion in ports & warehouses. Exports may have been lower than usual because of a 15.5% drop in petroleum exports related to refinery shutdowns caused by Hurricane Ida in Sep. That trend is expected to reverse itself in coming months as petroleum production returns to its normal levels. Imports, meanwhile, rose 0.6% to $288B, the highest monthly total on record as Americans bought more foreign-made goods like computers, electrical equipment, cellphones & industrial supplies. The overall trade deficit thru Sep surged to $639B, a 33.1% increase compared to the year-ago period. The surge reflects pent-up consumer demand for goods after the coronavirus pandemic forced large swaths of the economy to shut down last year. The US deficit with China hit $36.5B in Sep – a 15% increase from the previous month. Over the first 9 months of the year, America's deficit with China totaled $255B, an increase of 14.9% from the same period last year. Experts say that as COVID-19 cases continue to fall & supply-chain disruptions begin to abate, the US trade deficit should begin to improve – though it may remain elevated thru the end of the year.
US trade deficit jumps to fresh record in September as exports plunge
Fox Corp (FOX), parent of Fox News & the Fox broadcast network, reported
higher revenue in the latest qtr, as more original entertainment
programming, live sports & growth at its streaming platforms boosted advertising sales. Revenue rose 12% to $3.05B. The forecast was expecting $2.94B. This is the "healthiest ad market we have seen in some time," CEO Lachlan Murdoch said. FOX attracted more advertisers seeking to get in front of viewers for
the live fall sports season, as well as its ability to promote ads
across its various platforms. Advertising
revenues increased 17% over last year. The cable programming unit, which includes the Fox Business Network & Fox Sports 1 channel as well as Fox News, pulled in $1.4B in
revenue, up nearly 7% from last year. The easing of
COVID-19 restrictions allowed for more sports. Fox also got a boost from pay-per-view boxing. EPA decreased to
$1.21, from $1.83 in the year-earlier period. The decline was attributed to
the absence of a $462M gain from Walt Disney (DIS), a Dow stock, related to tax liabilities from its sale of 21st Century Fox assets. Adjusted EPS was $1.11 a share, ahead of expectations for $1.01 a share. The stock slid back 21¢.
If you would like to learn more about FOX, click on this link:
club.ino.com/trend/analysis/stock/FOX?a_aid=CD3289&a_bid=6ae5b6f7
Fox's revenue rises amid increased advertising sales
Qualcomm (QUAL) reported fiscal 4th-qtr earnings that beat expectations. Earnings showed the company has weathered the global chip shortage well. The forecast called for adjusted EPS of $2.26 & revenue of $8.86B. Qualcomm reported $2.55 EPS, adjusted, &
revenue of $9.3B. Its chip business generated $7.7B in
revenue, up 56% year over year, on demand for new phones. “Supply worked exactly as we planned,” CEO Cristiano Amon said. “Scale helps, we addressed the issue early … we put
capacity plans in place and it’s working exactly as we planned.” Amon
said the company is prioritizing supply where it gets the most return,
adding that the “handset business is on fire” because of demand for
devices that run on new & faster 5G networks. “The reality is if
we look at where we are today, we had a great Q4 quarter but we’re
still short,” Amon said. “We’re going to see supply substantially
improving at the end of the calendar year as well as when we get into
2022 but there’s more demand than supply.” “As we look into Q1 we could grow more, especially in new revenue streams and growth areas outside handsets,” he explained. The stock shot up 17.63 (13%).
If you would like to learn more about QUAL, click on this link:
club.ino.com/trend/analysis/stock/QUAL?a_aid=CD3289&a_bid=6ae5b6f7
Qualcomm shares jump after company reports strong earnings during chip shortage
Gold futures finished higher, after spending much of the session seesawing between gains & losses, as investors weighed a drop in weekly US jobless claims to their lowest since the pandemic began & news that the ECB will slow asset purchases. The $ saw relatively steady trading and Treasury yields weakened after the ECB Pres Christine Lagarde said that a decision to slow the pace of asset buying under the ECB's pandemic emergency program didn't amount to “tapering.” She added the central bank was merely re-calibrating the its stimulus efforts. The ECB said “the Governing Council judges that favorable financing conditions can be maintained with a moderately lower pace of net asset purchases under the PEPP than in the previous two quarters.” Dec gold tacked on $6 (0.4%) to settle at $1800 an ounce, following declines in each of the 2 previous sessions. The yellow metal scored a slight haven bid late yesterday after the release of the Federal Reserve's Beige Book indicated that economic growth was slowing amid the spread of the delta variant of COVID-19. Employment data has become a key measure of investors bets on the pace of the US's recovery from the COVID pandemic, with the Fed setting the stage for the eventual reduction of accommodative measures that were put in place to provide much-needed liquidity to financial markets at the height of the distress caused by the deadly pathogen. However, those measures are viewed by a number of Fed officials as no longer needed. Even so, Atlanta Fed Pres Raphael Bostic said that it's not likely the central bank will announce a decision to taper at its meeting this month.
Gold prices finish higher as Treasury yields slip after Fed decision
Oil futures ended a volatile trading session at the lowest prices since early Oct after OPEC & its allies resisted pressure from the Biden administration & decided to keep their crude production increases in place. The group of producers, known as OPEC+, reaffirmed its previous decision on production levels at a meeting & said it will raise the monthly overall production by 400K barrels per day in Dec. West Texas Intermediate crude for Dec declined by $2.05 (2.5%) to settle at $78.81 a barrel. Front-month contract prices marked their lowest finish since Oct 7. Jan Brent crude, the global benchmark, fell $1.45 (1.8%) to settle at $80.54 a barrel, the lowest since Oct 1. At a meeting in early Oct, OPEC+ kept the agreement reached in Jul to gradually raise monthly oil production by 400K barrels a day from Aug. The goal of the deal is to eventually phase out the remaining production cuts put in place last year in response to the pandemic. The Oct decision included a 400K barrels-per-day increase in Nov. But the upside for oil prices could be limited by the prospect that the US & other consumers could tap strategic oil reserves. The US Strategic Petroleum Reserve was holding 612.5M barrels of crude oil, according to the weekly Energy Information Administration report, while China has the 2nd most crude in its reserve, with Japan & South Korea rounding out the top 4. OPEC+ will hold its next ministerial meeting on Dec 2.
Investors have a lot to think about on the tapering processes by the Fed. Stocks, gold & oil had a wild time today. Tomorrow brings the Oct jobs report which should be the main driver for stocks.
Dow Jones Industrials
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