Dow climbed 216 (with buyinjg in the last hour), decliners over advancers 5-4 & NAZ added 940. The MLP index did little in the 174s & the REIT index marked time in the 484s. Junk bond funds inched higher & Treasuries saw limited buying, with the yield on the 10 year Treasury near 1.5%. Oil rose about 1 to the 71s & gold went up 5 to 1782 (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)
In the coming week, the Federal Reserve could decide to speed up the end of its bond-buying program & signal that 2022 is the year it expects to start hiking interest rates. That is already widely anticipated by investors, ahead of the Fed's meeting Tues & Wed. Strategists don't expect much market reaction, unless the central bank's messaging includes a surprise or its forecast for interest rate hikes is more aggressive than expected. On Nov 30, Federal Reserve Chair Jerome Powell tipped the warning that the central bank would discuss speeding the taper of its $120B monthly bond purchases at the upcoming meeting. His comments followed a parade of Fed speakers, who all suggested the central bank could end the program sooner than the current timeline of Jun 2022. In the past week, stocks resumed their climb back toward highs after it became clear the omicron variant of Covid is unlikely to cause a shutdown of the economy. Pfizer (PFE) & BioNTech (BNTX) also gave investors some encouragement when announcing that a study found 3 doses of their vaccine provides a high level of protection against the variant. Investors largely shook off Nov's inflation print in which the consumer price index gained 0.8% for the month & 6.8% over the previous year — the highest rate since 1982. The core CPI, which excludes food & energy prices, climbed 0.5% for the month & gained 4.9% from a year ago — the sharpest increase since 1991. Bond yields rose during the week, but the 10-YearTreasury yield traded at about 1.47% today. The bond-buying program (quantitative easing) was put in place in early 2020 to help the economy & financial markets combat the impact of the pandemic. The Fed also had quickly slashed its fed funds target rate to zero. In its last forecast, the Fed's dot-plot chart of inflation forecasts shows that ½ the Fed officials expected one or 2 rate hikes next year with no consensus for a hike. The first hikes were in 2023. That is likely to change in the updated forecast, with possibly 2 hikes penciled in for next year. Powell also acknowledged that inflation could be more of a problem than the central bank thought & that it was time to retire the description of inflation as “transitory,” or temporary. Indeed, the consumer price index for Nov surged to its fastest rate in nearly 40 years.
Fed is expected to speed up end of bond buying and signal interest rate hikes are coming
Enterprise software maker Oracle (ORCL) forecast current-qtr profit & revenue above market estimates after posting upbeat results for Q2, helped by
higher tech spending from businesses looking to support hybrid work. As
the pandemic pushed more companies to shift to a hybrid work model,
spending on cloud technology has risen, benefiting ORCL & other
firms. Revenue at its cloud services & license support unit, its largest, rose
to $7.55B from $7.1B a year
earlier. This is expected to grow 6-8% in Q3. The company has been ramping up investments
in data centers worldwide, especially in gov-focused ones, CEO
Safra Catz said. The company expects current-qtr EPS of $1.19-1.23, higher than the estimate of $1.16. It expects revenue of $10.7-10.9B, above estimates of $10.56B. ORCL made a payment for a judgment related to a dispute
regarding former CEO Mark Hurd's employment, that resulted in a
Q3 loss of $1.25B versus a profit of $2.44B a
year earlier. On
an adjusted basis, the company had EPS of $1.21 on revenue of
$10.36B. The forecast expected EPS of $1.11 on
revenue of $10.21B. The stock jumped 13.83 (15%).
If you would like to learn more about ORCL, click on this link:
club.ino.com/trend/analysis/stock/ORCL?a_aid=CD3289&a_bid=6ae5b6f7
Oracle forecasts upbeat third quarter as IT spending rebounds
Shares of Everbridge (EVBG) lost almost ½ their value today after the software company said CEO David Meredith resigned effective immediately. EVBG, whose technology helps companies manage public safety emergencies, saw its stock price rocket during the early months of the Covid-19 pandemic as cities across the
country deployed its software to get notifications out to the public. Investor
sentiment turned dramatically in Nov, as the stock plunged 29% for
the month. The drop started after the earnings report on Nov
9. Despite reporting better-than-expected sales for Q3 & issuing an
optimistic revenue outlook, the shares fell for 10 more consecutive days. Still, Meredith's sudden departure comes as a shock & without explanation. “Mr.
Meredith’s resignation is not related to any matter regarding the
Company’s financial condition, reported financial results, internal
controls or disclosure controls and procedures,” EVBG said after the close of regular trading yesterday. CFO Patrick Brickley & Chief
Revenue Officer Vernon Irvin will become interim co-CEOs “to assume
strategic and operational control of the business.” The company said it
has begun a search for a permanent CEO “and will consider both internal
and external candidates.” EVBG reiterated its guidance for Q4 & said it
anticipates revenue growth of 20-23% in 2022. That's lower than the
24% growth expected. The stock plummeted 52.37 (45%).
If you would like to learn more about EVBG, click on this link:
club.ino.com/trend/analysis/stock/EVBG?a_aid=CD3289&a_bid=6ae5b6f7
Everbridge plunges by almost 50% after CEO resigns from software company
Gold prices turned higher after the US gov reported that the rate of consumer inflation hit the the highest level in nearly 40 years. Data revealed that the US cost of living climbed in Nov & drove the rate of inflation to a nearly 40-year of 6.8%. The consumer price index increased 0.8% last month, more than the 0.7% advance expected. Feb gold climbed by $8 (0.5%) to settle at $1784 an ounce. Prices settled slightly above the most-active contract's week-ago finish of $1783. The $ edged down by 0.2% to 96.054, as measured by the ICE US Dollar Index, a gauge of the buck against a ½-dozen rivals, on track to end less than 0.1% lower for the week. The yield on the 10-year Treasury note fell to 1.477%, from 1.486% yesterday.
Gold prices end higher as U.S. inflation rate climbs to a nearly 4 decade high
Oil futures climbed, to score their strongest weekly gain in over 3 months, as the market continues recover from fears of demand shocks due to the omicron variant of COVID. West Texas Intermediate (WTI) crude for Jan delivery rose 39¢ (0.6%), to reach $71.33 a barrel after shedding 2% a day ago. Feb Brent added 39¢ (0.5%) to $74.81 a barrel yesterday. For the week, WTI, the US benchmark, was up nearly 8%, which represents the sharpest weekly gain since a 10% rise in the period ended Aug 27. Brent, the intl contract, meanwhile, has climbed 7% based on the front-month contract values from last Fri, also its steepest weekly advance since late Aug. A move higher for the week for both WTI & Brent follows 6-consecutive weekly losses. Meanwhile, negotiators are in Vienna this week as Iran holds talks with world powers in an effort to revive the 2015 nuclear deal. Senior US officials have said the Biden administration is moving to tighten enforcement of sanctions against Iran as diplomatic efforts to restore the deal falter. Oil prices, overall, have been buffeted by concerns about demand due to the spread of the new omicron variant of COVID since the end of Nov, with restrictions imposed again on consumer activity in parts of the world including the UK.
Oil futures score best weekly gain since August
The Dow recovered 1400 this week after all the selling in the prior week. Another way to look at it is the Dow is up 150 since the end of Oct. Oil saw buying, up 5 from its depressed lows 1 week ago. The Producer Price Index will be reported next week & the Fed has its big meeting at mid week to decide on what it will do with interest rates. Dec is shaping up as a highly volatile week.
Dow Jones Industrials
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