Dow rose 71, but decliners over advancers about 2-1 & NAZ climbed 208. The MLP index fell 3+ to the 192s & the REIT index traded flattish, above 450. Junk bond funds fluctuated & Treasuries were bid higher. Oil gained 1 to the 87s & gold was off 11 to 1783.
AMJ (Alerian MLP index tracking fund)
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A key measure of annual inflation that is closely watched by the Federal Reserve is running at the hottest pace in nearly 4 decades as widespread supply disruptions, extraordinarily high consumer demand & worker shortages fuel rapidly rising prices. Prices soared by 5.8% in the year thru Dec, according to the personal consumption expenditures price index (PCE), beating out the previous month's increase of 5.7% to become the fastest inflation pace since 1982. In the one-month period between Nov & Dec, prices jumped 0.4% (0.5% when excluding food & energy costs). Excluding the more-volatile measurements of food & energy, prices rose 4.9% in Dec from the previous year – the highest since 1983. That measurement is the Fed's preferred gauge to track inflation; it marks the 9th consecutive month the measure has been above the central bank's target range of 2%. The inflation spike largely reflected surging energy costs, which rose 29.9% from a year ago & food costs, which were up 5.7% over that same time period. Services inflation rose by 4.2% in Dec & goods inflation increased 8.8% – up from the 8.5% pace a month prior. The PCE report was accompanied by data on household spending, which showed that consumer spending fell 0.6% last month, with purchases of cars, electronics & clothes declining. Higher prices may have deterred some households from shopping, along with a surge of the highly contagious omicron variant, which has elicited some fresh business restrictions. "We are attentive to the risks that persistent real wage growth in excess of productivity could put upward pressure on inflation," Fed Chair Jerome Powell said, suggesting the employment cost index had played a key role in the central bank's decision to begin tightening policy.
Key inflation gauge surges 5.8% in December, highest in four decades
The 10-year Treasury yield was little changed after the Federal Reserve's key inflation gauge rose at its fastest clip since 1983 in Dec. The yield on the benchmark 10-year Treasury note was less than a basis point lower to 1.803% & the yield on the 30-year Treasury bond rose 1.9 basis points to 2.11%. Yields move inversely to prices & 1 basis point is equal to 0.01%. Dec's personal consumption expenditures index, which is the Federal Reserve's primary inflation measure, increased 4.9% from a year ago, the Commerce Dept reported,s the biggest gain going back to 1983. The personal consumption expenditures price index excluding food & energy was slightly more than the 4.8% estimate & the monthly gain of 0.5% was in line with expectations. Investors will be watching the data closely, given that the Fed indicated after its latest policy meeting this week that it could start raising interest rates in Mar in an attempt to help curb inflation.
10-year Treasury yield is little changed as investors digest inflation gauge, Fed update
Chevron
(CVX), a Dow stock & Dividend Aristocrat, shares declined after the company reported a mixed qtr, despite surging oil & gas prices. EPS was $2.56 excluding items during the 4th qtr, while
the forecast was expecting $3.12. Revenue, however, came in at $48.1B, topping the
expected $45.6B. For the full year, CVX saw record free cash flow of $21.1B, while reducing debt by $13B. It earned
$15.6B for the year, compared to a loss of $5.5B in 2020. On
Wed, the company hiked its quarterly div by 8¢ (6%) to $1.42 per share. This was
the 35th straight year that the company has increased its payout. The company's cash flow from operations was $29.2B in 2021, more than double 2020's $10.6B. Q4 results compare to a loss of a penny per
share on an adjusted basis during the same qtr one year ago &
$25.2B in revenue. During the Q3-2021, EPS was $2.96 on an adjusted basis, with revenue coming in at $44.7B. Worldwide net oil-equivalent production fell about 5% year over
year during the fourth quarter to 3.12M barrels per day. The
company’s average sales price per barrel of crude oil & natural gas
liquids in the US almost doubled year over year, rising to $63 during Q4, up from $33 a year earlier. Its average
sales price for natural gas in the US jumped to $4.78 per thousand
cubic feet during Q4, up from $1.49 in the same qtr
last year. The stock dropped 6+ to 129.
If you would like to learn more about CVX click on this link:
club.ino.com/trend/analysis/stock/CVXa_aid=CD3289&a_bid=6ae5b6f
Chevron shares retreat from a record after fourth-quarter profit falls short of expectations
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