Dow fell 67, advancers marginally ahead of decliners & NAZ recovered 34. The MLP index went up 2+ to the 188s & the REIT index was steady at 493 following yesterday.s decline. Junk bond funds were weak & Treasuries continue to be sold, raising interest rates (more below). Oil jumped 1+, nearing 80, & gold plunged 36, falling to 1788.
AMJ (Alerian MLP index tracking fund)
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New unemployment claims rose but remained near a 52-year low last week,
with the weekly pace of new claims holding below pre-pandemic levels as
the labor market sees job openings near a record high.
Initial jobless claims, week ended Jan 1: 207K vs 195K expected & a revised 200K during the prior week
Continuing claims, week ended Dec 25: 1.754M vs 1.678M expected & a revised 1.718M during the prior week
The US economy saw another week with new jobless claims coming in
below their pre-virus levels, as new claims averaged around 220K per
week throughout 2019. And though claims came in slightly higher than
expected, some economists had warned heading into the report that the
timing of this week's data around the holidays might cause some
additional distortions Continuing claims, like new claims, have trended lower, but remained
above pre-pandemic levels in the latest data. And in the latest data,
they increased slightly by 36K to reach a total of nearly 1.8M, rising from what had been the lowest level since early Mar
2020 during the prior week. At 207K, the tally for new jobless
claims for the final days of 2021 came in above the 188K reported in
early Dec, which marked the lowest level since 1969.
Another 207,000 Americans filed new claims last week
The 10-year Treasury yield rose as high as 1.75%, as the rate spike in the new year resumed with investors assessing the Federal Reserve's faster-than-expected policy tightening. The yield on the benchmark 10-year Treasury note last moved up by 2 basis points to 1.728%, rising for a 4th straight day. The benchmark rate ended 2021 at 1.51%. The yield on the 30-year Treasury bond moved 2 basis points higher to 2.109%. Yields move inversely to prices & 1 basis point is equal to 0.01%. The minutes from the Federal Reserve's Dec policy meeting showed that the central bank had begun plans to start reducing the number of bonds it holds. Fed officials said the reduction in its balance sheet would likely start sometime after the central bank begins raising interest rates. Investors will now be looking ahead to the closely watched Dec nonfarm payrolls report, due out tomorrow. Market expectations are for the Fed to start raising its benchmark interest rate in Mar & Fed officials have indicated that they foresee as many as 3 rate hikes in 2022.
10-year Treasury yield tops 1.75% as rate spike to start 2022 continues
Walgreens Boots Alliance (WBA), a Dividend Aristocrat, exceeded expectations for fiscal Q1
earnings & raised its forecast for the year, as customers came to its
stores for Covid booster shots, at-home test kits & first-time
vaccinations for children. Execs said WBA must
increase wages as pharmacy staff juggle prescription refills &
administering vaccines. CFO James Kehoe said the company will spend $120M
more on wages, as the drugstore competes with other retailers in a tight
labor market & tries to keep up with demand. He added the company is
investing more in labor, after a shortage of staff contributed to
“somewhat softer” prescription volumes in Q1. “There’s been a high level of stress in the system,” he said. The
drugstore chain raised its forecast for the year, saying it now
anticipates adjusted EPS to grow the low single-digits
instead of being flat. In the qtr, net EPS rose to $4.13 versus a net loss of 36¢ a year earlier. Excluding items, EPS was $1.68, topping the $1.33 expected. Sales rose to $33.9B from $31.4B a year earlier & were higher than the $32.7B expected. WBA administered 15.6M Covid vaccines in Q1 — bringing its total to more than 56M to date. Its pace of vaccinations accelerated from the previous qtr, when it
gave 13.5M shots, as adults came for booster shots & kids
qualified for first-time shots. Covid vaccinations peaked in the 3rd qtr of last year, when it administered 17M shots. So far, the company said it has administered over 9M booster shots & gave 6.5M Covid tests in its Q1. The stock fell 54¢.
If you would like to learn more about WBA click on this link:
club.ino.com/trend/analysis/stock/WBAa_aid=CD3289&a_bid=6ae5b6f
Walgreens earnings top estimates but its shares fall on labor cost worries
Dow Jones Industrials
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