Dow went up 136, decliners over advancers 4-3 & NAZ gained 132. The MLP index gave back 1+ to the 207s & the REIT index was off 2 to the 474s. Junk bond funds drifted lower & Treasuries were sold. Oil climbed 2 to 104 due to buying the last ½ hour & gold added 1 to 1889.
AMJ (Alerian MLP index tracking fund)
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The US economy cooled markedly in the first 3 months of the year, as snarled supply chains, record-high inflation & labor shortages weighed on growth & slowed the pandemic recovery. Gross domestic product (GDP), the broadest measure of goods & services produced across the economy, shrank by 1.4% on an annualized basis in Q1, the Commerce Dept said in its first reading of the data. The forecast expected to show the economy had expanded by 1.1%. It marked the worst performance since the spring of 2020, when the US economy was still deep in the throes of the COVID-induced recession. The headline figure often obscures the whole picture because the Commerce Dept calculates the GDP on a qtr-over-qtr basis as if that level of growth were sustained for a full year; in times of huge swings up or down, it can exaggerate both the decline in growth & the subsequent rebound. Looking at the quarterly data, the nation's GDP declined by about 0.3% from the 4th qr to the first qtr, compared with an increase of 1.7% between the 3rd & 4th qtr. The substantial downturn stems from a widening trade deficit, with the US importing far more than it exported. In Q1, imports surged by nearly 20% as businesses & consumers bought more goods from abroad. But exports fell about 6% – an imbalance that widened the trade deficit. The US also saw a slower pace of inventory investment by businesses in Q1, following a surge in inventors at the end of 2021 as companies restocked in anticipation of the holiday-shopping season. But key pillars of the economy – consumer spending & business investment – remained solid last qtr: Businesses & consumers boosted their spending by 3.6% at the start of the year, compared with 6.1% last year. Another bright spot in the economy is the jobs market. Unemployment fell to 3.6% last month, the lowest level since the pandemic began in Feb 2020, & jobless claims have continued to fall amid an exceptionally tight labor market.
Growth shrinks as economy cools far more than economists expected
Americans are quickly losing confidence in the US economy, according to a new survey, reflecting heightened concerns among consumers about sky-high inflation & the rising price of everyday goods. A Gallup survey shows Americans have low levels of confidence in the economy, with 42% rating the current economic conditions as "poor" & 38% describing it as "fair." By comparison, 2% of respondents said the economy is "excellent" & only 18% described it as "good," according to the poll, conducted Apr 1-19. What's more, most Americans expect the economy to deteriorate further. About 76% said they think the economy is getting worse, compared to 20% who believe it is improving. "Economic confidence remains sharply low but still well above readings during the Great Recession," the survey said. "However, if inflation continues to rise and gas prices remain elevated heading into the summer months, economic confidence in the U.S. may well fall further." 4 in 10 Americans have identified economic issues as the biggest problem facing the US — the highest level in 6 years — including 17% who think the most concerning issue is the high cost of living. Another 6% said fuel prices are the biggest problem. Those figures are up slightly from last month, when 35% of Americans said the economy is the biggest problem. There is a partisan divide in the data. Reps are more likely than Dems to cite economic issues, & inflation specifically, as the country's top problem. About 42% of respondents who identify as Reps said the economy is the #1 problem, compared to 33% of Dems.
Americans' confidence in the economy is crumbling: Poll
McDonald's (MCD), a Dow stock & Dividend Aristocrat, reported better-than-expected earnings & revenue, fueled by price hikes in the US & strong international sales growth. But
the war in Ukraine and inflation in the company's home market
loomed large over its quarterly report. CEO Chris Kempczinski said the
conflict hasn't affected consumer behavior across the rest of Europe
yet, but some low-income US consumers are shrinking their orders or
buying cheaper items. Q1 EPS wasr $1.48, down from $2.05 a year earlier. Excluding costs related to the tax settlement, its restaurants in
Ukraine & Russia & other items, EPS was $2.28,
topping the $2.17 estimate. Like
the broader restaurant industry, MCD has been facing higher
commodity & labor costs, leading the company & its franchisees to
raise prices. CFO Kevin Ozan said the company expects elevated inflation
to continue throughout 2022, given macroeconomic conditions. Net sales rose
11% to $5.7B, beating expectations of $5.6B. Global
same-store sales climbed 11.8% in the qtr, fueled by strong growth
in markets such as France & the UK. Digital systemwide
sales surpassed $5B in the qrr. In the US, same-store sales increased 3.5%, surpassing estimates of 3.3%. The company credited price increases & marketing promotions for growth in its home market. A year ago, the
fast-food chain reported US same-store sales growth of 13.6% as it lapped the weak demand of the early pandemic lockdowns. Ozan said consumers are worried about inflation, particularly gas prices. “We
are certainly keeping a close watch on lower-end consumers, just to
make sure that we’re still providing the right value for our lower-end
consumers,” he added. “But one of the things that’s probably helpful
right now, as you know, is food at home has been increasing even more
than food away from home.” The stock rose 6.61 (3%).
If you would like to learn more about MCD click on this link:
club.ino.com/trend/analysis/stock/MCD_aid=CD3289&a_bid=6ae5b6f
McDonald's revenue tops estimates, fueled by price hikes and overseas same-store sales growth
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