Dow bounced back 614 (with a little selling into the close), advancers over decliners about 4-1 & NAZ jumped 382. The MLP index went up 3+ to the 212s & the REIT index jumped 7+ to the 484s. Junk bond funds fluctuated & Treasuries saw more selling. Oil advanced 3+ to the 105s & gold rose 5 to 1893 (more on both below).
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Caterpillar's (CAT), a Dow stock, sales surged 14% in Q1 as the
construction machinery & equipment company saw strong demand from
higher end-users & increased inventories from dealers compared with
the same period a year ago. Adjusted EPS rose to $2.88, topping estimates of $2.60. Total revenue totaled $13.6B, beating expectations of $13.4B. Revenue was $11.9B a year-ago. "I’m proud of our global team’s performance as they achieved
double-digit sales growth despite ongoing supply chain challenges," CEO Jim Umpleby said. "We remain
focused on supporting our customers and executing our strategy for
long-term profitable growth." The
construction industries segment sales grew 12% year over year to $6.1B. The segment's higher sales volume in the US was driven by
demand for equipment & aftermarket parts from improving nonresidential
construction, as well as continued strength in residential construction & the impact of changes in dealer inventories. The
resource industries segment saw sales jump 30% year-over-year to $2.8B, driven by the impact of changes in dealer inventories &
higher end-user demand for aftermarket parts. The energy &
transportation segment's sales rose 12% to $4.5B. The company dealt with rising costs in the qtr. Costs & expenses
totaled $11.7B, up 13% from a year ago. Higher
manufacturing costs primarily reflected more expensive material &
freight costs. Operating profit margin was 13.7% for Q1, compared with 15.3% for Q1-2021. The stock fell 1.59.
If you would like to learn more about CAT click on this link:
club.ino.com/trend/analysis/stock/CAT_aid=CD3289&a_bid=6ae5b6f
Caterpillar sales surge on strong construction equipment demand
Russia's Pres Vladimir Putin has warned the West of a “lightning fast” response to any country that intervenes in its war against Ukraine war & creates what he called “strategic threats for Russia.” “We have all the instruments [to respond] that no one can boast of ... we’re going to use them if we have to,” he said, in what has widely been seen as an allusion to Russia's arsenal of intercontinental ballistic missiles & nuclear weapons. Russia shocked the European community by halting gas supplies to Poland & Bulgaria because they had refused to pay for the gas in Russian rubles, as Moscow demanded. The move comes as tensions remain high between Western allies & Russia after Foreign Minister Sergey Lavrov on Mon said the threat of a nuclear war is very significant & the risks should not be underestimated. Pres Biden has asked Congress to approve $33B in additional money for the Ukraine war, which includes funding for US military support to the embattled nation & a mix of direct cash & supplies for Ukraine.
Biden requests $33 billion for Ukraine war; Putin threatens ‘lightning fast’ retaliation to nations
Merck (MRK), a Dow sock, sold $3.2B of its oral antiviral treatment for Covid in Q1, fueling strong revenue growth for the company. Results beat profit & revenue forecasts,
reporting EPS of $2.14 on $15.9B in revenue. The
company raised its 2022 earnings guidance to $7.24-7.36 per
share on $56.9-$58.1B in revenue. It previously
projected EPS of $7.12-7.27 on revenue of $56.1-$57.6B. Its Covid treatment,
molnupiravir, has sold well since the Food & Drug Administration
authorized the pill in Dec. It made up 20% of Q1 revenue. However, MRK lowered its 2022 sales guidance
for molnupiravir to $5-5.5B, down from its
previous outlook of $5-6B. Pharmaceutical sales grew 50% to $14.1B compared with Q1-2021. Keytruda, an antibody treatment used against several types
of cancer, booked sales of $4.8B, up 23% over the same qtr
last year. CEO Rob Davis said Keytruda is growing rapidly as a treatment
for triple negative breast cancer in the metastatic setting & as an
adjuvant therapy to reduce the risk of the disease returning. The stock rose 4.20 (5%).
If you would like to learn more about MRK click on this link:
club.ino.com/trend/analysis/stock/MRK_aid=CD3289&a_bid=6ae5b6f
Merck sold $3.2 billion of its Covid oral antiviral treatment in first quarter
Oil futures finished higher after a
report said that Germany had dropped its opposition to a EU ban
on purchases of Russian oil provided that Berlin is given time to find
alternative sources of supply. Berlin had been seen as a primary hurdle
to an EU-wide ban. West Texas Intermediate crude for Jun rose
$3.34 (3.3%) to close at $105.36 a barrel.
Oil ends higher after report Germany prepared to end Russian crude purchases
Gold futures eked out a modest gain, after ending the previous session at a 2-month low, as a surging $ kept pressure on the precious metal & other commodities. Gold for Jun rose $2 to settle at $1889 an ounce, after ending yesterday at its lowest since late Feb. The precious metal has struggled with headwinds provided by the $. The ICE US Dollar Index a measure of the currency against a basket of 6 major rivals, rose to a 5-year high as the Japanese ¥ plunged after the Bank of Japan pledged to buy unlimited amounts of 10-year fixed-rate Japanese Gov bonds to defend a 0.25% yield level. The € also remained under pressure, slipping below $1.05 for the first time in 5 years. A stronger $ makes it more expensive to users of other currencies to buy dollar-priced commodities. Investors also have been gearing up for the Federal Reserve to embark on a quicker pace of rate hikes this year to help cool high inflation, potentially by greenlighting a 50-basis-point rate increase at the central bank's next policy meeting on May 3-4, & at subsequent meetings. Gold found some support after data showed the US economy contracted in Q1, with the $ coming off is highs versus major rivals. The US economy shrank at a 1.4% annualized pace in Q1. But the decline mostly stemmed from a record intl trade deficit, lower gov spending & declining inventories, while robust consumer spending & businesses investment signaled the economy was still steadily expanding.
Gold ends at modest gain after hitting two-month low amid dollar’s surge
Today the earnings were good enough & stocks were heavily oversold . Buyers returned in force during midday trading. But the stock market is still facing headwinds.. For starters the Fed meets next week & a ½ point rate increase is widely expected. It could even be bigger. The chart below shows the Dow continues to hover around 34K where it has been for more than a year.
Dow Jones Industrials
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