Dow dropped 433, decliners over advancers a big 4-1 & NAZ retreated 397. The MLP index was off 4+ to the 206s & the REIT index fell 5+ to the 419s. Junk bond funds drifted lower & Treasuries saw very heavy buying, reducing yields. Oil was little changed holding above 110 & gold gained 15 to 1863.
AMJ (Alerian MLP index tracking fund)
European Commission Pres Ursula von der Leyen said that she's hoping an agreement to sanction Russian oil will be reached in the coming days. The 27 EU countries have been stuck over an oil embargo on Russia for several weeks, with countries such as Hungary, Slovakia & the Czech Republic blocking the measure. Any sanctions imposed by the EU need to have the approval of all member states in order to be implemented. “I hope we are talking about days. So what we are looking at is one or two member states that are landlocked, so cannot have oil via the sea and need alternatives in pipelines and in refineries, and there we are trying to find solutions,” von der Leyen said at the World Economic Forum. “We are working on the oil embargo very hard,” she added. The EU decided to block imports of Russian coal last month, but imposing restrictions on oil has proven a much more complicated task. Countries that are highly dependent on Russian fossil fuels are concerned about the implications of such measures for their own economies. Hungary, for example, is reportedly asking for financial support of €15-18B ($16-19B) to move away from Russian energy. Hungary will also reportedly refuse to discuss the matter at an upcoming EU meeting later this month.
EU chief hopes deal for a Russian oil embargo will be reached in the coming daysTreasury yields fell, as selling in the equity markets picked up once again. The yield on the benchmark 10-year Treasury note fell 4 basis points to 2.813% & the yield on the 30-year Treasury bond moved 4 basis points lower to 3.024%. Yields move inversely to prices & 1 basis point is equal to 0.01%. The moves came as US stocks resumed their sell-off, after a relief rally yesterday. The Dow fell 172 (0.5%), the S&P 500 lost 1.4% & the tech-heavy NAZ dropped 2.7%. Investors remain concerned about rising inflation & are keeping an eye on how the Federal Reserve tries to quell the inflationary pressures. The Fed has already hiked rates twice this year & one of those rate increase was of 50 basis points. The effects of rising inflation on the economy & how this is feeding thru into data, are being closely watched by investors, given growing fears of a recession.
Treasury yields fall as selling in equities continues
Electronics retailer Best Buy (BBY) lowered its full-year sales &
profit forecasts on Tuesday, as red-hot inflation saps consumers'
spending power. Its stock fell over 16% last week as retail behemoths Walmart (WMT) &
Target (TGT) said surging prices of everything from toothpaste to gas
was forcing consumers to prioritize household essentials over
discretionary items such as electronics. BBY was
expecting full-year comparable sales to fall 3-6%, compared with its
previous forecast of a 1-4% drop. It expects fiscal 2023 adjusted EPS of $8.40-9.00, compared with its previous forecast of $8.85-9.15. Total
revenue fell to $10.6B from $11.6B in Q1
ended Apr 30, but beat expectations of about $10.4B. The stock went up 18¢.
If you would like to learn more about BBY click on this link:
club.ino.com/trend/analysis/stockBBYa_aid=CD3289&a_bid=6ae5b6f
Inflation hits Best Buy annual sales
Gloom has returned to investors. There is very little to cheer about as long as inflation & interest rates are high & the economy is slipping into a recession. Nervous investors are buying gold & Treasuries.
Dow Jones Industrials
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