Dow gained 73, advancers over decliners better than 4-1 & NAZ climbed 111. The MLP index stayed in the 229s & the REIT index was up 4+ to 403. Junk bond funds edged lower & Treasuries had a little buying, reducing yields slightly. Oil recovered 1+ to the high 79s & gold added 4 to 1943.
AMJ (Alerian MLP Index tracking fund)
The IMF revised upward its global growth projections for the year, but warned that higher interest rates & Russia’s invasion of Ukraine would likely still weigh on activity. In its latest economic update, the IMF said the global economy will grow 2.9% this year — which represents a 0.2 percentage point improvement from its previous forecast in Oct. However, that number would still mean a fall from an expansion of 3.4% in 2022. It also revised its projection for 2024 down to 3.1%. “Growth will remain weak by historical standards, as the fight against inflation and Russia’s war in Ukraine weigh on activity,” Pierre-Olivier Gourinchas, director of the research dept at the IMF, said. The outlook turned more positive on the global economy due to better-than-expected domestic factors in several countries, such as the US. “Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment, and better-than-expected adaptation to the energy crisis in Europe,” Gourinchas said, also noting that inflationary pressures have come down. In addition, China announced the reopening of its economy after strict Covid lockdowns, which is expected to contribute to higher global growth. A weaker $ has also brightened the prospects for emerging market countries that hold debt in foreign currency. However, the picture isn't totally positive. IMF Managing Director Kristalina Georgieva warned earlier this month that the economy was not as bad as some feared “but less bad doesn’t quite yet mean good.” “We have to be cautious,” Georgieva added. The IMF warned of several factors that could deteriorate the outlook in the coming months. These included the fact that China's Covid reopening could stall; inflation could remain high; Russia's protracted invasion of Ukraine could shake energy & food costs even further; & markets could turn sour on worse-than-expected inflation prints. IMF calculations say that about 84% of nations will face lower headline inflation this year compared to 2022, but they still forecast an annual average rate of 6.6% in 2023 & of 4.3% the following year.
IMF hikes global growth forecast as inflation cools and household spending surprises
General Motors (GM) shares jumped after it reported
higher net income for Q4, forecast
stronger-than-expected earnings for 2023 & said it would cut $2B in costs. The automaker, the top in the US by sales, forecast that it could
hold its pre-tax margins steady at 8-10% thru 2025, despite
a price war that Tesla (TSLA) has triggered in the electric vehicle
segmebetweenatnt. GM plans to build only about 400K electric vehicles in
North America between now & H1-2024. Its financial
results will hinge mainly on sales of combustion-engine trucks & SUVs. For
now & for several years to come, GM's profitability will be driven by
demand for those vehicles. GM underscoaired that its Chevrolet & GMC
pickup trucks make it #1 in sales volume in the US market, & it
leads in sales of highly profitable large SUVs as well. The company plans to cut costs in automotive operations by $2B
this year, including reducing employment thru attrition, CFO Paul Jacobson said, but
does not plan layoffs. GM has 167K employees worldwide, including its financial subsidiary & the Cruise robotaxi unit. The stock rose 2.95 (8%).
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM_aid=CD3289&a_bid=6ae5b6f7
GM shoves aside recession fears with robust 2023 forecast
Spotify
(SPOT) shares popped after the company reported Q4 earnings that beat expectations for revenue & showed strong user growth. Loss per share of €1.40 ($1.52) vs an estimated loss of €1.27 as expected & revenue €3.17B euros vs €3.16B expected. Spotify
reported 489M monthly active users for the qtr, up 20% year
over year. There were 33M net additions to monthly active users
during the qtr, marking a record high for the company. SPOT also
reported 205M paid subscribers, up 14% from a year ago. In Q3,
the company said it expected to add 23M new
monthly active users in Q4, bringing its total to 479M. It had
also expected its revenue to increase to €3.2B & to post
202M paid subscribers in the qtr. SPOT is continuing
to invest in advertising & its ad-supported revenue grew 14% year
over year & accounted for 14% of total revenue. Growth was driven by podcasting. The stock went up 10.44 (10%).
If you would like to learn more about SPOT, click on this link:
club.ino.com/trend/analysis/stock/SPOT_aid=CD3289&a_bid=6ae5b6f7
Spotify shares pop after earnings show strong user growth
Investors are feeling good today. However, tomorrow brings the Fed decision along with results from the OPEC+ meeting.
Dow Jones Industrials
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