Markets slip lower as 10 year Treasury yield touches 4%

Dow closed up 5 (above early lows), decliners over advancers 4-3 & NAZ dropped 76.  The MLP index hardly budged in the 224s & the REIT index fell 4+ to the 377s.  Junk bond funds crawled higher & Treasuries were sold, taking the yield on the 10 year Treasury to about 4%,  Oil rose higher in the 77s & gold gained 8 to 1845 (more on both below).

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Lowe's (LOW) reported fiscal Q4 sales that fell short of expectations, while also issuing a conservative outlook for the current year as it prepares for a “more cautious consumer.”  Net income for the 3-month period was $957M, compared with $1.21B ($1.78 per share) a year earlier.  Sales rose to $22.45B from $21.34B a year earlier.  However, Q4 included an extra week that saw $1.4B in sales.  Without that additional week, sales would have declined slightly from the year-ago period.  Overall same-store sales fell 1.5%, with a 0.7% decline in the US, a drop attributed to a reduction in lumber prices.  Steady inflation across other goods & higher Pro sales led to a 4.8% uptick in comparable average tickets, though comparable transactions declined 5.5%.  Gross margins were 32.3% for the qtr, slightly lower than the year ago period.  Execs noted shrink, or items that are shoplifted, stolen by employees, lost or damaged, shaved 0.3% off gross margins & said the loss was “a bit worse than expected.”  For fiscal 2023, Lowe's expects total sales to be $88-90B, compared with expectations of $90.48B.  Same-store sales are expected to be flat or down 2% compared to the prior fiscal year.  The company expects EPS for the year to be $13.60-14.00, versus the $13.79 projection.  The conservative outlook was driven by elevated levels of inflation, higher interest rates & more caution from consumers, leading the company to expect a slight decline in the overall home improvement market.  CEO Marvin Ellison, however, went a step further in acknowledging that consumers are concerned about a potential recession.  “Given the slowdown in housing turnover is driven by higher rates and slow supply rather than demand, we continue to see a nationwide trend of trading up in place with consumers opting to upgrade their existing home to meet their evolving needs,” Ellison said.  “All of these dynamics give us confidence in the medium- and longer-term outlook for the industry.”  The stock dropped 12.68 (6%).
If you would like to learn more about LOW, click on this link:
club.ino.com/trend/analysis/stock/LOW_aid=CD3289&a_bid=6ae5b6f7

Lowe’s offers soft sales outlook, warning of a ‘cautious consumer’

Eli Lilly (LLY) is capping out-of-pocket costs for its insulin at $35 for patients, effective immediately.  It's also pledging to cut the price of its most commonly prescribed insulin by 70%.  According to the American Diabetes Association, more than 37M Americans are living with diabetes & 8.4M Americans rely on insulin to survive.  The issue is that insulin costs are typically 10 times more in the US than anywhere else in the world.  "While the current healthcare system provides access to insulin for most people with diabetes, it still does not provide affordable insulin for everyone and that needs to change," LLY CEO David Ricks said.  The move, announced, comes just after a provision in the Inflation Reduction Act was imposed in Jan that caps the out-of-pocket costs for patients enrolled in Medicare at $35 per monthly prescription.  There is a higher prevalence of diabetes, nearly 30%, in Medicare patients, according to the Dept of Health & Human Services (HHS).  Price cuts will take time for the insurance and pharmacy system to implement.  Still, it's ensuring there will be a cap out-of-pocket costs for patients who use LLY insulin & are not covered by the recent Medicare Part D cap, effective immediately.  LLY will automatically cap out-of-pocket costs at $35 at participating retail pharmacies for patients who have with commercial insurance been using LLY insulin.  Those who don't are instructed to go to InsulinAffordability.com & immediately download the LLY Insulin Value Program savings card to receive insulin for $35 per month.  The stock rose 4.08.
If you would like to learn more about LLY, click on this link:
club.ino.com/trend/analysis/stock/LLY_aid=CD3289&a_bid=6ae5b6f7

Eli Lilly caps out-of-pocket costs for insulin effective immediately

The House passed a bill that, if enacted, would require federal agencies to analyze the inflationary impact of exec orders issued by the pres.  It comes in response to Pres Biden's exec actions that critics say have worsened inflation.  In particular, his cancellation of the Keystone XL pipeline shortly after taking office, his proposed $400B student loan handout that’s the subject of pending cases before the Supreme Court & his extensions of the pause on student loan repayments to the tune of about $5B per month.  "As every hardworking family is forced to pay more for almost everything due to Bidenflation, I am proud to pass my bill, the REIN IN Inflation Act, to hold the Biden administration accountable for their reckless spending causing prices to skyrocket," said lead sponsor Rep Elise Stefanik.  House Financial Service Committee Chair Patrick McHenry added.  "Rising prices continue to make everyday life unaffordable for families and workers across America. From the student loan scam, to limiting domestic energy production, to regulatory overload, President Biden’s reckless executive actions have fueled the financial pain felt by hardworking Americans."  Rep Alexandria Ocasio-Cortez, was among the Dem lawmakers who spoke in opposition to the bill & argued that elevated spending during the pandemic helped avert an economic crisis & aided many families struggling to get by.  Known as the Reduce Exacerbated Inflation Negatively Impacting the Nation Act, or REIN IN Inflation Act, the bill would require the Office of Management & Budget (OMB) & the Council of Economic Advisers to provide an inflation estimate for each exec order that's projected to cause an annual budgetary effect of at least $1B.  The estimate would be required to determine whether the exec order will have no significant impact on inflation, a quantifiable inflationary impact on the consumer price index (CPI) or a significant impact on inflation that can't be quantified at the time of the estimate.  The House passed the REIN IN Inflation Act on a bipartisan vote of 272-148 – 59 Des joined most Reps in voting in favor of the bill, while 4 Reps voted against the measure.  The legislation now heads to the Senate, where it’s unclear whether the Dem majority will allow the bill to come to the floor for a vote.

House passes bill to stop Biden's 'reckless spending' as prices skyrocket

Gold futures finished higher for a 3rd consecutive session.  Prices for the precious metal got a boost as the $ weakened in the wake of upbeat economic data from China.  Gold for Apr rose $8 (0.5%) to settle at $1845 an ounce.  Prices for the most-active contract posted a 5.6% loss for the month of Feb, their largest monthly decline since Jun 2021.

Gold Futures Post A Third Straight Session Climb

US benchmark crude-oil prices settled at their highest in almost 2 weeks, after the Energy Information Administration reported a 1.2M-barrel weekly rise in US crude inventories.  That marked a 10th straight weekly rise, but the smallest weekly increase in 5 weeks.  Oil prices seesawed between losses & gains during the session.  West Texas Intermediate crude for Apr settled at $77.69 a barrel, up 64¢ (0.8%).  Based on the front-month contract, that was the highest finish since Feb 16.

U.S. oil futures mark highest finish in nearly 2 weeks

Thoughts about even higher interest rates & a possible recession are keeping investors away from the stock market.  The nervous ones are buying gold which has had a modest rally this week.

Dow Jones Industrials