Markets edge lower as traders evaluate earnings

Dow dropped 79, decliners slightly ahead of advancers & NAZ was up all of 3.  The MLP index lost 2 to the 224s & the REIT index was up 2+ to the 372s.  Junk bond funds fluctuated & Treasuries continued to see more selling, driving yields higher.  Oil lost 1+ to the 79s & gold retreated 11 to 2007 (more on both below).

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As part of Meta's (META) latest round of job cuts announced in Mar, the company started laying off employees in technical roles.  Employees with technical backgrounds like user experience, software engineering, graphics programming & other roles announced on LinkedIn that they had been let go by the company on Wednesday morning. A spokesperson confirmed the cuts had started.  One employee impacted by the moves said that layoffs also hit product-facing teams & the company plans to cut business-facing roles, such as finance, legal & HR, beginning in May.  The employee said Meta suggested tech teams who weren't impacted by these cuts may also be included in layoffs next month.  LinkedIn posts indicated that multiple people who worked as gameplay programmers were also affected by the layoffs.  With ad revenue slumping last year & its stock price in free-fall.  Its first round of layoffs in Nov, affecting 11K workers.  CEO Mark Zuckerberg then declared 2023 the “year of efficiency,” & proceeded with a plan of an additional 10K job cuts in Mar, resulting in restructuring costs of $3-5B.  The stock fell 2.19.
If you would like to learn more about META, click on this link:
club.ino.com/trend/analysis/stock/META_aid=CD3289&a_bid=6aeoso5b6f7

Meta has started its latest round of layoffs, focusing on technical employees

A bipartisan group of lawmakers unveiled a proposal to avoid a first-ever default on the national debt if House Rep & Pres Biden fail to strike a deal.  The blueprint from the Problem Solvers Caucus, which includes 32 Reps & 32 Dems in the House, calls for suspending the debt ceiling thru Dec 31, 2023, & proceeding with the typical budget & appropriations cycle to "remove immediate pressure of defaulting on our national debt."  In the meantime, the group of centrists would establish an independent fiscal commission to come up with a plan to deal with the $31T in debt over the long term.  Recommendations from the commission would be due to Congress in Dec 2024, after the next presidential election, & would then be voted on no later than Feb 2025.  "The debt ceiling and debt crisis demand a two-party solution," said Problem Solvers co-Chair Rep Brian Fitzpatrick.  "We must never allow our nation to default on our debt, we must never put our nation’s full faith and credit at risk, and we must insist on responsible budget reform measures."  The debt ceiling, which is currently around $31.4T, is the legal limit on the total amount of debt that the federal gov can borrow on behalf of the public, including Social Security & Medicare benefits, military salaries & tax refunds.  The gov bumped up against that limit in Jan, prompting the Treasury Dept to initiate a series of actions that are known as "extraordinary" measures & are intended to stave off a default.  It's unclear how long the measures can be used to avoid the Treasury running out of cash; earlier this year, Treasury Secretary Janet Yellen projected the measures will keep the gov funded until at least early Jun.  The backup plan from the House moderates comes amid a lengthy standoff over the debt limit.  Reps, who control the House, have promised to raise the borrowing limit only in exchange for deep spending cuts.  In turn, Biden & his fellow Dems, who control the Senate, have refused to negotiate & insisted on a "clean" debt ceiling bill that does not include any cuts.  House Speaker Kevin McCarthy proposed a one-year debt ceiling increase accompanied by a set of spending cuts & policy changes.  However, it is unclear whether the measure could draw the support of a majority of House Reps.  "A no-strings-attached debt limit increase will not pass," he said in a speech on the floor of the New York Stock Exchange.

Bipartisan lawmakers unveil group to avoid US debt default

Global airline capacity will be lower than expected this year & stay constrained until 2025 at the earliest, warned IATA director general Willie Walsh, due to delays in new aircraft deliveries & a lack of availability of spare parts.  "I can't see anything really improving or significantly improving probably until 2025 at the earliest and it may even go beyond that," Walsh said on the sidelines of a conference in Dublin.  Airlines, hoping to put years of pandemic restrictions behind them, expect travel demand to recover to 2019 levels & above this year, but the lack of planes to meet demand could put a brake on growth.  Aircraft manufacturers Boeing (BA), a Dow stock, & Airbus are feeling widespread pressure from bottlenecks in supply chains & that is leading to delivery delays, while Walsh said that airline bosses were also telling him there were not enough spare parts, particularly for engines.  "It means capacity will be slightly lower than the industry had forecast," Walsh said, adding that he would expect the reduction for this year to be in the low single digits range.  Last week, BA announced a fresh supplier-related halt to 737 deliveries while industry sources have said Airbus has started notifying airlines about delivery delays in 2024 for its best-selling A320neo family of jets.  Walsh said he did not expect chaos at airports this summer. Last year, labor shortages & the sudden uptick in demand after COVID-19 in Europe forced airlines to cancel large numbers of flights & scale back capacity.  The stock was up 35¢.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA_aid=CD3289&a_bid=6aeoso5b6f7

Airline capacity constrained until 2025 due to delivery delays, spare parts: IATA

Gold closed lower, but remained above the $2000 mark after falling below it earlier for the first time since Apr 3 as the $ & bond yields moved higher.  Gold for Jun closed down $12 to settle at $2007 per ounce, after earlier touching $1980.  The drop comes as investors move to the $ as the Federal Reserve is expected to continue raising interest rates to slow the economy & move inflation lower, with a 25-basis point increase expected when its policy committee meets next month.  A higher $ bit into gold prices, with the ICE dollar index last seen up 0.18 points to 101.93, down from an overnight high of 102.23.  Bond yields also rose, bearish for gold since it offers no interest.  The US 2-year note was last seen paying 4.254%, up 4.7 basis points, while the yield on the 10-year note was last seen up 3.3 basis points to 3.611%.

Gold Settles Lower as the Dollar and Bond Yields Rise

Oil futures declined, with US benchmark prices settling below $80 a barrel -- at their lowest in more than 2 weeks as traders continued to show concern over the outlook for energy demand.  A bigger-than-expected weekly decline of 4.6M barrels in US crude inventories, reported by the Energy Information Administration, failed to provide a lift to oil prices.  May West Texas Intermediate crude declined by $1.70 (2.1%) to settle at $79.16 a barrel.  Front-month contract prices settled at their lowest since Mar 31

U.S. oil prices settle below $80, at their lowest in over 2 weeks

The Dow had another tough day because there was no excitement to bring back buyers.  So Dow keeps trending sideways.

Dow Jones Industrials