Dow slid back 56 ahead of the consumer price index reading tomorrow, decliners over advancers 4-3 & NAZ dropped 77. The MLP index added 1 to the 216s & the REIT index was off to 369. Junk bond funds were little changed & Treasuries saw minimal selling, so yields were flattish. Oil was fractionally higher in the 73s & gold gained 10 to 2043 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
New York Federal Reserve Pres John Williams said that inflation remains "too high" & will take some time before returning to pre-pandemic levels despite a slew of aggressive interest rate hikes. Williams did not address what he sees next for monetary policy this year, including whether a pause in rate hikes is appropriate in Jun, but hinted that credit conditions will play a role in his decision-making. "I will be particularly focused on assessing the evolution of credit conditions and their effects on the outlook for growth, employment and inflation," he said. Inflation showed welcome signs of cooling in Mar, according to Labor Dept data released last month. However, core prices pointed to strong underlying price pressures that are still bubbling beneath the surface. The consumer price index remains about 3 times higher than the pre-pandemic average, underscoring the persistent financial burden high prices have placed on Ms of households & small businesses. He also warned that unemployment is likely to climb to 4.0-4.5% due to higher interest rates. The jobless rate is currently at 3.4%, matching the lowest level since 1969. "Because of the lag between policy actions and their effects, it will take time for the [Federal Open Market Committee's] actions to restore balance to the economy and return inflation to our 2% target," he added.
Fed's Williams warns inflation still too high, will 'take time' to return to 2%
Ryanair said it plans to buy at least 150 Boeing (BA), a Dow stock, 737 Max 10 planes with options for 150 more, after a price dispute derailed negotiations for the large order in 2021. It's
the budget carrier’s biggest order & the latest
sizable deal for new planes as airlines replace aging jets & grow
their fleets. Ryanair plans to operate the Max 10s, which haven't yet been certified by regulators, with 228 seats on board. The 150 planes in the firm order are worth more than $20B at list prices, but airlines generally receive significant discounts for such big sales. Ryanair stopped negotiations for a big Max order in Sep 2021 over the pricing dispute. “In
our view it will never be cheap enough and in Boeing’s view it’s always
far too cheap,” Ryanair CEO Michael O’Leary said. The
planes will replace older 737 jets in Ryanair's fleet. The aircraft
will likely be delivered in 2027-2033, O’Leary said. The 150
additional jets it has optioned would allow it to fly more than 300M passengers a year by 2034 & would create 10K jobs by then,
he added. The stock rose 4.60.
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
Ryanair orders at least 150 of Boeing’s largest 737 Max planes
Under
Armour (UA) shares were lower, even after the athletic apparel & footwear
retailer beat quarterly revenue & earnings expectations. The reason for the drop may offer insights into challenges faced by other retailers. The
company drove higher sales, in part, by offering lower prices. UA missed fiscal Q4 expectations on gross margin as it
leaned more on promotions than expected. CFO David Bergman chalked up the margin
decline to higher promotions as UA marked down merchandise
from prior seasons & sold it through off-price retail. UA warned the issues could persist. The company said it expects
margins will still be under pressure as higher promotions outweigh lower
freight costs. Diluted EPS are expected to
a loss of 3-5¢ in the first qtr, below
expected EPS of 6¢. It
expects margins to improve as the year goes on. These
results could spell trouble for retailers that report quarterly results
in the coming weeks. The report could signal that to move merchandise,
companies may have to offer discounts & sacrifice more of their
profits. The stock fell 42¢.
If you would like to learn more about UA, click on this link:
club.ino.com/trend/analysis/stock/UA_aid=CD3289&a_bid=6aeoso5b6f7
Under Armour sends potential warning sign about retailers’ profits
Gold futures finished with a gain as investors awaited US inflation data due out this week to help gauge the outlook for the US economy & path for interest rates. Gold could sink further if US inflation remains sticky, which could drag gold back below the $2015 level. Alternatively, signs of cooling inflation could inject gold bulls with renewed confidence, propelling prices back toward this year's high. The Apr reading for the US consumer price index is due out tomorrow, while Apr producer price index data will be released Thurs. Gold for Jun settled at $2042 an ounce.
Gold Futures Finish Higher Ahead of U.S. Inflation Data
US crude-oil futures managed to
overcome early-morning declines, a stronger $ & a host of other
bearish issues to finish 0.8% higher at $73.71 a barrel, marking a 3rd
consecutive session of gains. Today
was going to be a tough day for risk assets from the start, with a focus on DC's debt-ceiling deal
negotiations with a default date looming. Failure to get a deal done
would likely be a major demand destruction event for the barrel. At the
same time, oil markets worry tomorrow's US consumer inflation data
could come in hot once again & further weigh on oil prices. Focus now
shifts to upcoming weekly inventory reports from API & the EIA.
Oil Prices End Higher Despite Several Bearish Factors
The Dow spent most of the day in the red with only small losses. Inflation data reported shortly along with comments on talks about raising the ceiling ceiling will drive stocks this week.
Dow Jones Industrials
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