Dow settled down 102 (but above early lows), advancers over decliners about 5-4 & NAZ dropped 165. The MLP index was off fractionally to the 226s & the REIT index declined 2 + to the 366s. Junk bond funds were pretty much flat & Treasuries had marginal buying. Oil went up 1+ to the 72s & gold was about even at 1947 (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)
FedEx (FDX) reported its 3rd straight quarterly revenue drop as demand has
weakened following the pandemic boom, sending shares into the red. The company is now looking to cut costs by reducing flights & grounding more aircraft. One move to combine its Express & Ground delivery networks into one business, a move the company hopes will cut $4B in costs over the next 2 years. For the qtr, FDX reported EPS of $6.05, compared with $2.13 in the same period a year earlier. On an adjusted basis, the company reported EPS of $4.94, beating estimates. Sales fell 10% to $21.9B in the qtr, missing expectations for $22.5B. Looking
ahead, FDX is projecting low single-digit revenue growth & EPS of $16.50-18.50 on an adjusted basis.
Analysts expected FDX to give guidance of $18.33. The stock fell 5.74.
If you would like to learn more about FDX, click on this link:
club.ino.com/trend/analysis/stock/FDX_aid=CD3289&a_bid=6aeoso5b6f7
FedEx shares fall on quarterly revenue miss
The average rate on the most popular mortgage, the 30-year fixed, fell for the 3rd straight week, but demand for mortgages didn't move much. Total mortgage application volume increased 0.5% last week, compared with the previous week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index after demand surged the week before. Last week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726K or less) decreased to 6.73% from 6.77%, with points falling to 0.64 from 0.65 (including the origination fee) for loans with a 20% down payment. The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726K) increased to 6.80% from 6.79% for loans with a 20% down payment. This marks the 2nd straight week that jumbo loans have a higher rate than conforming loans. “The last time jumbo rates were higher was in December 2021. Tighter liquidity conditions have prompted jumbo lenders to pull back, increasing rates in the process,” wrote Joel Kan, an MBA economist. Applications to refinance a home loan decreased 2% for the week & were 40% lower than the same week one year ago. Mortgage applications to purchase a home increased 2% for the week but were 32% lower than the same week a year ago. Homebuyers are starting to get used to higher interest rates, but the continued drop in new listings of homes for sale is keeping sales low. Federal Housing Administration demand rose more than conventional loan demand. “First-time homebuyers account for a large share of FHA purchase loans, and this increase is a sign that while buyer interest is there, activity continues to be constrained by low levels of affordable inventory,” added Kan. Homebuilders are benefiting from the dynamic. Mortgage applications to purchase a newly built home jumped 17% in May compared with May 2022, according to the MBA. In tandem with demand, single-family housing starts jumped 18.5% in May compared with Apr, according to the US Census.
Weekly mortgage demand was flat, even as interest rates drop for the third straight week
Pfizer's (PFE) vaccine that protects adults ages 60 & older from respiratory syncytial virus was slightly less effective after 18 months, according to clinical trial results the company announced. The data is from PFE's clinical trial
on more than 34K older adults over 2 RSV seasons. The latest data
is specifically on participants in the Northern Hemisphere at
“mid-season two” in the trial, which is around 18 months after vaccination. The
shot was 78.6% effective against more severe lower respiratory tract
illness with three or more symptoms thru mid-season two, down
marginally from 85.7% thru
the end of season one. Those symptoms include wheezing, shortness of
breath, rapid & shallow breathing, and mucus production. The
vaccine was roughly 49% effective against the same condition with 2 or
more symptoms thru mid-season 2. That's a
steeper decline from the shot's 66.7% efficacy thru one season. The vaccine was generally well tolerated, with no adverse events reported by participants through mid-season 2. PFE presented the results to an advisory committee
of the Centers for Disease Control & Prevention today. The
committee will form a recommendation on how often the company’s RSV
vaccine should be administered in the US, such as whether the shot
should be on an annual schedule. The advisors will also recommend the shot to a specific age group. The stock fell 44¢.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE_aid=CD3289&a_bid=6aeoso5b6f7
Pfizer RSV vaccine for older adults is slightly less effective after 18 months
Gold prices edged lower as traders weighed Federal Reserve Chair Jerome Powell's latest remarks after the central bank held its policy interest rate steady last week but signaled there may be 2 more rate rises this year to lower US inflation further. Gold futures for Aug were off by $2 to settle at $1944 per ounce. He affirmed that more interest-rate increases are likely as inflation is still “well above” the 2% target, while acknowledging there is strong support among his central bank's colleagues for 2 additional 25-basis-point rate hikes this year.
Gold prices retreat as Fed Powell expects more rate hikes ahead
US oil futures climbed 1.9% to end at a 2-week-high $72.53 a barrel. WTI crude's gains were driven mostly by a weaker $ following remarks from Fed Chair Powell who said the central bank was likely to increase interest rates in the coming months. Expectations of higher rates often push oil prices lower as they're seen as a demand-destroyer. But in this case Powell's comments also weakened the $ sharply. Oil barrels are bought & sold with US currency, so their prices often move inversely to sharp moves in the $. Next up for oil markets are weekly US inventory reports from trade group API & the US gov's EIA. Brent crude also ends higher, at $77.12.
WTI Oil Ends at a 2-Week-High on Weaker Dollar
Powell's words are having a chilling effect on the the stock market's rally.
Dow Jones Industrials
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