Thursday, July 13, 2023

Markets rise as the wholesale price index cools in June

Dow was up 61 (off early highs), advancers over decliners 5-2 & NAZ advanced 130.  The MLP index added 1+ to the 235s & the REIT index was steady in the 381s.  Junk bond funds crawled higher & Treasuries saw more buying which reduced yields.  Oil rose fractionally to the 76s & gold was up 2 to 1964.

AMJ (Alerian MLP Index tracking fund)


 

 




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There is more evidence inflation is easing across broader sectors.  The Labor Dept said that the consumer price index rose 0.1% on an annual basis in Jun, the lowest since Aug 2020.  Prices are up 0.1% month over month.  The forecast had expected an increase of 0.4% on an annual basis & 0.2% on a monthly basis.  Core prices, which exclude more volatile measurements of food & energy, rose 2.4% year over year, less than what was expected.  The report follows a similar trend for consumer prices, reported yesterday, which rose 3% on an annual basis, slightly below the 3.1% increase forecast.  Although inflation has cooled from a peak of 9.1%, it still remains above the Federal Reserve's 2% target rate.  Even with the price pullbacks, 92% of traders are still expecting the Federal Reserve to hike interest rates by 25 basis points at the Jul 26th meeting, according to CME's FedWatch Tool.  That would bring the benchmark to 5.25-5.50%.

Wholesale inflation prices ease in June, lowest in nearly 3 years

PepsiCo (PEP, a Dividend Aristocrat, reported quarterly earnings & revenue that topped expectations, despite falling demand for its drinks & food.  The beverage giant also raised its full-year outlook for the 2nd consecutive qtr.  Q2 EPS was $1.99, up from $1.03 a year earlier.  Excluding items, EPS was $2.09.  Net sales rose 10.4% to $22.3B.  Organic revenue, which strips out the impact of acquisitions & divestitures, rose 13% in the qtr.  But volume fell as higher prices for its snacks & drinks hurt demand.  Volume, which excludes pricing & currency fluctuations, dropped 3% for the food divisions & 1% for its beverages.  CEO Ramon Laguarta said that consumers are looking for better deals & shopping more from $ stores & club retailers.  But execs also said that the company's volume hasn't fallen as much as expected, likely thanks to low global unemployment.  PEP is planning to return to its usual pricing strategy for the rest of the year.  The stock rose 1.35.
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club.ino.com/trend/analysis/stock/PEP_aid=CD3289&a_bid=6aeoso5b6f7

PepsiCo beats earnings estimates, raises full-year outlook even as higher prices hurt demand

The Food & Drug Administration approved the first over-the-counter birth control pill, a landmark decision that will allow more women & girls in the US to prevent unintended pregnancies without a prescription.  The daily pill, called Opill, was first approved by the FDA as a prescription in 1973.  The pill's manufacturer, Paris-based HRA Pharma, said the contraceptive would most likely be available at stores & online retailers in the US in early 2024.  HRA Pharma, a unit of Dublin-based pharmaceutical company Perrigo (PRGO), said there will be no age restrictions on sales of the pill.  HRA Pharma has not announced the price of the pill, which will determine how affordable it will be to the public.  But the company is committed to making the pill “accessible and affordable to women and people of all ages,” Frederique Welgryn, PRGO's global VP for women's health, said.  The stock rose 74¢.
If you would like to learn more about PRGO,
click on this link:
club.ino.com/trend/analysis/stock/PRGO_aid=CD3289&a_bid=6aeoso5b6f7

FDA approves first over-the-counter birth control pill

Lower inflation data is continuing as expected.  However at least 1 more rate is widely expected.  Additionally, consumers are still learning to live with higher prices for much of the products & services they buy.

Dow Jones Industrials

 






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