Markets rise, but early gains were trimmed in late day trading

Dow finished up 86 (but 240 below early highs), advancers over decliners about 3-1 & NAZ added 158.  The MLP index gained 1+ to the 234s & the REIT index was up 1+ to the 382s.  Junk bond funds were mixed & Treasuries saw heavy buying, reducing yields.  Oil gained 1+ to 76 & gold jumped 25 to 1962 (more on both below).

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Inflation in Jun grew by its slowest pace in more than 2 years, an encouraging sign that the Fed is on track to meet its benchmark target rate of 2%, new Labor Bureau data reveals.  The year-over-year inflation rate dropped from 4% in May to 3% in Jun, largely due to falling energy & transportation prices, according to the latest consumer price index report.  Perhaps most importantly, core inflation, a broad measure which excludes volatile food & energy prices, only grew by 0.2% month-over-month in June, after steadily rising by 0.4% or more for the past 6 months.  Core inflation is closely watched by the Fed as it's considered to be a more accurate measure of where inflation is headed.  The slowdown in core prices “puts inflation right back in the Fed sweet spot,” Sarah House, a senior economist at Wells Fargo, said.  “The June data shows that expectations for disinflation are not hopeless.” The drop brings year-over-year core inflation down from a rate of 5.6% in Jan to 4.8% in Jun.  However, considering that core inflation accounts for nearly 80% of all items in the CPI, that rate will need to drop much faster for the Fed to reach its target inflation rate of 2%.  With core inflation’s current rate of deceleration, House doesn't anticipate that inflation will go down to 2% until at least after 2024.  “There are reasons to be optimistic that the downward trend is more firmly in place, but I think the Fed is going to proceed pretty cautiously,” says House.  “Getting to that 2% target — I think we’re still a ways away,” she says.  To cool inflation, the Fed has tried to discourage spending by making it more expensive to borrow money.  To do this, they've raised their benchmark interest rate from near-zero in Mar 2022 to 5.00-5.25%.  However, the inflationary pressures from a resilient economy & job market remain a concern for the Fed, with the inflation rate still above its target of 2%.  For that reason, it's widely expected that the Fed will announce a 0.25 percentage point hike when the central bank meets on Jul 24-25.  The probability of such an increase is 92.4% according to the CME FedWatch Tool, which measures rate hike probabilities. That means borrowing would continue to get more expensive for consumers, with interest rates increasing slightly for credit cards, loans & auto financing.

Inflation slows to 3%, but returning to 2% is ‘still a ways away’

United (UAL) unveiled its first new seat in nearly a decade for passengers at the front of the plane, becoming the latest carrier to upgrade its cabin as airlines battle for high-paying travelers.  The new first-class seat for narrow-body domestic flights features better technology like armrest wireless charging stations & winged headrests.  There will also be an 11-inch by 19-inch barrier between the seats, which are in a 2-by-2 configuration.  UAL & rivals have upgraded their business or first-class seats in recent months to create more privacy & more room for customers willing to pay a premium to fly.   Not every aircraft will get the new seat, but UAL is also planning to upgrade the current first-class seat, which it started flying in 2015.  Some of the new features will include the privacy barriers at the headrest and new cushions.  The stock fell 62¢.
If you would like to learn more about UAL, click on this link:
club.ino.com/trend/analysis/stock/UAL_aid=CD3289&a_bid=6aeoso5b6f7

United unveils new first-class seats in nearly once-in-a-decade refresh

A trip to The Walt Disney (DIS), a Dow stock, theme parks has been on many American families' bucket lists for generations as the experiences have become more engaging & parents seek to make memories their children will remember for a lifetime.  But there is a flip side to visiting a destination that thousands of other people want to attend at the same time & one expert says the modern-day experience of planning & attending attractions has become more stressful & less fun for patrons than in the past.  Ryan Harmon is a former DIS "Imagineer" who now owns Zeitgeist Design & Production, a company whose clients include DIS & other global theme park brands.  He says DIS, in particular, has "a good problem" in that too many people flock to the company's theme parks because guests seek the experiences & nostalgia, & have fond memories of attending with their parents that they want to pass down to their kids.  It seems no matter how high the pricing goes, people continue to go.  "So you've got this problem where you have too many people who want to come at the same time [so they try] to sort of spread the crowd out," Harmon said.  He continued: "That's why they've added many more experiences, they try to raise the price high enough. That maybe weeds out some people, but that doesn't seem to work, and so they've come up with a system using your mobile phone…the problem is that unless you plan ahead – which a lot of people do not – you end up going there and having a pretty poor experience because people have reserved rides and shows and restaurants."  He said that the days of taking your kids to a DIS park on a whim & expecting to have a great time are over.  "We bought our very expensive tickets and went in and watched as all these people walked in front of us in the queues because they made an online reservation," he added.  "So we got stuck waiting and waiting and waiting."  He also criticized DIS's decision to get rid of the free fast pass.  The stock rose 53¢.
If you would like to learn more about DIS, click on this link:
club.ino.com/trend/analysis/stock/DIS_aid=CD3289&a_bid=6aeoso5b6f7

Former Disney worker details how its theme parks lost their magic

Gold futures climbed by more than 1% to settle at their highest since mid-Jun, supported by weakness in the $ & declines in Treasury yields in the wake of a weaker-than-expected Jun consumer price index reading.  The price for gold has become more bullish on the back of the CPI data, as traders don't expect the Fed to chop more wood now, meaning that the central bank may soon end its cycle of interest-rate hikes.  Gold for Aug rose $24 (1.3%) to settle at $1961 an ounce. That was the highest most-active contract finish since June 16.

Gold Futures Log Highest Finish Since Mid-June

Oil futures settled higher for a 2nd straight session.  The potential for new output cuts from the Organization of the Petroleum Exporting Countries & their allies, together known as OPEC+, which meets Sun, provided support for oil prices today.  Also, growing internal opposition to lockdown measures in China, as well as an increasing push to vaccinate the elderly, are driving speculation of a potential reopening of China's economy.  Such measures would help support crude demand for the world's largest crude importer.  US benchmark WTI crude for Jan rose 96¢ (1.2%) to settle at $78.20 a barrel.

U.S. oil futures post back-to-back session gains

After a big rise in the stock market, the bulls got nervous at midday which led to selling in the PM.  That money went into bonds, driving yields sharply lower.  Tomorrow should be exciting with release of the producer price index, showing a glimpse for future price hikes.

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