Markets edge higher while inflation remains mild

Dow finished up 52 in a wild day of trading, decliners above advancers about 3-2 & NAZ gained a modest 15.  The MLP index hovered in the 235s & the REIT index fell 1+ to 371.  Junk bond funds hardly budged & Treasuries had more selling in the PM, taking yields higher.  Oil pulled back 1+ to go under 83 & gold slid back 3 to 1947 (more below).

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Disney (DIS), a Dow stock, posted mixed results for its fiscal 3rd qtr despite ongoing streaming woes & massive restructuring costs resulting from pulling content from its platforms.  Subscriber losses continued over the last 3 months, with the company reporting 146M Disney+ subscribers during the most recent qtr, a 7.4% decline from the previous qtr & a larger loss than was expected.  The majority of subscriber losses came from Disney+ Hotstar, where the company saw a 24% drop in users after it lost out on the rights to Indian Premier League cricket matches.  Facing dwindling users & falling revenue in its media & entertainment distribution segment, DIS announced it would raise the price on its ad-free streaming tier in Oct & that it would crack down on password sharing.  “Moving forward, I believe three businesses will drive the greatest growth and value creation over the next five years,” CEO Bob Iger said.  “They are our film studios, our parks business and streaming, all of which are inextricably linked to our brands and franchises.”  DIS recorded $2.65B in one-time charges & impairments, dragging the company to a rare quarterly net loss.  The majority of those charges were what DIS called “content impairments” related to pulling content off its streaming platforms & ending 3rd-party licensing agreements.  The company swung to a net loss of $460M (25¢ per share) for the qtr ended Jul 1 from a net income of $1.4B (7¢ per share) during the year-ago period.  Excluding those impairments, EPS was an adjusted $1.03.  Revenue increased 4% to $22.3B, just short of estimates of $22.5B.  Iger said the company would be looking to improve the quality of its studio films as well as reduce the number of released titles & the cost per title.  The stock rose 4.25.
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

Disney posts mixed results for quarter plagued by streaming woes, restructuring

The number of Americans applying for jobless benefits jumped last week, but not enough to raise concern about the consistently strong US labor market.  US applications for unemployment benefits rose by 21K to 248K last week, from 227K in the week before, the Labor Dept reported.  That's the most in 5 weeks.  The 4-week moving average of claims, a less volatile reading, ticked up by 2K to 228K.  Jobless claim applications are viewed as broadly representative of the number of layoffs in a given week.  Applications for jobless aid reached a higher level above 260K for a few weeks this spring, causing some concern, but then retreated.  Troubling levels of inflation moved the Federal Reserve to raise interest rates at a breakneck pace for the past year-&-a-½: the central bank raised its benchmark rate 11 times to the current 5.4%, a 22-year high.  Part of the Fed’s reasoning was to cool the job market and bring down wages, which, in theory, suppresses price growth.  Though inflation has come down significantly during that stretch, the job market has remained remarkably strong.

Number of Americans applying for jobless aid rises, but not enough to cause concern

Amazon (AMZN) is cutting some of its private label brands as part of a broader effort to rein in costs.  In addition to the plethora of products sold by 3rd-party sellers, retailers & household names, AMZN also sells goods produced in-house, similar to a store brand.  The number of AMZN's private label brands has expanded rapidly over the years to include things like Goodthreads apparel, Presto paper towels, as well as Amazon Basics batteries.  Matt Taddy, VP of Amazon Private Brands, said that the company has looked to eliminate some in-house products after determining they didn't resonate with customers.  “We always make decisions based on what our customers want, and we’ve learned that customers seek out our biggest brands – like Amazon Basics and Amazon Essentials – for great value with high quality products at great price points,” Taddy said.  AMZN is significantly paring back its apparel & furniture brands, some of which will remain on its site until they run out of stock.  The move is part of its wider cost-cutting initiatives, but also in anticipation of a possible long-awaited antitrust lawsuit from the Federal Trade Commission.  The stock inched up 71¢.
If you would like to learn more about AMZN, click on this link:
club.ino.com/trend/analysis/stock/AMZN_aid=CD3289&a_bid=6aeoso5b6f7

Amazon axes some private label brands as part of wider cost cuts

Gold closed lower for a 4th-straight session as the $ moved higher even after the US reported inflation rose last month for the first time in a year.  Gold for Dec closed down $1 to settle at $1948 per ounce.  Jul US inflation rose 0.2% from Jun, matching expectations as rising energy & travel costs pushed prices higher for the first time in a year.  However the uptick in costs may not be sufficient to force the Federal Reserve to raise interest rates again before year end.  The $ fell following the report but turned higher later, making gold more expensive for intl buyers.  The ICE $ index was last seen 0.07 points to 102.56.  Treasury yields also reversed course after dropping following the release of the inflation data, with the US 2-year note last seen paying 4.833%, up 2.9 basis points, while the yield on the 10-year note was up 7.6 basis points to 4.081%.

Gold Closes Lower as the Dollar and Treasury Yields Rise Following US Inflation Report

Oil’s 7-week rally, driven by increasing signs of a tightening market, paused near the highest levels of the year as technical barriers stalled further advances.  Crude has climbed about 20% since late Jun as OPEC & its allies cut production, & the cartel's newest monthly report shows the market on track for a deficit of 2M barrels a day this qtr.  Crude prompt spreads have widened to the largest backwardation since Nov & options markets also turned more bullish.  Still, concerns about potentially weakening consumption have capped the gains & West Texas Intermediate settled in overbought territory on a 9-day basis for the first time in 3 sessions yesterday.  WTI futures fell to settle below $83 a barrel after climbing 3% over the previous 2 sessions.  Meanwhile, increased geopolitical pressures are adding to supply insecurities.  Tensions between Kyiv & Moscow heightened after a Ukrainian drone attacked a Russian-flagged oil tanker over the weekend in the Black Sea, a key waterway for the nation's exports.  WTI for Sep fell $1.58 to settle at $82.82 a barrel & Brent for Oct slid $1.15 to settle at $86.40 barrel.

Oil Rally Pauses Near Highs for the Year Amid Technical Barriers

After Dow had a strong opening, it slid lower thoughout the trading session.  Buyers stayed home for the rest of the day.  The inflation news was widely expected.  But thoughts about high interest rates & potential banking problems are weighing heavily on investors.

Dow Jones Industrials