Dow was off 21, decliners over advancers 2-1 & NAZ went up 72. The MLP index edged lower to the 236s & the REIT index slipped back 2+ to 369. Junk bond funds hardly budged & Treasuries had limited selling which raised yields (more below). Oil slid back to the 82s & gold fell 5 to 1940.
AMJ (Alerian MLP Index tracking fund)
Treasury yields were little changed as investors digested the
latest inflation data & looked ahead to key economic reports due
throughout the week. The yield on the 10-year Treasury inched up by less than 1 basis point to 4.172% & the 2-year Treasury yield was trading up more than 3 basis point higher at 4.931%. Yields & prices have an inverted relationship & 1 basis point equals 0.01%. Investors weighed the latest inflation figures & what it could mean
for Federal Reserve monetary policy as they awaited further economic
data. Fri's producer price index for Jul
had come in at 0.3% on a monthly basis, slightly higher than the 0.2% expected. That marked
the biggest monthly increase since Jan. The reading was at odds with other recent inflation indicators, including the Jul consumer price index that suggested pressures from rising prices may be
easing. Consumer inflation rose by 0.2% on a monthly basis, in line with
expectations & 3.2% from a year ago, which was slightly below the
forecast of 3.3%. There have been mixed messages from Fed officials about what could be on the horizon for policy & whether rates will go higher.
Treasury yields are little changed as investors consider economic outlook
US Steel (X) began a formal review of its strategic options after declining a $7.3B buyout offer from rival steelmaker Cleveland-Cliffs (CLF). CLF
made its offer public after X rejected the bid & announced a
formal review process after receiving
multiple bids for parts or all of its business. "At this
juncture, we cannot determine whether your unsolicited proposal properly
reflects the full and fair value of the Company," CEO David
Burritt wrote in a letter to CLF CEO Lourenco Goncalves. "For all of
the above reasons, the Board has no choice but to reject your
unreasonable proposal." CLF said it "feels
compelled to make its offer publicly known for the direct benefit of all
of U.S. Steel’s stockholders and also make it known that Cliffs stands
ready to engage on this offer immediately." CLF offered to pay $17.50 in cash & 1.023 shares of its
stock for each X share, implying a 42% premium to the closing share price on Jul 28 when Cliffs privately reached out
to the company. A merger between the 2 companies would create a global steelmaking giant & help it become a bigger competitor in an industry largely dominated by China. US Steel stock rose 6.49 (29%).
If you would like to learn more about US Steel, click on this link:
club.ino.com/trend/analysis/stock/X_aid=CD3289&a_bid=6aeoso5b6f7
US Steel rejects $7.3 billion buyout offer from Cleveland-Cliffs
Tesla (TLSA) has once again cut prices in mainland China, a competitive move that sent shares sliding. 2
Chinese versions of its Model Y crossover, priced at 299K &
349K yuan, have been discounted by 14K yuan (around $2000). The
Model 3 will have a “limited-time insurance subsidy” of 8K yuan (around $1100). The insurance subsidy will last until Sep. A ferocious price war between TSLA & domestic Chinese automakers ate into TSLA's margins in Q2-2023 & TSLA has lost ground to domestic competitors, even as it ramps up production in its Shanghai Gigafactory. The stock fell 4.59 (2%).
If you would like to learn more about TSLA, click on this link:
club.ino.com/trend/analysis/stock/TLSA_aid=CD3289&a_bid=6aeoso5b6f7
Tesla shares drop after company announces China price cuts
Dow Jones Industrials
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