Dow dropped 80, decliners over advancers 3-1 & NAZ went up 24. The MLP hardly budged, index staying near 246 & the REIT index was off 3+ to the 339s. Junk bond funds fluctuated & Treasuries saw selling which brought higher yields (more below). Oil was up 1+ to the 84s & gold slid back 2 to 1884.
AMJ (Alerian MLP Index tracking fund)
Inflation rose more than expected in Sep thanks to a jump in food & housing costs, underscoring the challenge of taming price pressures
within the economy. The Labor Dept said that the consumer price index, a
broad measure of the price for everyday goods including gasoline,
groceries & rents, rose 0.4% in Sep from the previous month,
more than expected. Prices climbed 3.7% from the same time last
year, matching the Aug reading & coming in slightly higher than the
3.6% projected. Stubbornly high inflation has created severe financial pressures
for most US households, which are forced to pay more for everyday
necessities like food & rent. The burden is disproportionately borne
by low-income Americans, whose already-stretched paychecks are heavily
affected by price fluctuations. The data indicates that while
inflation has fallen from a peak of 9.1%, it remains well above the
Fed's 2% target, despite an aggressive interest-rate hike campaign. The
central bank has approved 11 rate hikes over the course of 16
months, lifting the federal funds rate to the highest level since 2001.
Inflation rises more than expected in September as high prices persist
Treasury yields rose as investors weighed fresh economic data pointing to stubbornly high inflation. The yield on the 10-year Treasury was higher by about 6 basis point at 4.655%, off its lows from earlier in the session. The 2-year Treasury yield was last trading at 5.077% after rising by 7 basis points. Yields & prices move in opposite directions & 1 basis point is equivalent to 0.01%. The CPI report comes a day after the release of hotter-than-expected wholesale prices data & could inform the Federal Reserve's next monetary policy decision & thereby influence whether the central bank will hike interest rates higher or not. Minutes from the Fed's last meeting released yesterday indicated that officials expect restrictive policies to remain in place until they are sure inflation is headed back down toward the 2% target range. Policymakers were however divided on whether further interest rate hikes will be needed to achieve this. The difference in opinion has also been reflected in comments from Fed speakers in recent weeks, with some leaving the door to further rate hikes open while others indicated they believe rates have been raised sufficiently.
Treasury yields tick higher after fresh CPI report
The United Auto Workers (UAW) union launched an unexpected strike against Ford (F) at the it's highly profitable SUV & pickup truck plant in Kentucky. The
strike was at Ford's Kentucky Truck
Plant, where the automaker produces Ford Super Duty pickups as well as
the Ford Expedition & the Lincoln Navigator SUVs. The facility employs
8700 UAW members. The
strike at the plant, Ford's largest in terms of employment & revenue, marks a major escalation in the UAW's targeted, or “stand-up,”
strikes. It also represents a shift in strategy now in the 4rth week
of expanded strikes. For previous work strikes, UAW Pres Shawn Fain
has publicly announced the targets before the work stoppages occur. A UAW source with knowledge of the talks said Ford did not add any
additional cash to its proposed deal, which provoked the strike
escalation. The source added the union was expecting Ford to enhance its
prior economic offer. Ford said the “decision by the UAW to call a strike at Ford's Kentucky
Truck Plant is grossly irresponsible but unsurprising given the union
leadership's stated strategy of keeping the Detroit 3 wounded for months
through ‘reputational damage’ & ‘industrial chaos.’” The stock fell 21¢.
If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F_aid=CD3289&a_bid=6aeoso5b6f7
UAW launches strike against Ford’s Kentucky truck plant, signaling major escalation in labor fight
Dow's recovery in Oct has stalled this week (see below). Economic headwinds such high inflation, an auto strike, the Med East war & funding the federal gov are not going away sometime soon. Investors are frustrated.
Dow Jones Industrials
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