Dow went up 123, advancers over decliners 2-1 & NAZ gained 61. The MLP index crawled higher to the 244s & the REIT index bounced back 5+ to the 327s after recent selling. Junk bond funds & Treasuries finished about even. Oil retreated 1+ to the low 81s & gold dropped 10 to 1995 (more below on both).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
For the 3rd month in a row, the Conference Board's Consumer Confidence Index fell dropping to 102.6 in Oct from an upwardly revised 104.3 in Sep. The index is at its 2nd-lowest level this year, landing a hair above May's 102.5 reading. Oct's decline came as “consumers continued to be preoccupied with rising prices in general, and for grocery and gasoline prices in particular,” Dana Peterson, chief economist at the Conference Board, said. “Consumers also expressed concerns about the political situation and higher interest rates,” she said, adding that the Israel-Hamas war also impacted consumers' views on the economy. The decline in consumer confidence was not evident across all age groups & household income levels. Consumers below the age of 35 felt slightly more optimistic about the state of the economy this month than last & people above the age of 55 exhibited the biggest monthly decline in consumer confidence. Meanwhile, consumers with a household income $25K-35K saw the biggest decline in confidence about the economy over the past month. In contrast, consumers with a household income between $100K-$125K saw the biggest jump in confidence over the past month.
Consumer confidence drops for third consecutive month
Pfizer (PFE) reported a narrower-than-expected adjusted loss for the 3rd qtr as the drugmaker recorded charges largely related to struggles for its Covid antiviral treatment Paxlovid & the Covid vaccine. PFE recorded a $5.6B charge for inventory write-offs in the 3rd qtr due to lower-than-expected use of Covid products. Of these previously announced write-offs, $4.7B is chalked up to Paxlovid & $900M is attributed to the company's vaccine. The pharmaceutical giant also reiterated the full-year adjusted earnings & revenue guidance it announced 2 weeks ago, which is drastically lower than its initial projections
due to weakening demand for its Covid products. That decline in demand
also led PFE to announce a sweeping $3.5B cost-cutting plan at
the same time. Those efforts were seen as necessary to shore up investor sentiment as its rivals struggle to navigate the rapid decline of their Covid businesses, which
are transitioning to the commercial market in the US this year. 3rd-qtr revenue of $13.2B, was down 42% from the same
period a year ago, due to the decline in sales of its Covid products. The
company's Covid vaccine raked in $1.3B in sales, down 70% from
the year-ago qtr. The forecast expected the shot to bring in $1.5B in sales. Paxlovid posted
$202M in revenue, a drop of 97%. Analysts had expected $613M in sales of the drug. Together, the products pulled in around $1.5B in revenue for the qtr. That compares with roughly $12B in sales during the same period a year ago. For
the 3rd qtr, PFE booked a net loss of $2.38B, or 42¢ per share. That compares to a net income of $8.61B, or
$1.51 per share, during the same period a year ago. Excluding
certain items, the loss per share was 17¢ for the
qtr. The inventory write-offs of Covid products accounted for an 84¢ per share adjusted loss CFO David Denton said. PFE reiterated the guidance it outlined in Oct. The company
expects 2023 sales of $58-61B & full-year adjusted EPS of $1.45-1.65. The company anticipates that its Covid vaccine will rake in $11.5B in sales this year. The stock was unchanged.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE_aid=CD3289&a_bid=6aeoso5b6f7
Pfizer swings to loss due to Paxlovid, Covid vaccine write-offs
The World Bank is warning that the prices of oil & other commodities could see "large increases" if the Israel-Hamas war spreads thru the Middle East. The institution said in its Oct 2023 Commodity
Markets Outlook report that despite commodity markets responding
"calmly" to the war, "historical precedent" suggests that escalating conflict in the region could substantially disrupt commodity supply. "Although
neither Israel nor Gaza is a major energy producer, an escalation of
the conflict and its spread to the wider region could lead to large
increases in the prices of oil and other commodities," the report says. "Historical precedent also indicates this could have destabilizing
implications for the global economy. Moreover, spillovers to food prices
could exacerbate food insecurity in conflict-afflicted areas in the
region and around the world." If that happens, depending on the
level of impact to the global oil supply, the World Bank says prices per
barrel could rise from the 2023 Q4 baseline forecast of $90 a barrel to
around $102 in a "small disruption scenario" to as much as $157 a
barrel in a "large disruption scenario." "These types of disruptions in oil supplies can have a cascading
impact on the prices of other commodities – especially natural gas
prices, which are even more susceptible to transportation disruptions
than oil," the World Bank also says. As many as
9400 people have been killed in the war on both sides, including at
least 1400 Israeli civilians & soldiers & 33 Americans. An Israel Defense Forces spokesperson said more troops have been pouring into Gaza to fight terrorists there.
Oil prices could see 'large increases' if conflict spreads, World Bank warns
Gold fluctuated after renewed Israeli shelling of sites in Lebanon fueled geopolitical tensions, while data from the US pointed to a hot economy. Israel's army fired at targets near the border between the countries, according to the state-run National News Agency. Gold futures fell as the $ strengthened. The most active gold contract for Dec fell $11 (6%), to close at $1994 per ounce. Conflict between Israel & Hamas continued to lend support to gold. Investors are also waiting for results of the Federal Reserve monetary policy meeting tomorrow, as well as US monthly jobs report on Fri. Economic data released yesterday were mixed. The Labor Dept reported that US employment cost index climbed 1.1% in the 3rd qtr of 2023 from the 2nd qtr, slightly faster than 1% expected. The S&P CoreLogic Case-Shiller National Home Price NSA Index, covering all 9 US census divisions, reported a 2.6% annual change in Aug, up from a 1% change in Jul. The Chicago Business Barometer, also known as the Chicago PMI, inched down to 44 in Oct from 44.1 in Sep. The forecast expected a 45.3 reading.
Gold Falls On Stronger U.S. Dollar
West Texas Intermediate (WTI) crude oil closed at the lowest in 2 months as worries over a spreading war fade while Europe's inflation fell to the lowest in 2 years as the Euro Zone economy slows, cutting into demand. WTI crude for Dec closed down $1.29 to settle at $81.02 per barrel, the lowest since Aug 29. Dec Brent crude, the global benchmark, closed down 4¢ to $87.41. While Israel's ground invasion of the Gaza Strip continues, worries that the war will spread to other Middle East countries, disrupting oil exports, are fading & the war premium added to oil prices is fading. The market's focus is returning to supply & demand factors, with today's drop coming as European inflation fell to the lowest in 2 years in Oct, dropping to 2.9% from 4.3% last month amid a slowing Euro Zone economy.
WTI Crude Oil Falls To A Two-Month Low As The War Premium Fades
Oct was another dreary month for stocks, although a modest rally at month's end trimmed the loss. It seems like what is a ton of negative news, starting with 2 major wars & high inflation, is not going away soon. Dow lost 455 in Oct, but at least it finished barely above 33K.Dow Jones Industrials
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