Dow went up 34, advancers over decliners 3-2 & NAZ slid back 69. The MLP index was fractionally lower to the 248s & the REIT index rebounded 7+ to the 326s. Junk bond funds were little changed & Treasuries had buying which reduced yields (more below). Oil dropped 1+ to 84 & gold was off 6 to 1988.
AMJ (Alerian MLP Index tracking fund)
The US economy grew even faster than expected in the 3rd qtr, buoyed by a strong consumer in spite of higher interest rates, ongoing inflation pressures, & a variety of other domestic & global headwinds. Gross domestic product (GDP), a measure of all goods & services produced in the US, rose at a seasonally adjusted 4.9% annualized pace in the Jul-Sep period, up from an unrevised 2.1% pace in the 2nd qtr, the Commerce Dept reported. The forecasts had been looking for a 4.7% acceleration in GDP, which also is adjusted for inflation. The sharp increase came due to contributions from consumer spending, increased inventories, exports, residential investment & gov spending. Consumer spending, as measured by personal consumption expenditures, increased 4% for the qtr after rising just 0.8% in Q2. Gross private domestic investment surged 8.4% & gov spending & investment jumped 4.6%. Spending at the consumer level split fairly evenly between goods & services, with the 2 measures up 4.8%& 3.6%, respectively. The GDP increase marked the biggest gain since the 4th qtr of 2021. While the report could give the Federal Reserve some impetus to keep policy tight, traders were still pricing in no chance of an interest rate hike when the central bank meets next week, according to CME Group data. Futures pricing pointed to just a 27% chance of an increase at the Dec meeting following the GDP release.
U.S. GDP grew at a 4.9% annual pace in the third quarter, better than expected
The United Auto Workers (UAW) union
& Ford (F) announced a tentative new labor deal with Ford aimed at
bringing to an end the union's strike which is currently in its 6th
week. The
UAW initially sought pay raises for union autoworkers amounting to 40%
over the course of a 4-year contract, as well as a 32-hour work week & enhancements to benefits – while the automakers initially offered
raises closer to 20% over a new contract with about 10% provided upon
ratification of the new contract. Ford & the UAW agreed to
raise wages by 25% over the 4½ year contract with
cost-of-living adjustments & an immediate 11% raise upon ratification. The agreement between Ford & the UAW would be tentative until it's
ratified by the union's membership thru a majority vote. About 57K Ford workers
are represented by the union & about 17K of whom are currently on
strike while 3K were temporarily laid off due to the strike. "We
are pleased to have reached a tentative agreement on a new labor
contract with the UAW covering our U.S. operations," Ford CEO Jim Farley said. "Ford is proud to assemble the
most vehicles in America and employ the most hourly autoworkers. We are
focused on restarting Kentucky Truck Plant, Michigan Assembly Plant and
Chicago Assembly Plant, calling 20,000 Ford employees back to work and
shipping our full lineup to customers again." "Today, we reached a
tentative agreement with Ford – for months we said that record profits
mean record contracts," UAW Pres Shawn Fain said. "And UAW family,
our stand up strike has delivered." UAW VP Chuck
Browning added that, "We are calling on all Ford strikers to go back to
work while we vote on our tentative agreement. Like everything we've
done in this stand up strike, this is a strategic move to get the best
deal possible. We're going back to work at Ford to keep the pressure on
Stellantis and GM. The last thing they want is for Ford to get back to
full capacity while they mess around and lag behind." The stock rose 3¢.
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 and Ford reach tentative deal on new labor contract
The 10-year Treasury yield hovered near the key 5% level as investors assessed a stronger-than-expected GDP report. The yield on the 10-year Treasury fell about 5.1 basis points to 4.901% & the 2-year Treasury yield was at 5.06% after falling by 6.3 basis points. Yields & prices have an inverted relationship & 1 basis point equals 0.01%. 3rd qtr GDP showed a 4.9% rise, better than the 4.7% increase expected. The strong economic reading validated the rapid rise in Treasury yields in recent months. The 10-year Treasury yield topped 5% this month, up from about 3.8% at the start of the 3rd qtr. Weekly jobless claims out & indicated a possible slowdown ahead. Jobless claims for last week came in at 210K, greater than the consensus estimate of 207K claims. The data comes ahead of the Fed's next rate decision on Nov 1. They are widely expected to keep rates unchanged, but the central bank may be hesitant to indicate it is done hiking for good after this strong GDP reading. Last week, Fed Chair Jerome Powell said that inflation is still too high despite easing slightly recently & slower economic growth is likely needed for it to return to the central bank's 2% target.
10-year Treasury yield hovers near 5% after strong GDP report
Dow Jones Industrials
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