Dow climbed 355, advancers over decliners a mild 3-2 & NAZ was up 110. The MLP index fell 2 to the 242s & the REIT index slid back 1+ to the 319s. Junk bond funds were mixed & Treasuries saw more selling, driving yields higher (more below). Oil dropped 2+ to the 82s & gold gained 8 to 2007.
AMJ (Alerian MLP Index tracking fund)
The nation's leading economists stopped short of forecasting a full-blown recession, but they do see headwinds for the US economy. "The October 2023 Business Conditions Survey results suggest a more
challenging business environment as the economy slows," said National
Association of Business Economists (NABE) pres Ellen Zentner, chief
US economist. "Sales are seen as growing but at a
slower pace, and profit margins are reported to be declining" according
to the survey. More participants in the survey, which reflects 3rd-qtr &
near-term views, report falling sales, while fewer report rising sales
over the past 3 months vs the Jul survey. Slowing sales, combined
with declining profit margins, can be a headwind for companies with the
group's NRI index for profit margins falling to the 2nd-lowest
reading since the pandemic. The Federal Reserve is expected to leave rates unchanged at Wed's meeting while leaving the door open for another increase in Dec. NABE
participants, 55%, also cited higher interest rates as one of the
biggest downside risks to their businesses, while 51% named cost
pressures. While the US economy grew by a whopping 4.9% during Q3, many say that it is unsustainable as the lion's share of the
growth came from summer concert-goers & record air travel. Estimates
for 4Q are seen dropping to around 1.5%. Still, while cautious in their outlook, NABE participants believe the
US will be able to side-step a recession with the majority (79%)
forecasting a "probability of 50% or less" of a downturn, up from 71% in
the Jul survey.
Slowing economy presenting more challenges: NABE
McDonald's (MCD), a Dow stock & Dividend Aristocrat,
reported quarterly earnings & revenue that beat expectations as price hikes offset falling traffic to its US restaurants. Despite
higher menu prices in some regions, execs said that the burger
chain is still beating rivals across most of its biggest markets when it
comes to consumers' perception of value & affordability. “It’s
clear that our customers continue to seek reasonably priced meals as
rising costs persist, and our markets around the world continue to
respond,” CFO Ian Borden said. The fast-good giant reported 3rd-qtr EPS of $3.17, up from $2.68 a
year earlier. Excluding items, EPS was $3.19. Revenue rose 14% to $6.7B. Global same-store sales grew 8.8% in
the qtr, beating estimates of 7.8%. US same-store sales increased 8.1%, fueled by strategic
price increases. Execs said they expect pricing will be up about
10% for 2023, but 3rd-qtr menu prices came down slightly. The
chain also credited its marketing campaigns & digital & delivery
orders for its sales growth. US traffic fell, marking the first qtr this year that
the metric dipped. Across the restaurant industry, consumers making less
than $45K visited less often, accounting for the drop in its
traffic, according to CEO Chris Kempczinski. The stock advanced 4.04.
If you would like to learn more about MCD, click on this link:
club.ino.com/trend/analysis/stock/MCD_aid=CD3289&a_bid=6aeoso5b6f7
McDonald’s revenue climbs 14% as price hikes boost U.S. sales
Treasury yields rise as investors look to Fed meeting, key data due this week
Investors are feeling good about the Fed meeting at mid week, although the advance decline ratio is only modest. This week there will also be important economic reports as well as more earnings. Expect a choppy time for the stock market.Dow Jones Industrials
No comments:
Post a Comment