Markets march higher after inflation was higher than expected

Dow went up 235 (near session highs), advancers only modestly ahead of decliners & NAZ advanced 246.  The MLP index was up 1+ to the 280s & the REIT index fell 1+ to the 388s.  Junk bond funds fluctuated & Treasuries were little changed.  Oil slid lower in the 77s & gold dropped a big 29 to 2158 as its recent run came to an end (more on both below).

AMJ (Alerian MLP Index tracking fund)

Oracle (ORCL) stock spiked more than 12% during intraday trading & set a record close, a day after the company reported fiscal 3rd-qtr earnings that beat analysts' expectations.  ORCL reported adjusted EPS of $1.41, exceeding the $1.38 that analysts were expecting.  Revenue of $13.28B came up slightly short of the $13B estimate.  The company's cloud services & license support segment, its largest business, saw a 12% sales increase to $9.96B, eclipsing the $9.94B expected.  After the upgrades price targets today, the stock shot up 13.37 (12%) to 125.50.

Oracle shares surge 12% and head for record close

Southwest (LUV) said that it will have to trim its capacity plans & reevaluate its financial forecasts for the year, citing delivery delays from Boeing (BA) a Dow stock, its sole supplier of airplanes.  The Dallas-based airline said BA informed LUV's leaders that it should expect 46 Boeing 737 Max 8 planes this year, down from 58.  It had expected 79 Max planes, including some of the smallest model, the Max 7, which hasn't yet won certification from the Federal Aviation Administration.  Because of the delays, LUV said in a filing that it is “reevaluating all prior full year 2024 guidance, including the expectation for capital spending.”  LUV stock fell 5.02 (15%).

Southwest Airlines cuts capacity, and rethinks 2024 financial forecast, citing Boeing problems

The federal audit of plane manufacturer Boeing (BA) found over 30 failures in the company's operations.  The investigation, launched earlier this year following an incident in which an air panel blew off an Alaska Airlines (ALK) plane mid-flight was conducted by the Federal Aviation Administration.  BA failed 33 aspects of the audit with a total of 97 points of noncompliance & the company passed 56 points of the audit an internal slide presentation produced by the FAA.  Spirit AeroSystems (SPR), which produces parts of Boeing 737 Max planes' fuselage, was also audited & failed 7 of 13 audit points.  The slide presentation reported one instance of SPR mechanics using Dawn liquid soap to lubricate a door seal & cleaning it with a cheesecloth, saying the process was "vague and unclear on what specifications/actions are to be followed or recorded by the mechanic."  The audit was prompted by the Jan 5 incident when a new Boeing 737 Max 9 had its plug door panel blow off during an ALK flight at 16K feet, which caused the cabin to depressurize & the flight to return safely to Portland Intl Airport.  The FAA has given BA 90 days to outline its action plan in response to the audit's findings.  BA stock sank 8.25 (4%).

Boeing reportedly failed 33 out of 89 audits during FAA examination

Gold closed down from a record high as the $ & treasury yields rose after the US reported inflation ran hotter than expected in Feb, raising doubts the Federal Reserve will begin lowering interest rates as soon as Jun.  Gold for Apr closed down $22 to settle at $2166 per ounce, following 7-straight days of fresh record highs.  The US consumer price index rose 3.2% annualized in Feb, up from 3.1% a month early & ahead of the consensus forecast for a 3.1% rise.  Core inflation, which excludes food & energy, rose 3.8%, down from 3.9% in Jan but above expectations for a 3.7% rise.  The report shows US inflation remains well above the Federal Reserve's 2% target, even as some investors expect the central bank to begin cutting interest rates as soon as Jun & the risk of a setback on a strong (CPI) reading is elevated.  The $ rose following the data. with the ICE dollar index last seen up 0.14 points to 103.01 & Treasury yields also climbed, with the 2-year note last seen up 4.0 basis points to 4.601%, while the 10-year note was paying 4.164%, up 6.2 basis points.

Gold Closes Lower Following Seven Record Days as US Inflation Rose More than Expected

West Texas Intermediate (WTI) crude oil closed lower after the US reported inflation rose more than expected last month, while the Energy Information Administration & OPEC issued competing demand forecasts in their monthly outlooks.  WTI crude for Apr closed down 37¢ to settle at $77.56 per barrel, while May Brent crude, the global benchmark, was last seen down 34¢ to $81.87.  The US consumer price index rose 3.2% annualized in Feb, up from 3.1% a month early & ahead of the consensus forecast for a 3.1% rise.  Core inflation, which excludes food & energy, rose 3.8%, down from 3.9% in Jan but above expectations for a 3.7% rise.  The report shows US inflation remains well above the Federal Reserve's 2% target, even as investors expect the central bank to begin cutting interest rates as soon as Jun.  The bearish data comes as the strength of demand remains in question as China's economy struggles, while geopolitical worries persist amid violence in the Middle East.  Still, OPEC kept its 2024 demand-growth forecast intact at 2.25M barrels per day over 2023 unchanged in its Monthly Oil Market Report.  OPEC's rosy outlook is countered by the Energy Information Administration's influential monthly Short-Term Energy Outlook.  The agency sees 2024 demand rising just 1.43M barrels per day over 2023, a small bump upward from its Feb outlook for a 1.42M bpd rise.  The EIA now sees global oil inventories falling by 0.9M barrels per day in the 2nd qtr as it bumped its Brent crude price forecast for this year higher, seeing prices averaging $87.00 per barrel from its $82.00 per barrel it expected a month ago as OPEC+ extended 2.2M bpd of voluntary production cuts thru the 2nd qtr.

WTI Crude Closes Down as US Inflation Ran Hot Last Month

Today's data on inflation & retail sales did not bother the bulls.  But the advance decline ratio was not impressive & gold's streak came to an end.  Tomorrow should be an interesting day in the stock market.

Dow Jones Industrials