Markets rise cautiously after Israeli strike on Iran

Dow rose 152, advancers over decliners better than 3-1 & NAZ dropped 132.  The MLP index advanced 5 to the 281s & the REIT index was up 1+ to the 353s.  Junk bond funds were a little higher & Treasuries had buying which reduced yields (more below).  Oil edged up to the 83s & gold added 6 to 2404.

AMJ (Alerian MLP Index tracking fund)

Israel launched a limited direct military attack on Iranian soil early Fri morning (local time), marking the latest escalation in a series of back-&-forth strikes between the 2 foes.  Iranian state media outlets reported explosions in the central Iranian city of Isfahan, but officials in the country have said they were caused by air defenses shooting down drones.  The news comes days after Iran launched its first-ever direct attack on Israel in the form of more than 300 drones & missiles, which were mostly intercepted by Israeli air defenses & caused no deaths. Tehran said the attack was retaliation for an Israeli strike on an Iranian diplomatic compound on Apr 1 that killed 2 senior Iranian generals, among others.  What comes next may now depend on Iran's response, & whether diplomatic measures are taken by outside parties to de-escalate.  Markets reacted to the news, with oil prices jumping more than 3% on fears of what has thus far been more of a shadowy proxy war breaking out into the open.  Safe haven assets also rose, with spot gold prices surging to a fresh all-time high of $2411 while future stock indices had sharp drops.  In the overnight futures market, Dow dropped more than 500 on thin trading in a very hectic market.

Israel carries out limited strike against Iran

Procter & Gamble (PG), a Dow stock & Dividend Aristocrat, reported mixed quarterly results as it struggles to bring back shoppers after 2 years of hiking prices across its portfolio, from Tide detergent to Charmin toilet paper.  Its prices were up 3% compared with the year-ago period, although CFO Andre Schulten said that PG didn't institute any nationwide price hikes during the qtr.  Despite its disappointing sales, the consumer giant raised its full-year outlook for earnings growth.  Fiscal 3rd-qtr net income attributable rose to $1.52, up from $1.37 a year earlier.  Net sales rose 1% to $20.2B.  Organic sales, which strip out acquisitions, divestitures & foreign currency, increased 3% in the qtr.  But the company's quarterly volume was flat for the 2nd consecutive qtr.  In Oct, execs said they anticipated returning to volume growth in fiscal 2024.  3 qtrs in, the company hasn't yet lured back many of the customers it scared away with its price hikes over the last 2 years.  For the full year, PG is expecting core net EPS growth of 10-11%, up from its prior range of 8-9%.  The company also raised its projection for unadjusted EPS growth to a range of 1-2%, up from its previous forecast of down 1% to flat.   PG maintained its outlook of 2-4% sales growth in 2024.  PG also now expects a $900M benefit from favorable commodity costs, up from its previous outlook of $800M.  That's a reversal from the last 2 fiscal years, when commodity costs weighed on the company, leading to price hikes.  The stock fell 1.35.

Procter & Gamble sales disappoint as price hikes slow down

Treasury yields declined as investors sought safety following a strike by Israel against Iran, while they considered the latest economic data & remarks from Federal Reserve officials.  The yield on the 10-year Treasury was down by over 6 basis points at 4.586% & the 2-year Treasury yield was last at 4.964% after falling by almost 3 basis points.  Yields & prices move in opposite directions & 1 basis point is equivalent to 0.01%.  Israel conducted a limited strike against Iran.  Earlier, Iran’s Fars news agency reported explosions were heard near the airport at the country's central Isfahan city, but the reason was unknown.  Investors also digested the latest economic data & remarks from policymakers as they considered the outlook for interest rates.  Fed officials have in recent days & weeks indicated that interest rates may remain elevated for longer than previously anticipated.  “I definitely don’t feel urgency to cut interest rates,” New York Fed Pres John Williams said yesterday, adding that this position was linked to strength in the economy.  Interest rates would eventually need to be cut, but that would depend on how the economy develops, he added.  Atlanta Fed Pres Raphael Bostic said rate cuts may not come until the end of the year & that he was “comfortable being patient,” while Minneapolis Fed Pres Neel Kashkari suggested rate cuts may not begin until 2025.  The comments echo those of other Fed policymakers, including Chair Jerome Powell.

Yields fall as investors weigh economic data, Israel strike against Iran

After wild trading in the overnight market, the stock market relaxed (except for selling in tech stocks).  In the short term, investors are willing to wait & see what happens.  But all is not well with nervous investors keeping gold at record levels.

Dow Jones Industrials