Dow was up 105, advancers over decliners about 3-1 & NAZ added 33. The MLP index remained in the 281s & the REIT index rose 3+ to the 367s. Junk bond funds drifted lower & Treasuries had more buying which lowered yields. Oil slid back fractionally to 78 & gold was off 5 to 2325.
AMJ (Alerian MLP Index tracking fund)
Federal Reserve Bank of New York Pres John Williams said that the central bank's next move will likely be to lower interest rates, though he didn't specify a timeline for when that will occur. "Eventually we'll have rate cuts," but monetary policy is in a "very good place" for the time being, Williams added. His comments come after last week's meeting of the Federal Open Market Committee (FOMC), which sets monetary policy. Fed officials maintained the benchmark federal funds rate at 5.25 - 5.50% & signaled it's likely to remain there for some undefined period while they look for additional evidence inflation is falling toward the central bank's 2% target. Williams, a voting member of the FOMC, didn't offer a timeline for reducing interest rates from the highest level in 23 years, given that the Fed's favored metric shows that inflation is running at a 2.7% pace, well above the target rate. When excluding food & energy, underlying core inflation came in even hotter at 2.8%. He said that he expects that US GDP will rise 2-2.5% this year after the economy expanded more rapidly last year. Williams also said the Fed's efforts to shrink the size of its balance sheet have gone well & haven't rattled financial markets. The FOMC post-meeting statement last week said they will need "greater confidence" that inflation is coming down before easing monetary policy. It added, "In recent months, there has been a lack of further progress toward the committee's 2 percent inflation objective." Federal Reserve Chair Jerome Powell said that despite signs that inflation isn't coming down as quickly as hoped or may even be heating back up, the Fed isn't likely to raise interest rates in response. "I think it's unlikely that the next policy rate move will be a hike," Powell said after the meeting. "We don't see evidence that policy isn't restrictive."
Fed president says next move likely to lower rates, but timing uncertain
Disney (DIS), a Dow stock, 2nd-qtr earnings beat analyst estimates after narrowing streaming losses & revenue was in line with expectations. Total segment operating income jumped 17% as the entertainment streaming applications, Disney+ & Hulu, turned a profit in the qtr for the first time. When combined with ESPN+, the streaming businesses lost $18M, much narrower than the $659M loss the division reported a year earlier. Entertainment streaming revenue (excluding ESPN+) rose 13% to $5.64B & operating income was $47M after a loss of $587M a year prior. DIS credited increased Disney+ subscribers & higher average revenue per user for the gains. Disney+ Core subscribers increased by more than 6M in the 2nd qtr to 117.6M global customers. Total Hulu subscribers grew 1% to 50.2M & ESPN+ subscribers fell 2% to 24.8M. EPS was $1.21 adjusted vs $1.10 expected & revenue was $22.08B vs $22.11B expected. “Our results were driven in large part by our Experiences segment as well as our streaming business,” CEO Bob Iger said. “Importantly, entertainment streaming was profitable for the quarter, and we remain on track to achieve profitability in our combined streaming businesses in Q4.” DIS reported a loss attributable to the company of 1¢ per share, compared with EPS of 69¢ in the year-earlier period. Adjusting for restructuring & impairment charges, among other things, EPS was $1.21 & revenue rose to $22.08B, up 1% from a year earlier. The stock sank 11.36 (10%) after the company said it expects weaker results in that segment for the current qtr.
Disney earnings top analyst estimates as streaming nearly breaks even in the quarter
After years of inflation under Pres Biden, Americans have lost faith in his ability to save the economy, according to a new poll. In a Gallup poll, only 38% of Americans said they still had confidence in Biden to lead the country and do the right thing for America’s economy. This figure is among the lowest Gallup has measured for any president since George W Bush took office in 2001, Gallup reported. "With Americans less optimistic about the state of the U.S. economy than they have been in recent months and concern about inflation persisting, their confidence in President Biden to recommend or do the right thing for the economy is among the lowest Gallup has measured for any president since 2001," Gallup reported. The current low for Biden continues a substantial fall from when he first took office. As recently as 2022, the same poll found Biden's confidence ratings were at 57%. It swiftly fell to 40% & has remained below that mark since. While Biden faces a skeptical public & abysmal approval numbers, confidence scores for Federal Reserve Chair Jerome Powell, as well as Rep & Dem leaders in Congress, were among those who garnered confidence ratings below 50%. Presumptive Rep presidential nominee former Pres Trump barely missed the 50% mark, as 46% of US adults say they have "a great deal" or "a fair amount" of confidence in him to do or recommend the right action to boost the economy. This rating is essentially tied with the support he had during his last year in office. In 2009, over 70% of those polled expressed enthusiasm for Obama (71). That support dropped to 42% by 2014, before gaining back a few points & ending at 50% during his last year in office. Biden's first 3 years in office followed a similar pattern. Tasked with helping lift the US economy during the COVID-19 pandemic years, a whopping 57% said they were confident in Biden’s ability to do the job. Now, just 38% say the same. "Only Bush earned lower confidence from Americans than Biden has since last year – by the end of his second term, amid the last recession, when just 34% of Americans expressed confidence in his economic abilities," Gallup reported. The poll also found that confidence in lawmakers from both parties is down in recent years. Dems garnered 38% support, an uptick from 34% in 2023. Reps continued a slight slump, from 40% in 2022 to 36% in this poll.
Confidence in Biden's ability do the right thing for America’s economy sinks to historical low
The stock market is meandering, looking for direction. So far, Dow has recovered 1100 in May after last month's selloff. Meanwhile the economy is growing at a mediocre rate while interest rates remain elevated.
Dow Jones Industrials
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