Markets nudged up ahead of inflation data and earnings

Dow went up 55, advancers over decliners better than 3-2 & NAZ added 58.  The MLP index edged up 1 to the 291s & the REIT index was steady in the 377s.  Junk bond funds inched higher & Treasuries had limited selling which allowed yields to ease higher (more below).  Oil slid back into the 82s as Israel-Hamas cease-fire talks ease supply worries (more below) & gold fell 16 to 2381.

Dow Jones Industrials 

Treasury yields were higher as investors looked ahead to key economic data due throughout the week, including fresh inflation insights.  The yield on the 10-year Treasury was up by less than 1 basis point at 4.281% & the 2-year Treasury yield also climbed more than 2 basis points to 4.62%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Data released Fri showed that nonfarm payrolls increased by 206K in Jun, more than the forecast of 200K.  Jun's jobs report also showed that the unemployment rate unexpectedly rose to 4.1% rather than holding steady at 4% as expected.  The data comes at a time when uncertainty about when interest rate cuts could begin remains widespread.  Minutes from the Fed's latest meeting last week showed that policymakers are looking for more evidence that inflation is easing before deciding to move rates.  Jun's consumer price index is slated for this week & could provide clues about when the first rate cut could come, depending on whether the data suggests inflation is easing back to the Fed's 2% target.  The producer price index, which tracks wholesale inflation, is also due this week & Federal Chair Jerome Powell is expected to give testimony about expectations for the economy & monetary policy before Congress.

Treasury yields rise as investors look to inflation data due in week ahead

Record summer air travel demand isn't translating to record US airline profits.  Carriers will have to answer for that disconnect when they report quarterly results this month.  Some airlines have forecast record demand, & in some cases, revenue.  Yesterday, the Transportation Security Administration screened more than 3M people, a 1-day record.  But higher labor & other costs have eaten into airlines' bottom lines.  To adapt to slower demand growth & other challenges, some carriers have slowed if not halted hiring compared with hiring sprees when they rebuilt after the pandemic.  And some airlines are facing delays of new, more fuel-efficient aircraft from Airbus & Boeing (BA), a Dow stock, at the same time that a Pratt & Whitney engine recall has grounded dozens of jets.  Yet US airlines have increased capacity, flying about 6% more seats in Jul than they did in Jul 2023, according to aviation data firm OAG.  The expansion is keeping airfare in check  stocks in the sector have fallen behind the broader market.  The NYSE Arca Airline Index, which tracks 16 mostly US airlines, is down almost 19% this year, while the S&P 500 has advanced more than 16%.  BA went up 3.84.

Air travel demand is breaking records. Airline profits are not

US crude oil futures fell nearly 1% as traders monitored the impact of Hurricane Beryl on Gulf Coast refining, production & export infrastructure.  Beryl made landfall near Matagorda, Texas, as a Category 1 hurricane with maximum sustained winds of 80 miles per hour, according to the National Hurricane Center.  Matagorda is about 150 miles northeast of Corpus Christi, a leading crude export facility in the US.  US crude oil closed lower on Fri while still booking a 4th consecutive weekly gain, as traders took advantage of recent prices after the benchmark touched a 2-month high of $84.52 per barrel.  West Texas Intermediate Aug contract was $82.51 down 65¢ (0.8%), & YTD US oil gained 15.1%.  Brent Sep contract was $86.02 per barrel, down 52¢ (0.6%) & YTD the global benchmark is ahead 11.6%.  The storm is not expected to affect either supply or price to any significant degree.

U.S. crude oil prices fall nearly 1% as market tracks path of Hurricane Beryl

Powell's comment to Congress on Wed will be followed by the Jun inflation data.  In addition new govs in UK & France along with ceasefire talks in the Mideast will be watched by investors.