Markets edge higher ahead of key earnings reports

Dow went up 105, decliners barely ahead of advancers & NAZ gained 131.  The MLP index was flat at 290 & the REIT index added 2+ to the 428s.  Junk bond funds slid lower & Treasuries had a little selling which raised yields.  Oil dropped 1+ to the 74s after China offers little detail on stimulus plans & gold declined 13 to 2663.

Dow Jones Industrials

It's been just over a month since more than 30K Boeing (BA), a Dow stock, machinists walked off the job after overwhelmingly voting down a tentative contract.  Costs & tensions have only risen since then.  The strike is adding to pressure on its new CEO, Kelly Ortberg, who was brought in over the summer to solve the plane maker's various troubles.  The strike, which S&P Global Ratings estimates costs BA more than $1B a month, bookends an already difficult year that started with a near-catastrophic blowout of a 737 Max door plug & comes 6 years after the first of 2 fatal Max crashes put the storied manufacturer in constant crisis mode.  The union & company remain at an impasse, & airplane production at factories in the Seattle area & other locations has been idled, depriving BA of cash.  BA last week pulled a sweetened contract offer that the union had rejected, saying it wasn't negotiated.  BA officials had been upbeat to airline customers about getting to a deal in the weeks before the original vote.  But that optimism didn't pan out, as workers on Sep 13 voted 95% against an initial tentative labor deal.  The process of ending strike has turned more fraught, with federally mediated talks breaking down mid-week.  Late Fri, Jon Holden, pres of the striking workers' union, IAM District 751, pushed for a return to negotiations.  “CEO Ortberg has an opportunity to do things differently instead of the same old tired labor relations threats used to intimidate and crush anyone that stands up to them,” he said.  “Ultimately, it will be our membership that determines whether any negotiated contract offer is accepted. They want a resolution that is negotiated and addresses their needs.”  The stock fell 2.16.

Boeing factory strike crosses 1-month mark as pressure mounts on new CEO

America's middle class is feeling the squeeze like never before.  Primerica''s latest Financial Security Monitor report for the 3rd qtr found 55% of middle-income households now rate their personal financial situation negatively, a 6-point jump from the previous survey.  "For the first time in a year, a majority of middle-income households are feeling negative about their personal finances," said Glenn Williams, CEO of Primerica.  "In fact, this latest report represents the highest negative rating we’ve seen since we began fielding the survey exactly four years ago."  Middle-income households' view of the economy has deteriorated, too, over the past 3 months.  A significant majority, 73%, said they have a negative view of the nation's economic health, up 1 point from the prior reading.  The findings also indicated growing uncertainty about the economy, with 34% saying they are unsure about the economy's direction, a sharp increase of 15 points from last qtr.  The survey polled households making $30-130K annually, & 40% of respondents cited inflation as their top worry, up 8% from the previous quarterly survey.  The Labor Dept said the consumer price index (CPI), a broad measure of how much everyday goods like gasoline, groceries & rent cost, rose 0.2% in Sep from the prior month & was up 2.4% from a year ago.  High inflation has created severe financial pressures for most US households, which are forced to pay more for everyday necessities like food & rent.  Price hikes are particularly devastating for lower-income Americans, because they tend to spend more of their already-stretched paycheck on necessities & therefore have less flexibility to save money.  "Families continue to list inflation as their No. 1 concern, with the stress it brings spilling over into worry about being able to afford everyday essentials like food or groceries and going to the doctor as well as managing their rising credit card debt," Williams said.  Concerns about credit card debt among middle-income Americans is also on the rise.  44% said they are more worried about their credit card debt than they were a year ago, which is a 9% jump from last qtr & the highest level of concern since the question was first introduced in Mar 2023.  "The results of our survey reflect the accumulating financial stress middle-income families are facing," Williams said.  "Recent cost of living increases are slowing and we have to remember many fell behind financially and are still recovering."

Middle-income households' with negative view of their personal finances surges to new high

The European Central Bank (ECB) is on course to deliver its 3rd interest rate cut of the year at its meeting this Thurs, as policymakers say inflation risks are easing faster than previously expected.  Headline price rises in the euro area cooled to 1.8% in Sep, below the central bank's 2% target.  Core inflation, which strips out the more volatile components of energy, food, alcohol & tobacco, hit a 2½ year low of 2.7%.  Those figures have broadly continued to fall even after the ECB cut interest rates by 25 basis points in Jun & again by the same amount in Sep, with the central bank taking its key rate, the deposit facility, from a record high of 4% down to 3.5% across the 2 sessions.  Today money markets had priced in not only another 25-basis-point reduction during the Oct meeting, but also a follow-up cut to 3% at its next & final gathering of the year in Dec.  Expectations for faster monetary easing have built since the ECB's Sep 12 meeting, amid a series of dovish comments from officials & cooler-than-expected inflation prints from euro area states, including Germany.  Bank of France Governor Francois Villeroy de Galhau last week described an Oct rate cut as “very likely” & said such a step “won’t be the last.”  “Victory against inflation is in sight,” Villeroy told radio station France Info, noting that some volatility & upticks in the headline rate could follow.

European Central Bank set for third interest rate cut of the year in meeting this week

Stocks rose to fresh record highs as investors prepare for more big bank earnings to test the rally & the chances of an economic soft landing.  Tech stocks led the gains although advancers & decliners were pretty much equal.  Earnings reports will take center stage this week.