Dow rose 76, advancers over decliners 5-2 & NAZ went up 119. The MLP index added 3+ to the 315s & the REIT index was even in the 437s after yesterday's big advance. Junk bond funds fluctuated & Treasuries were flattish. Oil soared 5+ to the 101s & gold gained another 9 to 1778.
AMJ (Alerian MLP index tracking fund)
The Federal Reserve's preferred inflation gauge accelerated more than expected in Jun, according to new data released, a worrisome sign as central bankers try to combat higher prices with the steepest interest rate hikes in decades. The personal consumption expenditures index (PCE) showed that core prices, which strips out the more volatile measurements of food & energy, climbed 0.6% from the previous month & rose 4.8% on an annual basis, according to the Commerce Dept. Those figures are both higher than the 0.5% monthly increase & 4.7% annual increase forecast. The more encompassing headline figure rose 6.8% on an annual basis, hitting a fresh 40-year high as gas prices surged, while inflation jumped 1.0% from May to Jun, tying its biggest monthly gain since 1981. While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%, Chair Jerome Powell told reporters this week that core data is actually a better indicator of inflation. "Core inflation is a better predictor of inflation going forward," Powell said on Wed. "Headline inflation tends to be volatile." The latest report also showed that consumer spending jumped 1.1% last month, higher than expected. However, nearly all of that increase actually stemmed from higher prices, not consumers buying more: Adjusted for inflation, consumer spending rose by just 0.1%. Personal income, meanwhile, climbed 0.6%, beating the 0.5% estimate, but disposable income adjusted for inflation dropped 0.3%. In another troubling indication that inflation is broadening throughout the economy, the employment cost index – which measures wages & benefits for civilian workers – rose 1.3% in the period in Apr-Jun. While that's down slightly from the first 3 months of the year, when compensation grew 1.4%, the data suggests that wage pressures remained strong in the spring as the result of an incredibly tight labor market.
Fed's preferred inflation gauge climbs 4.8% in June, holding near 40 year high
Intel's stock (INTC), a Dow stock, is down 11%, a day after the company reported disappointing Q2 earnings that missed on the top & bottom lines. Revenue declined 22% year over year & missed consensus by 14%, the
company's largest top-line disappointment since 1999. It ended the qtr with a $454M net loss,
compared with net income of $5B in the year-ago qtr. The
company also lowered its full-year expectations. INTC sees
full-year adjusted EPS of $2.30 & revenue of $65-68B, which is lower than guidance from 3 months
ago. The updated forecast factors in economic weakness that might
result in organizations putting off PC refresh cycles, CFO David Zinsner said. He said small &
medium-sized businesses have slowed down their computer purchasing, but
the enterprise has been holding up. “We do think we’re on the bottom,” Zinsner said. The stock dropped $4.10.
If you would like to learn more about INTC, click on this link:
club.ino.com/trend/analysis/stock/INTC?a_aid=CD3289&a_bid=6ae5b6f7
Intel stock slumps 11% after poor earnings show softening demand for PCs
Procter & Gamble (PG, a Dow stock & Dividend Aristocrat, reported mixed quarterly results as it
faced rising commodity costs & warned that it expects such headwinds
to persist in its fiscal 2023. Higher pricing during
its fiscal 4th qtr offset a slip in sales volume, which it
attributed primarily to pandemic-related lockdowns in China & reduced
operations in Russia. PG reported a net income of $3.05B (EPS of $1.21). In the year-ago period, it reported a net income of $2.9
(EPS of $1.13). Net sales rose 3% from a year ago, driven by
organic sales growth of 9% in both its health care & fabric & home
care units, where higher pricing made up for flat & negative volumes,
respectively. CFO Andre Schulten attributed the flat & negative volume to the reduction of business in Russia & said he
was confident that the “consumer is holding up well” as the company
raised prices. Still, Schulten said its discussions with
Walmart (WMT) “remain productive” & that the companies’ “interests are
aligned” in addressing inflation. He added PG remains committed to
protecting its strategy of offering multiple price points for consumers,
especially for products such as diapers. For its fiscal 2023,
PG expects EPS to be flat to up 4%. It expects
headwinds of $3.3B due to foreign exchange rates, higher
commodity costs & higher freight costs. The company expects
sales for the year to be flat to up 2% from a year ago. Organic sales,
which strips out the impact of foreign exchange rates, is expected to be
up 3-5%, driven by pricing. The stock sank 9.42 (6%).
If you would like to learn more about PG, click on this link:
club.ino.com/trend/analysis/stock/PG?a_aid=CD3289&a_bid=6ae5b6f7
Higher prices help Procter & Gamble, but Tide maker warns of more challenges
Dow Jones Industrials
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