Dow dropped 45, decliners slightly ahead of advancers & NAZ was off 126. The MLP index edged up 1+ to the 288s & the REIT index was added 1+ to the 377s. Junk bond funds fluctuated & Treasuries had selling which increased yields. Oil continued a little lower in the 81s & gold remained steady at 2336 (more on both below).
Dow Jones Industrials
Pres Biden's raspy, unfocused, often inarticulate & widely panned debate performance stoked deep anxiety among Dem, & caused some commentators & fundraisers to openly call for a new nominee to run against former Pres Trump. But replacing Biden as the party's pick less than 5 months out from Election Day carries enormous political risks, & would be difficult, if not impossible, to pull off. Right now, the only likely way Biden could be replaced is if he willingly ends his campaign. Biden's aides & top Dem officials say the 81-year-old incumbent has no plans to do so. If he did drop out, Dems have yet to identify a clear alternative candidate to swap in. But the panic among donors & party officials after watching Biden falter last night in his debate against Trump has led some of them to take steps to get Biden out of the race. There are already discussions among Dem fundraisers about trying to convince congressional leaders, Senate Majority Leader Chuck Schumer in particular, to urge Biden to announce to drop out, according to people familiar with the matter. Schumer is a top target for donors making that pitch because he privately has voiced concerns about Biden's standings in presidential election polls. Schumer was worried before the debate that Biden & Trump were in statistical tie nationally, despite the Rep challenger's conviction in his New York trial. A spokesman for Schumer declined to comment, but pointed to a social media post the majority leader published after the debate. Schumer in that X post wrote: “Tonight’s debate made the choice clear: Four more years of progress, or four more years of attacks on our fundamental rights and our democracy.” “We’ve got to get out the vote for Joe Biden, Kamala Harris, and a Democratic Senate and House!” the post said. That spin has not alleviated the post-debate anxiety of some of the pres's top fundraisers. Some of those wealthy donors have lost trust in Biden's team, believing they were given false assurances about Biden's ability to take on Trump.
Biden debate flop leads Democrats to call for new nominee — but replacing him is tough to do
Shares of Nike (NKE), a Dow stock plunged after the retailer cut its full-year guidance &
said it expects sales to drop 10% during its current qtr as it
warned of soft sales in China & “uneven” consumer trends across the
globe. The expected 10% first-qtr slump is far below the 3.2% drop that had been expected. The sneaker giant now
expects fiscal 2025 sales to be down mid-single digits, compared to estimates of a 0.9% increase. NKE previously expected sales to
grow. The company also expects sales in the first ½ to be down in the
high single digits, compared to previous guidance of declines in the
low single digits. “A comeback at this scale takes time,” CFO Matthew Friend said. “Although the next few quarters will be challenging, we are
confident that we are repositioning Nike to be more competitive with a
more balanced portfolio to drive sustainable, profitable, long-term
growth.” The company cut its guidance as it contends with slower
online sales, planned declines in classic footwear franchises,
“increased macro uncertainty” in the Greater China region & “uneven
consumer trends” across NKE's markets, Friend said. It also expects
sales into wholesalers to be slower as it scales new innovations &
pulls back on classic franchises. For the fiscal 4th qtr,
the company handily beat earnings estimates as its cost-cutting efforts
continue to bear fruit, but NKE fell short on revenue. EPS was 99¢, compared with 66¢ a year earlier. Sales dropped to $12.6B, down about 2% from $12.8B a year earlier. In
fiscal 2024, sales were $51.4B, which is flat
compared to the prior year. It's the slowest pace of annual sales growth
the company has seen since 2010, excluding the Covid-19 pandemic. NKE stock tumbled 18.83 (20%).
Nike says quarterly sales will fall 10%, warns on China weakness
Pfizer (PFE) had a “phenomenal” first qtr & CEO
Albert Bourla told thousands of employees during a town hall
on May 2. A day earlier, its quarterly results topped estimates & it hiked its full-year outlook. Few companies benefited from the pandemic as much as PFE did. Profits boomed, fueled by its Covid vaccine & antiviral pill Paxlovid. After PFE German company BioNTech (BNTX) rapidly developed & deployed a lifesaving shot that helped the world emerge from the pandemic, PFE drew widespread praise. PFE
may be on its way toward stabilizing its business & winning back investor's favor after the strong first qtr. But the company is
struggling to balance that with the fears of its employees, some of whom
said they feel uncertain about their future & unmotivated after the
sudden reversal of fortune. In Oct PFE launched a multibillion-$ cost-cutting program, slashing research & development spending & laying off hundreds of employees, including in the once-lauded
Covid vaccine unit. In May the company said it's on track to deliver $4B in savings by the end of the year. Now, as PFE appears poised to turn a corner, the company is trying to boost employee morale to match investor's optimism. PFE stock went up 19¢.
Pfizer struggles to claw back faith with Wall Street and employees as it recovers from Covid decline
Gold prices steadied & were headed for a 3rd straight quarterly gain after a key US inflation report came broadly in line with expectations, boosting hopes that the Federal Reserve may cut interest rates by Sep. Spot gold was steady at $2328 per ounce & prices have gained over 4% for the qtr. US gold futures rose 0.1% to $2339. Gold was also supported by a decline in the Treasury yields which makes the non-yielding bullion more attractive for investors. Market bets rose today that the Federal Reserve will cut interest rates by Sep & do so again in Dec after a gov report showed inflation by the personal consumption expenditures index (PCE) did not rise at all from Apr to May. PCE last month followed an unrevised 0.3% gain in Apr data, while consumer spending rose moderately. Traders are currently pricing in about a 68% chance of a rate cut in Sep, compared with 64% before the release of the inflation data, according to CME FedWatch tool.
Gold gleams on rate cut hopes after inflation data, en route quarterly gain
West Texas Intermediate (WTI) closed lower even as a report showing US inflation slowed last month revived hopes the Federal Reserve will be able to speed expected cuts to interest rates, while the threat of a spreading Middle East war is rising. WTI crude for Aug closed down 20¢ to settle at $81.54 per barrel, after earlier touching $82.72. Aug Brent crude, the global benchmark, was last seen up 8¢ to $86.47. The US Bureau of Economic Analysis reported the Personal Consumption Expenditures (PCE) Index fell to 2.6% annualized in May from 2.7% in Apr, matching expectations. The core measure, which excludes volatile food & energy, fell to 2.6% annualized from 2.8% in Apr, also matching expectations. The slowing pace of inflation is raising hopes the Fed will be able to speed interest rate cuts, with the CME Fedwatch tool now showing a 59.5% probability the central bank will make a 25 basis point cut to rates at its Sep meeting. Despite rising inventories showing demand remains moderate, geopolitical risks are on the rise, as Israel continued its war on Hamas in Gaza while increasing attacks on Israel by the Iran-backed Hezbollah militant group in Lebanon threatens a wider war.
WTI Closes Lower Even as U.S. Inflation Slowed in May While Geopolitical Risks Rise
The news about Biden's weak showing at the debate last night & all the tumult today about his & Dems in general has brought on selling. The odds that Pres Biden would would win re-election took a nosedive after his widely panned debate performance. Dow began trading today with a solid gain, but then sellers took it down over 400. The presidential election & Biden's future will be a major factor in the stock market for several months. Dow finished up 1439 YTD & up 2442 in Q2.
No comments:
Post a Comment