Markets jump after data shows inflation has settled down

Dow soared 519, advancers over decliners 3-1 & NAZ gained a more modest 118.  The MLP index was up 1+ to the 289s & the REIT index rose 3+ to the 398s.  Junk bond funds were mixed & Treasuries had buying which lowered yields (more below).  Oil fell 1+ to the 76s & gold recovered 28 to 2382.

Dow Jones Industrials 

An inflation measure closely watched by the Federal Reserve eased slightly in Jun, even as high prices continued to weigh on Ms of Americans.  The personal consumption expenditures (PCE) index showed that consumer prices rose 0.1% from the previous month, according to the Labor Dept.  On an annual basis, prices climbed 2.5%, down slightly from the 2.6% reading recorded the previous month.  The figures were both in line with estimates.  Prices for services increased 0.2% for the month & remain up 3.9% from the same time last year.  The cost of goods also rose 0.1% on a monthly basis, despite a 2.1% drop in energy prices.  Goods prices are down 0.2% when compared with last year.  When excluding food & energy, core prices climbed 0.2% from the previous month & 2.6% from the previous year.  Both of those figures are slightly higher than estimates.  While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%, Chair Jerome Powell previously told reporters that core data is actually a better indicator of inflation.  Other figures included in the report showed that consumer spending rose 0.3% in Jun compared with a 0.4% increase in May, as Americans continued to open their wallets.  Consumer spending has proven surprisingly resilient, despite high prices, steep interest rates & the resumption of federal student loan payments.  The report also showed that personal income rose just 0.2% last month.  The data comes as investors look for signs that the Federal Reserve is prepared to cut interest rates.  Policymakers will meet next week but are widely expected to hold rates steady at a 23-year high.  Most investors now anticipate the Fed will make the first rate reduction in Sep amid signs that the economy is cooling & inflation is slowly easing.

Fed's closely watched inflation measure eases slightly as Americans face soaring prices

Treasury prices rose & yields fell after the Federal Reserve's preferred inflation gauge matched expectations ahead of the central bank's monetary policy meeting next week.  The yield on the 10-year Treasury fell 3 basis points at 4.222% & the 2-year Treasury yield was last at 4.408%, down about 4 basis points.  Yields & prices have an inverted relationship & 1 basis point equals 0.01%.  The above report further cemented the case for a Sep rate cut ahead of the Fed's meeting next week.  The central bank is widely anticipated to leave interest rates unchanged at the Jul meeting, but investors are hoping clearer signals of when rates will be lowered & how many cuts are likely this year.  Markets were last pricing in a 100% likelihood that the benchmark fed funds borrowing rate will fall from its current 5.25%-5.50% at the Fed's Sep meeting, according to the CME FedWatch Tool.  The latest inflation data comes after a raft of mixed signals this week on the state of the US economy.  A preliminary reading of gross domestic product for the 2nd qtr annual growth of 2.8%, faster than the 2.4% economists had forecast.

Treasurys gain and yields slip after the release of key inflation data for June

Bristol Myers Squibb (BMY) reported 2nd-quarter earnings & revenue that topped expectations & raised its full-year guidance as the drugmaker moves to slash costs.  The pharmaceutical giant raised its full-year revenue forecast to an increase in the “upper end” of the low single-digit range.  That compares with its previous guidance in Apr of a low single-digit increase in sales.  The company also raised its 2024 adjusted earnings guidance to 60-90¢ per share, up from a previous forecast of 40-70¢.  The results come as BMY moves to cut $1.5B in costs by 2025 & reinvest that money into key drug brands & research & development programs.  In Apr, the company said that will involve laying off more than 2000 employees, culling some drug programs & consolidating its sites, among other efforts.  Revenue rose 9% from the same period a year ago to $12.2B.   EPS was 83¢ for the 2nd qtr.  That compares 99¢ for the year-earlier period.  Excluding certain items, its adjusted EPS was $2.07 for the qtr.  The 2nd-qtr sales increase came primarily from the company's blockbuster blood thinner Eliquis & a portfolio of drugs it expects to help it deliver long-term growth.  Among those treatments is the cancer drug Opdivo, which raked in higher-than-expected sales for the qtr.  The stock rose 3.97 (6%).

Bristol Myers Squibb beats estimates, raises outlook as drugmaker cuts costs 

Stocks rose, poised for a comeback bid as investors embraced new pricing data that showed inflation continuing to ease, solidifying expectations for coming interest-rate cuts.  A pause in this year's rally has investors questioning whether the sell-off is a turning point to sustained lower prices or a typical bull-market pullback.  In play are earnings-fueled concerns about softness in the US economy, though yesterday's relatively hot GDP data eased those somewhat.  Tech stocks have lost some of their fans recently.