Markets advance as the Dow leads stock averages to new records

Dow jumped 337 (from breakeven, it kept rising throughout the session to finish near the highs), advancers over decliners 3-1 & NAZ gained 51.  The MLP index added 2 to the 288s & the REIT index rose a big 5 to 358.  Junk bond funds were higher & Treasuries were in demand which lowered yields.  Oil continued slightly lower but held above 70 & gold was up 12 to 2694 (more on both below).

Dow Jones Industrials 

Apple's (AAPL), a Dow stock, newest version of the iPad Mini will hit the market on Oct 23 with the technology to run artificial intelligence (AI) features.  The tech giant touted the new tablet as delivering "incredible value & the full iPad experience in an ultraportable design" as it unveiled the device.  The upcoming iPad Mini will have a starting price tag of $499 & pre-orders for the device have already opened ahead of its launch next week.  AAPL built the iPad Mini with the A17 Pro chip that will allow it to run Apple Intelligence & other new features, according to the company & will have iPadOS 18.  Using a software update, the tech giant will bring initial AI features such as ones for writing, Siri & cleaning up photos to the US later in the month.  More will be coming "over the next several months," AAPL said.  Capabilities to create images, custom emojis & utilize ChatGPT will be among them.  AAPL has also increased the base level of storage the iPad Mini offers twofold from that of its predecessor to 128GB.  It will have a 12MP wide back camera with Smart HDR 4 & a 12MP Ultra Wide front camera.  AAPL has also added compatibility with the Apple Pencil Pro.  The tech giant last released a new model of the iPad Mini about 3 years ago.  The first edition of the tablet debuted in 2012.  The stock was down 2.07.

Apple unveils iPad Mini full of new tech features, including AI capabilities

General Motors (GM) has agreed to establish a joint venture with Lithium Americas (LAAC) that includes the automaker supplying $625M in cash & credit to the Canadian mining business.  The deal is centered on the development, construction & operation of a lithium carbonate mining operation called Thacker Pass in Humboldt County, Nevada.  Lithium is a key component for batteries that power electric vehicles.  Securing raw materials such as lithium from the US is crucial to GM's plans to profitably grow its all-electric vehicle business & meet tightening federal requirements for incentives to produce & sell the vehicles & the large batteries needed to power them.  “We’re pleased with the significant progress Lithium Americas is making to help GM achieve our goal to develop a resilient EV material supply chain,” Jeff Morrison, GM senior VP of global purchasing & supply chain said.  “Sourcing critical EV raw materials, like lithium, from suppliers in the U.S., is expected to help us manage battery cell costs, deliver value to our customers and investors, and create jobs.”  GM will have a 38% interest in Thacker Pass.  The joint venture investment is expected to include $330M cash to be contributed on the date of its closing; $100M cash to be contributed at a “final investment decision” for a phase of the project; & a $195M letter of credit facility prior to first draw on the $2.3B Dept of Energy Loan.  “Our relationship with GM has been significantly strengthened with this joint venture as we continue to pursue a mutual goal to develop a robust domestic lithium supply chain by advancing the development of Thacker Pass,” LAAC CEO Jonathan Evans said.  GM stock rose 1.15 & LAAC stock (a low priced stock) was up 10¢.  

GM to invest $625 million in joint venture to mine EV battery raw materials in U.S.

United Airlines (UAL) is starting a $1.5B share buyback as the carrier reported higher-than-expected earnings for the busy summer travel season & forecast strong results for the last 3 months of the year.  UAL expects to earn an adjusted $2.50 - $3.00 a share in the 4th qtr, compared to $2.00 a year earlier & the $2.68 estimated.  The share buyback would be its first since before the Covid-19 pandemic.  US airlines received more than $50B in gov aid during the pandemic travel slump that prohibited share repurchases & divs, though airlines were still fighting for financial stability.  “Like other leading airlines and companies, we are initiating a measured, strategic share repurchase program,” CEO Scott Kirby said.  “Importantly, my commitment to you is that investing in our people and our business will always be my top priority even while we institute this share repurchase program.”  For the 3rd qtr, revenue was $14.8B, up 2.5% from a year earlier & above estimates.  It reported net income of $965M, down 15% from a year ago.  Domestic unit revenue was positive in Aug & Sep compared to last year as airlines trimmed a glut of flights that were pushing down fares.  Fares are likely to rise into 2025.  “We believe Q1 yield strength will be possible due to the significant schedule changes and business model changes that will continue to be implemented by low-margin airlines,” said COO Andrew Nocella.  UAL expanded capacity by 4.1% in the 3rd qtr.  Corp revenue rose 13% in the qtr; premium revenue, including business class tickets, rose 5%; & sales from its no-frills basic economy tickets were up 20%.  Adjusting for 1-time items, EPS was $3.33, topping forecasts & its estimate in Jul of $2.75 - $3.25.  The stock shot up 7.97 (12%).

United shares head for pre-pandemic high after airline forecasts strong finish to 2024, plans buyback

Gold advanced towards record highs as gains in non-yielding bullion were bolstered by weakness in US bond yields & expected rate cuts by major central banks, with additional safe-haven support from ongoing geopolitical conflicts.  Spot gold rose about 1.1% to $2658 per ounce, inching close to a record high of $2685 it hit on Sep 26 & US gold futures settled 1.4% to $2676.  Expectations of a 25-basis-point rate cut by the Federal Reserve in Nov are solidifying, weaker inflation data in Europe & the UK have increased expectations for more aggressive ECB & BoE easing, leading to generally lower yields which have lifted gold.  Treasury yields fell to their lowest in over a week, making gold more attractive as it tends to thrive in a low interest rate environment.

Gold extends gains over 1% as US PPI data solidifies rate cut hopes

Oil steadied as traders continued to monitor the outlook for next year & the risk of escalation in the Middle East.  West Texas Intermediate edged lower to settle near $70 after flipping between small gains & losses throughout the session.  The benchmark sank more than 4% yesterday on reports that Israel had agreed to avoid oil facilities in its planned response to Tehran's recent missile strike.  Israel launched a fresh attack in southern Beirut today, despite Lebanon saying that it received some form of guarantee from the US that Israel will ease its offensive.  Meanwhile, Iranian authorities have started efforts to contain an oil leak from subsea pipelines off the nation's key Kharg Island terminal in the Persian Gulf.  While the cause was unclear, the leak heightened attention on Iran's export facilities.  Crude has been on a roller-coaster ride this month, with prices buffeted by tensions in the Middle East, as well as China's efforts to revive domestic growth. Traders have also been weighing the market's outlook for next year, with the Intl Energy Agency yesterday flagging prospects for a global glut.  Later today, traders will also monitor an industry report on US stockpiles for insights into consumption in the biggest oil user before official data is reported tomorrow.  Last week, stockpiles swelled by 5.8M barrels, their biggest increase since late Apr.  WTI for Nov fell 0.3% to settle at $70.39 a barrel & Brent for Dec was little changed at $74.22 a barrel.

Oil Price Little Change Near $70 With Risk to Middle East Supplies in Focus

The stock averages keep climbing as investors digest earnings reports.  Meanwhile thoughts of lowering yields are raising demand for gold.  This combination is difficult to understand.