Markets fluctuate in choppy trading

Dow gave back 6, advancers slightly ahead of decliners & NAZ was down 6.  The MLP index was fractionally higher to the 334s & the REIT index climbed 3+ to the 339s.  Junk bond funds crawled higher & Treasuries had tiny gains.  Oil was lower, still in the 53s, & gold added 9 to 1217 on growing uncertainty in the stock market.

Dow Jones Industrials

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Shares of Delta Air Lines slumped, after the air carrier's Jan performance data showed that supply growth outpaced demand.  Total system traffic rose 0.4% to 15.34B revenue passenger miles, while capacity increased 0.6% to 19.26B available seat miles.  That pushed load factor down to 81.2% from 81.3%, with domestic load factor declining 30 basis points to 80.8% & intl load factor rising 10 basis points to 81.8%.  The stock lost 13¢.  If you would like to learn more on DAL, click on this link:
club.ino.com/trend/analysis/stock/DAL?a_aid=CD3289&a_bid=6ae5b6f7

Delta Air Lines Stock Falls After Seat Supply Growth Outpaces Demand

Delta Air Lines (DAL)

Merck shares surged after company earnings numbers appeared to show its blockbuster Keytruda cancer drug beat expectations.  But on the earnings call, management said Q4 sales for the drug included a one-time adjustment of $40M in revenue "that had previously been deferred."  As result Keytruda Q4 revenue was $443M, below the estimate of $470M.  The Keytruda revenue number, at $483M, a 125% increase from the year-earlier period, had previously appeared to be "the most important positive."  The stock rose 2.07.  If you would like to learn more on MRK, click on this link:
club.ino.com/trend/analysis/stock/MRK?a_aid=CD3289&a_bid=6ae5b6f7
 

Merck Earnings Stock Gains Give Way After Keytruda Revenue Turns Out To Be a Miss

Merck (MRK)

US stocks fell in late PM trading, after edging up briefly, as investors turned wary following Trump's latest protectionist comments.  Trump in a meeting with key lawmakers said he would like to speed up talks to either renegotiate or replace the North American Free Trade Agreement (NAFTA).  Investors are also assessing possible consequences of Trump's other comments, including labeling a refugee swap agreement with staunch ally Australia as a "dumb deal" & putting Iran "on notice" for firing a ballistic missile.  US equities had enjoyed a frenetic post-election rally on bets that Trump would usher in an era of growth, stimulating the economy thru tax cuts, simpler regulations & higher infrastructure spending.  However, the rally has been unraveling in the past weeks as his priorities, such as imposing restriction on travel to the US & withdrawing from a trade deal, have caused uncertainty & made it hard for investors to have conviction in the equity market.

Wall St Slips as Investors Digest Trump's Trade Comments

Oil futures fell to mark the first loss in 3 sessions as traders continued to weigh progress with global crude production cuts against concerns over the potential for a sizable increase in US output.  Mar West Texas Intermediate crude fell 34¢ (0.6%) to settle at $53.54 a barrel, after gaining 2% yesterday.

Oil Futures Finish With First Loss In Three Sessions

Today was another indecisive day for stocks as traders adjust to twists & turns from the White House.  This is a vastly different market than in the past 8 (even 16) years.  Today Trump met with Harley Davidson's (HOG) execs & union leaders to learn more about that business.  He is serious about adding jobs in the US.  His cabinet nominees are very slowly being approved & the judge is meeting Congressional leaders ahead of his vote.  Initial optimism in the stock market is becoming a little skeptical.  There is much to get done & the reality of making it all happen is sinking in.  The UC Berkley riot last night brought tweets about cutting fed funds.  The unrest was over shutting down free speech.  Very chilling!  But Dow has been hanging in around 19.9K for 2 months, not bad when all is considered.

Dow Jones Industrials

 

  

Mixed markets on concerns about future rate hikes

Dow lost 10, advancers over decliners 4-3 & NAZ was essentially even.  The MLP index was off a fraction to the 332s & the REIT index added 3+ to the 339s.  Junk bond funds were a little higher & Treasuries went up.  Oil rose & gold shot up to 1222.

AMJ (Alerian MLP Index tracking fund)

CL=F

Crude Oil Apr 17

54.56

0.07

0.1%

GC=F

Gold Futures,Apr-2017

1,221.50

13.20

1.1%

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Worker productivity in the US cooled in Q4 following the biggest jump in 2 years, resuming the weak efficiency gains that have plagued the expansion.  The measure of employee output per hour increased at a 1.3% annualized rate, after a revised 3.5% rise in the prior 3 months, Labor Dept figures showed.  The projection called for a 1% gain.  Expenses per worker rose at a 1.7% pace.  The latest slowdown, following a Q3 gain that ended the longest streak of productivity declines since 1979, underscores the challenge of developing a sustained pickup.  With wage growth remaining below pre-recession levels, businesses have relied on more hiring rather than investing in technology to increase efficiency.  Unit labor costs, adjusted for efficiency gains, were forecast to rise at a 1.9% rate in Q4.  They increased 0.2% in the prior qtr, revised from a previously reported advance of 0.7%.  Productivity increased 1% from Q4-2015.  Labor costs rose 1.9% from a year earlier.  Adjusted for inflation, hourly earnings fell at a 0.4% rate last qtr, the 2d drop in 2016, after increasing at a 2.1% pace.  Output rose at a 2.2% rate, following a 4.2% gain.

U.S. Productivity Gains Cooled Last Quarter; Labor Costs Rose

Fewer Americans filed applications for unemployment benefits last week, marking 100 straight weeks of claims below 300K.  That’s the longest streak since 1970 & indicates a healthy job market.  Jobless claims declined 14K to 246K, according to the Labor Dept.  The forecast called for 250K.  Continuing claims also fell.  The sustained trend of historically low jobless claims shows businesses are retaining existing employees as they face a shortage of skilled workers amid a tight labor market.  Employers also continue to hire at a solid pace.  Monthly data due tomorrow are projected to show the economy added more jobs in Jan than the prior month.  The latest stretch below 300K claims ranks behind the record 161-week period that ended in 1970 (statistics began in 1967).  Such a level is consistent with a healthy labor market.  The number of people continuing to receive jobless benefits fell 39K to 2.06M & the unemployment rate among people eligible for benefits held at 1.5%.  The 4-week moving average increased to 248K last week, from 246K.

Filings for U.S. Jobless Benefits Fell to 246,000 Last Week

Oil prices rose as evidence that OPEC & other big exporters were cutting production outweighed a sharp rise in US crude and gasoline stockpiles.  US light crude gained 15¢ to $54.03 after climbing $1.07 yesterday.  Crude oil benchmarks are now near the top of recent price ranges.  US crude oil inventories rose last week by an unexpected 6.5M barrels to 495M barrels, the Energy Information Administration said.  The build in crude stocks far exceeded expectations for an increase of 3.3M barrels.  Inventories in the US, the world's biggest oil consumer, have been near record highs for much of the past year & domestic production is rising as US companies drill for shale oil.

Oil up as OPEC Cuts Outweigh Rise in U.S. Inventories

Not much happening today in the stock market.  Trump is moving forward with his agenda & the Dow remains close to its record highs reached last week.  And DC is a mess with expectations that fighting will drag on for months.

Dow Jones Industrials