Markets fall as more earnings are reported

Dow dropped 320, decliners over advancers 5-2 & NAZ sank 372.  The MLP index was even in the 177s & the REIT index fell 1+ to the 429s following recent strength.  Junk bond funds inched higher &Treasuries were purchased.  Oil rose to the 65s & gold was steady at 1791.

AMJ (Alerian MLP index tracking fund)

CL=F Crude Oil 65.04 +0.55 +0.9%

GC=F Gold    1,793.00 +1.20 +0.1%

 

 

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Pfizer (PFE) significantly increased revenue projections from its Covid-19 vaccine for the year, as sales from the shot in Q1 lifted the company to a stronger quarterly profit.  Its vaccine, the most widely distributed of the 3 that have been authorized for use in the US, contributed revenue of $3.5B in Q1 as the US vaccination campaign kicked into high gear.  Over the course of the full year, PFE expects the vaccine to generate $26B in sales after its previous forecast of $15.  Rising vaccine sales joined better results across the company's portfolio of drugs to boost revenue overall.  Total revenue for Q1 came in at $14.6B, climbing 45% year over year.  Stripped of one-time items, adjusted EPS was 93¢.  The forecast was for adjusted EPS of 78¢ on sales of $13.6B.  Higher vaccine sales boosted PFE's outlook for the full year.  The company now expects total revenue of $70.5-72.5B in 2021, with an adjusted EPS of $3.55-3.65 a share.  Its previous revenue forecast had guided for sales of $59.4-61.4B, with adjusted EPS of $3.10-3.20.  The stock rose 10¢ in a down market.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE?a_aid=CD3289&a_bid=6ae5b6f7

SHOT IN THE ARM: Pfizer’s COVID-19 vaccine lifts quarterly results

The US trade deficit hit a fresh record high in Mar as US consumers flush with gov cash spurred a continuing demand for foreign-made goods.  With a new round of $1400 stimulus checks pouring in & the domestic economy continuing to show substantial improvement, the imbalance in goods & services with the rest of the world swelled to $74.4B, the Commerce Dept reported.  That's the highest level ever in a data series that goes back to 1992 & represents a 57.6% increase from the same period a year ago & higher than the $70.5B in Feb.  The trade imbalance with China increased more than 22% to $36.9B & the deficit with Mexico rose 23.5% to $8.4B.  Exports actually increased for the month, rising $200B (6.6%)  But that was offset by a continued demand for imported goods, which increased 6.3% or $274B.  The deficit has risen nearly 10% in 2021 alone & has exploded from the $47B level in Mar 2020, just as the US was entering the early days of the Covid-19 pandemic.  Imports in 2021 have increased by 8.5% while exports have fallen 3.5%.  For Mar, imports rose the most in consumer goods, which increased $4.5B, including a $1.2T rise in textile apparel & household goods.  Industrial supplies & materials imports rose $3.7B & capital goods were up $3.3B.  Industrial supplies & materials led exports with a $5.2B increase, while capital goods were up $2.9B & consumer goods rose $2B.

U.S. trade deficit surges to new record; shortfall with China keeps rising

Under Armour's (UA) raised its sales & profit outlook for the full year, as the sports apparel maker sees demand for its brand roaring back with shoppers returning to its stores.  It reported Q1 sales growth of 35%, topping expectations.  The company is lapping a period a year earlier, when its stores were temporarily shut & UA had to turn to layoffs & other cost-cutting measures to fight through the health crisis.  “On a two-year stack, that is skipping over 2020, we’re running a better, higher quality and more profitable business,” CEO Patrik Frisk said.  EPS grew to 17¢, compared with a loss of $1.30 per share a year earlier.  Excluding one-time charges, EPS was 16¢, better than the 3¢ that analysts was expected.  Sales rose to $1.26B from $930M a year earlier & beating estimates for $1.13B.  In its Q2, Under Armour said sales should rise upwards of 70%, led by the strongest growth in North America & Latin America, as the company laps additional pandemic-related closures in 2020.  It's calling for 2021 adjusted EPS to be 28-30¢, compared with a prior projection of 12-14¢.  The analyst is for 20¢.  The stock fell 46¢.
If you would like to learn more about UA, click on this link:
club.ino.com/trend/analysis/stock/UA?a_aid=CD3289&a_bid=6ae5b6f7

Under Armour hikes full-year outlook, sees demand back

Gloom is the main emotion for traders today although demand for gold, the classic safe haven investment, is limited.  Inflation fears are not going away & thoughts of massive gov spending while the economy is doing reasonably well makes investors nervous.

Dow Jones Industrials

 

Markets edge higher although Nasdaq retreats

Dow went up 238 (off session highs), advancers over decliners better than 2-1 & NAZ pulled back 67.  The MLP index added 1+ to the 176s & the REIT index was off 1 to the 431s.  Junk bond funds rose & Treasuries were purchased.  Oil continued in the 64s & gold advanced 24 to 1791 (more on both below).

AMJ (Alerian MLP Index tracking fund)

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Some Dem lawmakers reiterated their demand that Pres Biden's tax & spending plans include a full repeal of the state & local tax deduction limit, potentially snarling the $4T proposals that are designed to redistribute Ts & dramatically expand the gov-funded social safety net.  Many centrist Dems from high-tax states such as New York, New Jersey & California have demanded that one of Biden's proposals – the $2.3T American Jobs Plan & the $1.9T American Families Plan – include a full repeal of the $10K SALT deduction cap.   "We love the president's plan to do things big and bold and build back better and make the country better than it's ever been before," Rep Tom Suozzi said.  "But no SALT, no deal."  That sentiment was reiterated by a Rep who said during the same interview that he would not support the $4T in proposed spending unless it restored the full tax deduction.  "Know there's a lot of negotiation to go on between now and the end of this bill," Gottheimer added.

Dems renew demand for tax repeal, threaten Biden's spending proposals

Florida Gov Ron DeSantis signed an exec order that immediately suspends all outstanding local Covid-19 emergency orders & related public health restrictions.  “The fact is, we are no longer in a state of emergency,” DeSantis said.  He acknowledged that Florida was still not done with its fight against the coronavirus but reiterated the nation's decline in Covid-19 cases & deaths.  “I think that’s the evidence-based thing to do,” DeSantis said, adding that asking vaccinated individuals to continue to wear masks would undermine confidence in the coronavirus vaccines.  Private businesses can still require masks & enforce social distancing & other protective measures.  DeSantis signed a bill that codifies the exec order into law, effective Jul 1.  The exec order, he said, was designed to “bridge the gap” until then.  The measure, which effectively ends all local pandemic-related restrictions, also bans vaccine passports.  Florida has reported the third-most Covid-19 cases in the US at more than 2.2M since the beginning of the pandemic & the 4th-highest death toll at more than 35K fatalities, according to Johns Hopkins University.  Average new cases there, however, have fallen by more than 13% over the last week, dropping to 4885.  Last week, the Biden administration announced a relaxation of federal public health guidance on wearing masks outdoors.  The Centers for Disease Control & Prevention recommends that fully vaccinated people can exercise & attend small gatherings outside without wearing a face mask.  The agency still recommends that fully vaccinated people wear a mask outdoors when in crowded areas.

Florida Gov DeSantis suspends Covid restrictions: ‘We are no longer in a state of emergency’

Gold futures climbed to mark their first gain in 5 sessions, as weakness in the $ & subdued yields for gov bonds helped to revive some buying in bullion after last week's drop.  Gold for Jun rose $24 (1.4%) to settle at $1791 an ounce after touching an intraday day of $1798.  The settlement was the highest for a most-active contract since Apr 21.  Some market participants attributed the gains for gold on the session to a hunt for bargains after last week's skid.  Prices for gold gained more ground following data from the Institute for Supply Management's manufacturing index.  Last week, most-active gold futures fell 0.6% for the week, but saw a monthly rise of about 3%—the first monthly climb of the year.

Gold marks first gain in 5 sessions amid subdued dollar, bond yields

About 2 in 5 American adults are now fully vaccinated for Covid-19, Centers for Disease Control & Prevention data shows, as the rate of new coronavirus infections continues to decline.  The US is averaging 2.4M reported vaccinations per day over the past week, down from a high point of 3.4M daily shots on April 13.  The rate of new infections is also declining.  The country is reporting an average of 49K cases per day, according to Johns Hopkins University, down from more than 70K just a few weeks ago.  About 2.1M vaccines were reported given Sun, bringing the 7-day average to 2.4M per day.  Nearly 45% of Americans have received at least one dose of a vaccine & 32% are fully vaccinated.  Of those aged 18 ^d older, 56% are at least partially vaccinated & 40% are fully vaccinated.  “We’re not going to get everyone vaccinated,” Dr Scott Gottlieb said.  “If we can get two-thirds of the population vaccinated or a little bit better than that, that’s going to be a pretty good level of protection,” he added.  The rate of new infections has fallen to the lowest level in months, according to Johns Hopkins data.  Over the weekend, the US 7-day average of daily new cases dropped below 50K for the first time since Oct.  Elsewhere, Covid outbreaks are reaching new heights.  India accounts for 1 in every 3 new coronavirus cases globally, according to the World Health Organization, with nearly 7M cases reported in Apr.  The US is reporting an average of 683 Covid deaths per day.

2 in 5 American adults fully vaccinated as daily average of new Covid cases falls below 50,000

Oil futures finished higher, buoyed by signs of a brighter global demand outlook, even as India, the world's 3rd-largest oil consumer, continues to suffer from record daily COVID-19 cases.  While the US continues to lead the world in cases & deaths by wide margins, with 32.4M cases & 577K deaths, India is 2nd by cases at 19.9M after recording 368K new cases today & 3417 deaths.  Over the weekend, India counted more than 400K news cases in a single day to set a fresh global record.  West Texas Intermediate crude for Jun rose 91¢ (1.4%) to settle at $64.49 a barrel.  Jul Brent, crude, the global benchmark, added 80¢ (1.2%) at $67.56 a barrel.  White House officials yesterday denied Iranian state media reports that the US had reached a deal to end economic sanctions & that substantial negotiations loomed ahead.  The US also immediately denied a report by Iranian state-run television that deals had been reached for the Islamic Republic to release US & British prisoners in exchange for Tehran receiving Bs of $s.

Oil ends higher on signs of a brighter global demand outlook

The spending bills in Congress are going to need more work to get passed.  While the virus numbers in the US are looking better, they continue to be considerably above zero where everybody wants them to be.  Other countries such as Japan & much of South America are also suffering.  The Dow finished at the low end of today's trading range.  Tech shares were sold, dragging NAZ lower.  Gold is back in the rise,  a worry for the bulls.

Dow Jones Industrials

Markets jump to start the month on a positive note

Markets shot up 316, advancers over decliners 5-2 & NAZ gained 34.  The MLP index added 1 to the 176s & the REIT index fell 1+ to the 431s (still in record territory).  Junk bond funds crawled higher & Treasuries were in heavy demand.  Oil went over 64 again & gold soared 29 to 1797.

AMJ (Alerian MLP index tracking fund)

CL=F Crude Oil 64.22   +0.64 +1.0% GC=F Gold   1,792.30  +24.60 +1.4%

 

 

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Berkshire Hathaway (BRK.A) is seeing inflation among Berkshire Hathaway's collection of businesses as the economic recovery from the pandemic kicks into high gear.  “We are seeing very substantial inflation,” the Berkshire chairman and CEO said.  “It’s very interesting. We are raising prices. People are raising prices to us and it’s being accepted.”  “We’ve got nine home builders in addition to our manufactured housing and operation, which is the largest in the country. So we really do a lot of housing. The costs are just up, up, up. Steel costs, you know, just every day they’re going up,” he added.  Berkshire Hathaway owns one of the nation's largest homebuilders Clayton Homes, along with companies such as Benjamin Moore paints & Shaw flooring.  Inflation has begun to accelerate recently due to multiple factors, including increasing demand & struggles with some areas of the supply chain, as well as just easier comparisons with the pace of a year ago.  The core personal consumption expenditure price index, which excluded volatile food & energy prices, rose 1.8% in Mar, the fastest pace since Feb 2020.  The headline number increased 2.3%, the quickest pace for that measure since 2018.

Buffett says Berkshire is seeing ‘very substantial inflation’ and raising prices

New cases of Covid-19 are dropping sharply across the US as Ms of people get vaccinated daily, fueling optimism that the nation may have averted the surge of infections gripping other parts of the world & is finally turning the corner on what was one of the worse outbreaks globally.  The latest 7-day average of daily new cases fell to under 50K for the first time since Oct & is down 17% from a week prior, according to Johns Hopkins University.  Hospitalizations & deaths from the disease are also falling. . Cases are falling as more Americans get vaccinated.  To date, more than 100M people in the US have been fully vaccinated against Covid-19, according to the Centers for Disease Control & Prevention, nearly 1/3 of the population.  About 146M people, 44% of the population, has received at least one dose of a vaccine.  He said that the precipitous drop in new Covid-19 cases in the US was likely to continue, predicting a “relatively quiet summer when it comes to coronavirus spread.”  “Look, the situation in the U.S. continues to improve, and I think in the coming weeks we are going to see an acceleration in the decline in cases,” Gottlieb added.  The physician credited the mass vaccination campaign that got underway under Pres Trump & has been continued under Pres Biden for the country's ability to rein in the spread of the disease.

Covid cases fall sharply in U.S., Gottlieb calls vaccination campaign ‘monumental achievement’

White House Chief of Staff Ron Klain said that the Biden administration is looking to distribute the coronavirus vaccine to India & other countries now that Ms of Americans have received their doses.  In recent weeks, India has grappled with a staggering rise in new coronavirus infections.  Over the weekend, India reported 400K daily cases, bringing the nation's cumulative total to almost 20M cases, according to Johns Hopkins.  The spike may have been triggered by a highly contagious Covid variant, known as B.1.617, which was first identified in the country.  The variant has since been identified in other countries, including the US.  On Fri, the White House announced that it would restrict travel from India as the country works to counter its surge of Covid-19 infections.  “We are rushing aid to India,” Klain said.  Klain said that the US has sent therapeutics, rapid diagnostic test kits, ventilators & protective equipment to the world's largest democracy as well as raw materials crucial for vaccine production.  “Our U.S. Trade Representative Katherine Tai is going to the WTO next week to start talks on how we can get this vaccine more widely distributed, more widely licensed, more widely shared,” he said when asked if the Biden administration would relax patent protections on the coronavirus vaccine.

U.S. to discuss wider Covid vaccine licensing as India calls to waive patent protections

The bulls are back in command after a sluggish week.  However, there is also buying in Treasuries & gold, classic safe heaven investments.  Inflation, especially from proposed massive gov spending, continues to be a worry for investors.

Dow Jones Industrials