US Equity Markets Little Changed

U.S. equity markets were mostly flat, but the S&P 500 and Nasdaq ended their three-day slide as investors considered new reports on the economy and corporate earnings.

Shares of chip companies were among the best performers on the S&P 500 as President Biden announced the Port of Los Angeles will be opened 24/7 to help ease the backlog of shipments to the U.S. Shares of Target (TGT) and Amazon (AMZN) jumped after Bank of America said the retailers were among its top eight picks among e-commerce stocks. 

A new report showing inflation continues to be at 13-year highs led to a run on gold and other precious metals. That lifted shares of Freeport-McMoRan (FCX) and other mining companies. Minutes from the Federal Reserve’s September meeting showed policymakers are ready to start tapering their bond-buying program as early as next month. Bond yields, which had been lower during the session, edged up slightly after the announcement. Still, the rate on the 10-year note finished lower at 1.55%.

Third-quarter earnings season shifted into high gear, but investor enthusiasm stalled. Shares of JPMorgan Chase (JPM) sank more than 2% as its report didn’t impress. That dragged down shares of rival banks, which are reporting later this week. Delta Air Lines (DAL) shares dropped almost 6% after it warned rising fuel costs will impact profit this quarter. Shares of other airlines fell as well.

Bitcoin rose 3% and was trading above $57,000. 

Cold Cash

U.S. energy officials are warning that Americans will be paying much more to heat their homes this winter, and the Biden Administration is reportedly asking the industry to help bring down the cost of fuel.

The Energy Information Administration’s (EIA) Winter Fuels Outlook 2021 said households that heat with propane should expect to pay 54% more than last year, while those using heating oil will see a 43% increase. The cost for natural gas heating is set to jump 30%, with electric heat up 6%.

The IEA explained the forecast is based on expectations of high retail energy prices, many already at multi-year highs. It also anticipates slightly more energy consumption than last winter.

Price Inflation

The Labor Department reported today that energy prices in September were up 24.8% from the year before, and fuel oil prices increased 42.6%.

The situation has apparently become a key focus at the White House. Reuters is reporting administration officials have talked with oil and gas producers about reducing prices, and Bloomberg said top Biden aides met last night to discuss ways to address the rising cost of gasoline and natural gas. 

A Real Enterprise in Space

Captain Kirk really got to the “final frontier.”

Actor William Shatner and three others successfully flew into suborbital earth in the second passenger flight of Jeff Bezos’ Blue Origin New Shepard spacecraft.

The 90-year-old Shatner, who played Captain Kirk in the original Star Trek television series, became the oldest person to travel into space. The flight lasted 10 minutes, with the capsule reaching an altitude of more than 65 miles.

Shatner was full of emotion after landing, calling the trip “something unbelievable” that everybody needs to do.

$100 Million in Tickets

Shatner didn’t have to pay for his ticket, and Blue Origin has been tight-lipped about what it is charging those who have booked future flights. Bezos said after his July mission simply that demand is high and the company has nearly $100 million worth of reservations.

The success of today’s flight helped boost shares of billionaire Richard Branson’s rival space tourism company, Virgin Galactic (SPCE), by almost 2%.

Caution Flags

The recent stock market volatility and uncertainty about the economic recovery is causing many of you to throw up caution flags, according to our most recent survey. 34% of our newsletter readers who responded to the survey think the stock market will experience a “significant drop,” over the next six months. That’s up 10 percentage points from our May survey, and it is right in line with other investor sentiment surveys of both institutional and individual investors.

Supply Chain Worries

The number one concern among our readers is the continued supply chain disruptions that are leading to product shortages and higher prices. More than half of our readers who responded to our survey, all of whom identify as active investors, believe those disruptions will have the most significant impact on their investment returns. That issue came ahead of inflation, more government spending, and the spread of COVID-19 variants as their top concern.

Bubbles?

As for bubbles, our readers identified cryptocurrencies and the U.S. real estate market as the frothiest, followed by stocks, SPACsNFTs, and commodities. While prices and valuations are high across nearly all asset classes, the surge in commodity prices like coffee, crude oil, and cotton, may have the biggest impact on consumer spending going forward. Today’s CPI report was further evidence of that. As we know, consumer spending drives around 70% of U.S. GDP.

Top S&P 500 Gains

Shares of AMD rose by nearly 4% after the semiconductor company released its latest graphics cards for gaming PCs. BlackRock’s stock price rose by over 3.5% following the investment management company posting Q3 revenue and EPS results that beat analyst estimates.

Top S&P 500 Losses

Shares of Delta fell by over 5.5% after the airline warned that rising fuel costs would impact its Q4 earnings. Align Technology’s stock price fell by nearly 5% following a Stifel analyst warning of “soft” quarterly results in the near future.

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