Stocks opened the trading week on a mixed note with the S&P 500 up while the Dow was lower by 14 points to 24,448. Trading volume that was lower than a snakes belly in a wagon rut. IBD has markets in rally mode while BTS indicators for high yield are positive as well.
Amazon web services has made a new foray into the world of “distributed ledger technology” aka Blockchain. The company has released Blockchain Templates for Ethereum and Hyperledger Fabric, which will make it possible for AWS users to build their own Blockchain networks quickly and easily. Blockchain eliminates the need for a third-party intermediary “aka banks” by quickly creating a permanent, secure record of transactions. It will be interesting to see where this goes but Blockchain, which is the technology behind Bitcoin and other crypto currencies is being looked at by financial organizations as a secure electronic version of a “debit and credit ledger” used by bean counters to keep track of where the money goes and how well the business is doing.
Seattle based Alaska Airlines reported better than expected results today sending shares higher. Revenue passenger miles (RPMs) rose 5.9% but capacity grew 7.5% meaning the load factor fell to 80.1%. Wage and benefit costs were up 19% and this, combined with higher fuel costs led to a bottom line profit decline of 86%. While it might seem bad it was actually much better than expected thus the reason for the stock surge. Overall revenue was up 5% and going forward the company is forecasting continued growth in traffic and capacity.
Interest rates as measured by the 10 year US Treasury continue to creep toward the 3% level. This is due to strength in the US economy, rising inflation and strong corporate earnings. Many feel the higher rates will induce more volatility into equity markets. Speaking of inflation, oil prices are at the highest level since 2014 thanks to global economic growth and the threat of the US putting sanctions on Iran. The higher oil prices benefit US energy exporters but hurt consumers at the pump. WTI crude traded at $68.47 today up 10 cents.