Its tax filing day! Markets ended the day in the red with a 54 point loss at 34,327. Trading volume was mixed and IBD now lists markets are being under pressure due to last week’s volatility which saw the Dow lose about 1.1% in a wild trading week driven by inflation fears.
The Economy and Earnings
Last week an east coast refined products pipeline network was taken off line by a cyberattack. While flows of gasoline, jet fuel and diesel have been largely restored the impact caused shortages and increase prices along the eastern seaboard and in states like Kentucky, Texas and Alabama. Colonial Pipeline provides about half the fuel for the east coast and gets product from a refining hub near Huston. Its pipeline and storage facilities stretch from Texas to New York. This price spike is adding to an increase in gasoline prices across the country. AAA last Tuesday noted the national average for gas stood at $2.985 per gallon up 60% from a year ago.
Consumer and producer prices rose by the most in over a decade. The annual CPI figure surged to 4.2% in what most economists are calling a distortion. Items within the report that added fuel to the fire were a jump in used car costs, steel, lumber, gasoline, oil, pork….you name it. Producer prices posted a headline reading of 6.2%. The jump in inflation is due to supply chain issues, a 24% jump in money supply sparking demand and the “base effect” which means that prices at this time last year was lower than dirt and demand came to a screeching halt.
Items of Interest
Shares of AT&T bolted higher today after it called “uncle” and agreed to merge its WarnerMedia unit with Discovery in a deal which paves the way for the combined company to compete with Netflix and Disney. AT&T invested $83 billion in Time Warner about 3 years ago and today’s news means they will net back $43 billion and have a roughly 60% ownership of the new combined firm which is valued at $150 billion. Once again the deal needs to be approved by regulators but as of today investors are liking the news and sending shares of Ma Bell higher in early trade.
John passed his latest CFP test which was the module on taxation. Bill takes his test on Wednesday.