Dow went up 150, decliners barely ahead of advancers & NAZ added 118.  The MLP index hardly budged in the 258s & the REIT index slid back 1 to the 373s.  Junk bond funds inched higher & Treasuries had limited buying with yields sliding a little lower.  Oil edged higher in the 75s & gold was up 5 to 2056.

AMJ (Alerian MLP Index tracking fund)

Fed’s Neel Kashkari expects only two or three interest rate cuts this year

Ford (F) is rethinking its electric vehicle strategies, including “reassessing” the need for vertical integration of batteries, CEO Jim Farley said.  The Detroit automaker previously confirmed plans to delay or cut $12B in spending on all-electric vehicles, but the comments made yesterday are the most detailed about Ford's changing plans for EVs, sales of which are growing at a slower-than-expected rate.  “One of the things we’re taking advantage of in taking some timing delays is rationalizing the level and timing of our battery capacity to match demand and actually reassessing the vertical integration that we’re relying on, and betting on new chemistries and capacities,” Farley said.  He reiterated the company still believes EVs will grow, but noted widespread adoption for mass-market consumers won't happen until the costs are more in line with traditional vehicles.  EVs are typically thousands of $s more expensive than their gas-powered counterparts.  CFO John Lawler said in addition to reassessing the vertical integration in new battery chemistries, the company is further looking into adjusting installed production capacity to match demand & potentially delaying next-generation EVs to “to ensure they meet our criteria for profitability, given the new market reality.”  Its EV business, known as Model e, lost $4.7B last year, including $1.57B during the 4th qtr of 2023, offset by profits in the company's fleet & traditional internal combustion engine units.  Both businesses earned more than $7B each last year.  Lawler said that the unit will have to stand on its own “sooner rather than later.”  He also said the company is pulling a target for its EV unit that called for 8% margin by 2026.  The company had already set a target of 2M vehicles sold annually by that time.  As Ford pulls back & reevaluates the EV business, it intends to lean in on sales of hybrid vehicles, specifically trucks.  The company expects its hybrid sales to increase 40% this year.  It sold 133K hybrid vehicles in the US in 2023.  The stock gained 33¢.

Ford is reassessing its EV plans, including vertical battery integration

Treasury yields held steady as investors considered what could be ahead for Monetary Policy, especially when interest rates may be cut.  The yield on the 10-year Treasury was up by nearly 2 basis points to 4.11% & the 2-year Treasury  yield was last flat at 4.412%.  Yields & prices move in opposite directions & 1 basis point equals 0.1%.  Uncertainty about the outlook for monetary policy has been widespread, prompting investors to reassess the potential timetable for interest rate cuts.  That comes as comments from Federal Reserve Chair Jerome Powell suggested that rate cuts may not take place until later than many investors had been expecting.  He also indicated that central bank policymakers were looking for further evidence that the economy is easing & would be cautious when it comes to making decisions around interest rates.  Powell's comments not only led investors to believe rates may stay at their current level for longer than anticipated, but also that there may be fewer rate cuts than expected this year.  This fueled concerns about the impact of elevated rates on the economy & if they could lead to a recession in the US.  More Fed officials are due to make remarks today

Treasury yields are little changed as investors weigh monetary policy outlook

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