AMJ (Alerian MLP Index tracking fund)

United Airlines (UAL) forecast 2nd-qtr earnings well ahead estimates despite ongoing delivery delays from Boeing (BA), a Dow stock.  The airline expects to post EPS of $3.75 - $4.25 in the 2nd qtr, ahead of estimates for about $3.76.  Airlines make the bulk of their profits in the 2nd & 3rd qtrs, during peak travel season.  The carrier also reiterated its full-year EPS forecast of $9 - $11 a share.   It also lowered its annual capital expenditure estimate to $6.5B from about $9B.  UAL is also facing a Federal Aviation Administration safety review, which has prevented some of its planned growth.  A spokeswoman said earlier this month that the carrier will have to postpone its planned service from Newark, New Jersey, to Faro, Portugal, & service between Tokyo & Cebu, Philippines.  The airline said it would have reported a profit for the qtr if not for a $200M hit from the temporary grounding of the Boeing 737 Max 9 in Jan.  The airline posted a net loss of $124M (38¢ a share) in the first qtr compared with a $194M loss, or 59¢ a year earlier.  Revenue rose nearly 10% in the first qtr compared with the year-earlier period to $12.5B, with capacity up more than 9% on the year.  UAL cut its aircraft-delivery expectations for the year.  It expects it will receive just 61 new narrow-body planes this year, down from 101 it said it had anticipated at the beginning of the year & contracts for as many as 183 planes in 2024.  “We’ve adjusted our fleet plan to better reflect the reality of what the manufacturers are able to deliver,” CEO Scott Kirby said.  “And, we’ll use those planes to capitalize on an opportunity that only United has: profitably grow our mid-continent hubs and expand our highly profitable international network from our best in the industry coastal hubs.”  The stock jumped 4.98 (12%).

United Airlines jumps more than 10% on strong earnings forecast, cuts 2024 fleet plan on Boeing delays

Government hiring spree propping up the US job market

10-year Treasury rose less than 1 basis point to 4.659% & the 2-year Treasury was last at 4.968% after advancing by less than 1 basis point, trading just below the 5% mark it briefly crossed on yesterday.  Yields & prices have an inverted relationship & 1 basis point equals 0.01%.  Investors considered the path ahead for interest rates after comments from Federal Reserve officials, including Chair Jerome Powell.  Yesterday, he said there has been a “lack of further progress” on inflation so far this year.  Recent economic data has also shown growth & strength in the labor market, he added.  The Fed has repeatedly said that it is looking for data to show that inflation is easing sustainably & the overall economy is cooling before starting to cut interest rates.  But Powell yesterday indicated that policymakers had not yet reached this point.  “The recent data have clearly not given us greater confidence, and instead indicate that it’s likely to take longer than expected to achieve that confidence,” he added.  Earlier in the week, San Francisco Federal Reserve Bank Pres Mary Daly said there was “no urgency” for rate cuts to begin.  The comments fueled questions about whether there may be fewer rate cuts than expected this year & whether they may begin later than anticipated.

Treasury yields little changed as investors digest remarks from Fed officials

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