E Good Times For Gold

Today I begin with a long quote from Harvey Katz of Value Line:

Inflation is becoming a concern for Wall Street, with April data on producer (wholesale) and consumer prices proving unsettling. Specifically, the Producer Price Index (PPI) rose 0.6% last month, or twice the projected increase, and 6.2% in the past year. Pressures also were building on the consumer side, as the Consumer Price Index (CPI) added 0.8% in April and 4.2% for the 12 months. These troubling reports, along with climbing oil prices, supply bottlenecks, and selective shortages (especially of gasoline after a pipeline’s operations were interrupted) have been rattling some heretofore complacent investors.

Are such price concerns transitory, as the Federal Reserve maintains, or something more serious? It’s too early to be sure. So upcoming PPI and CPI data will be critical, as will housing prices and cost trends in manufacturing activity and homebuilding (with lumber especially important here). Meanwhile, the higher inflation already seen, the heavy sums allocated for stimulus and relief payments, and the possible future spending on infrastructure projects likely will contribute to at least a moderate sustained increase in prices.

The next few weeks will be telling, both because of the release of new inflation figures, but also due to some key Federal Reserve issuances (such as the Beige Book economic summation). A mid-June Federal Open Market Committee meeting, coupled with periodic commentary from Fed officials, also will be scrutinized for a sense of where the bank stands on inflation and interest rates.

Meantime, the economy continues to ramble along, with most reports suggesting the business backdrop is neither too hot nor too cold. Highlights here include declines in jobless filings, stability in retail sales, and gains in industrial production.” 

As every week, Mr. Katz ends by recommending that readers remain invested in the US stock market because that is how Value Line gets subscriptions and funding. But it has removed some of its usefulness coverage, like convertible stocks and bonds, which saved the group some money. I have been a subscriber for decades, starting as an investor in Paris.

Business newspaper article

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Drug Dealers

*Pres. Biden has asked the CIA to determine if covid-19 was leaked from a Chinese laboratory.  The AARP has called for rules to lower drug prices. Both of these snippets of news matter. 

*Bioline RX BLRX reported on its Q1 today starting with its phase III Genesis trial of stem-cell “mobilizer” motivafortide followed by transplants which were successful. BLRX plans to get a new drug application in by early 2022. In the Mar. quarter its R&D spending fell $1.1 mn to $4.3 mn and SG & A was flat from prior reporting period. It had an operating loss of $5.5 mn down sequentially from prior year Mar. level of $6.8 mn. However non-operating expenses rose to $4.6 mn from a prior year income of $500,000. Finance expenses came to $200,000 down from $300 mn in the prior Q1. Net loss was 6.6 mn. The Israeli firm has cash on hand of $6.2 mn, down from $6.7 mn in the prior Q1. Net cash from financiing activities topped $41.9 mn vs only $400,000 a year earlier. This is a risky play but transplants are needed. BLRX fell 1.36%.

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William K. 2 weeks ago Member's comment

Always informing me, always interesting, often providing serious education.