E More Inflationary Pressures

There will be no blog Monday, Memorial Day. when US markets are closed. Today, we saw more evidence of worrying inflationary pressures from the personal consumption index hitting 3.1% in April over prior April, up sharply from the March rise of 1.9%, and up also against the consensus forecast of 2.9%. This is an index that leaves out the most volatile sectors: food and energy.

The full bill for the probably dead Biden budget and infrastructure plans is $6 trillion. It ain't gonna fly.

The impact was an almost immediate jump in US 10 yr treasury yields to 1.502% from the prior level of 1.444%. Note that there was a bit of good news in the numbers, as factory gate prices fell 3.1% from the March level. But the overall inflation level is at a 13-yr high.

The news also hit the hitherto rising loony. The Canadian currency fell 0.4% to $82.55, presumably on the assumption that inflation will cross the nearest border.

Equity, Fairness Equitable, Letters, Scrabble, Equal

Image Source: Pixabay

*We have a reporting company today, Höegh Partners LP, HMLP, the Norwegian-owned LNG shipping company, facing competition from its own parent from Bermuda, now privatized. The conference call was posted by seekingalpha.com yesterday without the results which came out today. Höegh said covid-19 was responsible for its huge revenues miss of $701.67 or 5.2% from the prior year, coming in at a mere $534.78 mn. It beat forecasts on earnings by 22¢/sh at a level of 61¢/sh. While I like the concept of using frozen LNG to ship frozen LNG (avoiding heavily polluting bunker fuel) I think the prospect of competition from its privatized parent will make this stock very risky. Moreover, the fiasco over results, for which the company pays Seekingalpha.com, and the lack of access to convertible share analysis elsewhere (even Value Line has dropped this), means I will be sailing solo, which I fear. It barely trades here.

*Also reporting was Johnson Matthey, JMPLY, up 7.73% to $92.1 today before the opening, but not covered by TD Ameritrade. It reported on its fiscal year 20-21 (to end March(. Shares of the catalytic converter firm dropped 1.5% yesterday but recovered today. It matched estimates for both profits and sales, although the former were lower because of higher costs which would not repeat this year, according to the British firm. As noted yesterday, the stock was boosted by Equita, in fact by analyst Massimo Borisolli according to Dow Jones. Analyst Laura Noy of Hargreaves Lansdown is quoted today as being more skeptical about its eLNO battery and hydrogen tech which she says will not hit the bottom line for a year because the partner deal with Plug Power will take that long to generate sales but will cost up to £600 mn in the current FY. Last year it was expected to only spend £486 mn. Pretax profits last year mostly from recycling platinum metals from cars came to £238 mn, vs FY 20-21 levels of £305 mn. Underlying operating profit (without exceptionals and one-offs) came to £504 mn, barely down from prior FY's level of £539 mn and over consensus estimate of £302.8 mn. Sales were up at £15.67 bn from prior FY £14.58 bn, and nicely over the consensus forecast of £13.89 bn. The dividend was raised to 50 UK pence, up from 11.125 p last FY. Sorry about this. I can only report what I can find. Plug Power was tipped today by BTIG. More materials below.

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