Diamonds and Dogs

4/9/25

Delta Air Lines (DAL) is up 5% following a beat on earnings. Sales rose 2.1% to $14.04 billion. Guidance for the current quarter was line, but the company pulled full year guidance due to trade tariff uncertainty and a slowing of longer term bookings. One advantage of the recent turmoil is lower fuel prices. Delta also said they made it clear to French airline, Airbus that they will not be paying tariffs on any aircraft deliveries.

Bonds are going the wrong way. If the tariffs slow down the economy, interest rates should be pulling back, but in fact interest rates are spiking. The 10-year Treasury note yield jumped 11 basis points to 4.37% and at one point overnight climbed above 4.51%. The 10-year yield helps decide rates on mortgages, credit card debt and auto loans. The 30-year Treasury bond yield was above 5% overnight, a level not seen since November 2023. The higher rates are hitting dividend paying utility stocks like Dominion (D) and NextEra Energy (NEE) both down 3%.