Dow crawled up 20, decliners slightly ahead of advancers & NAZ added 22. The MLP index was about even near 151 & the REIT index went up 1 to the 378s. Junk bond funds inched higher & Treasuries slid a little lower. Oil was bid higher in the 52s & gold fell 3 to 1851.
AMJ (Alerian MLP index tracking fund)
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The Intl Monetary Fund (IMF) has become more upbeat about the global economy, as coronavirus vaccinations are administered across the world. It is, however, worried about the risk new Covid variants pose to the post-pandemic recovery. According to its latest World Economic Outlook, the institution now expects the global economy to grow 5.5% this year — a 0.3 percentage point increase from Oct's forecasts. It sees global GDP (gross domestic product) expanding by 4.2% in 2022. “Much now depends on the outcome of this race between a mutating virus and vaccines to end the pandemic, and on the ability of policies to provide effective support until that happens,” the IMF's Chief Economist Gita Gopinath said. “There remains tremendous uncertainty and prospects vary greatly across countries.” The world has seen surging numbers of Covid-19 infections & deaths over the past few months, as new variants of the coronavirus have spread rapidly. These have been described as more infectious and are potentially deadlier than the original strain. As a result, many countries have stepped up their social restrictions, which has inflicted further economic pain. In fact, the IMF cut its GDP forecasts for the euro zone this year by 1 percentage point. The 19-member region, which has been severely hit by the pandemic, is now expected to grow by 4.2% this year. Germany, France, Italy & Spain — the 4 largest economies in the euro zone — also saw their growth expectations cut for 2021. Economic activity in the region slowed in the final qtr of 2020 & this is expected to continue into the first part of 2021. The IMF does not expect the euro area economy to return to end-of-2019 levels before the end of 2022.
IMF more upbeat on global economy; warns new Covid variants could derail growth
Senate Minority Leader Mitch McConnell said that he is ready to move ahead with a Senate power-sharing agreement after 2 Dem senators said they won't support ending the legislative filibuster, a central sticking point for the GOP in the talks. McConnell said his concerns about the filibuster rule, which requires 60 votes for most legislation to advance, had been assuaged by comments from Dem senators Sens Kyrsten Sinema & Joe Manchin, reaffirming their opposition to its elimination. Their statements earlier yesterday signaled that Dems don't have the votes needed to kill the filibuster, since it would take all 50 Dems, plus VP Kamala Harris, voting as a bloc to kill the filibuster unilaterally. Pres Biden said during his presidential campaign that he would prefer to preserve the filibuster, unless GOP resistance to his legislative agenda made eliminating it necessary. The Dem senators “agree with President Biden’s and my view that no Senate majority should destroy the right of future minorities of both parties to help shape legislation,” McConnell said & he pointed to a 2001 agreement—the last time there was a 50-50 Senate—as a model for 2021. Senate Majority Leader Chuck Schumer had previously embraced that approach, which gave the parties equal seats on committees & let nominees & bills advance to the floor even if a committee vote was tied.
McConnell agrees to Senate power-sharing agreement
Consumer confidence bounced back a bit in Jan as Americans looked past the high number of coronavirus cases & deaths toward greater availability of vaccines & an improving economy. The index of consumer confidence rose to 89.3 this month from a revised 87.1 in Dec, the Conference Board said. Last month's reading was the lowest in 5 months. The forecast called for a small decline to 88. Other measures of confidence, including the consumer-sentiment survey & daily report by Morning Consult, also rebounded in Jan. The Morning Consult poll is part of the MarketWatch Coronavirus Recovery Tracker. Consumer confidence is still far below pre-pandemic levels, however. The index stood at 132.6 before the viral outbreak last Feb. An index that tracks how consumers feel about the economy right now slipped in Dec. It fell to 84.4 from 87.2. The record spike in coronavirus cases over the winter dampened confidence & hurt the economy after more states reinstituted restrictions on individuals & companies. Yet another gauge that assesses how Americans view the next 6 months —the future expectations index — rose strongly, jumpinng to 92.5 from 87 & hit the highest level in 3 months. “Consumers’ expectations for the economy and jobs … advanced further, suggesting that consumers foresee conditions improving in the not-too-distant future,” said Lynn Franco, senior director of economic indicators at the nonprofit board. The next few months are likely to be dicey before the economy fully turns the corner. Americans are as worried as ever about the coronavirus, but they are more hopeful the worst of the pandemic is over. The number of coronavirus cases is on the decline again & vaccines are being delivered in ever-rising amounts.
Consumer confidence rebounds on vaccine hopes and improving economy
Earnings & the FOMC announcement tomorrow will be main drivers for the stock market in the short run (followed by Q4 GDP data on Thurs). The announcement about sharing power in the Senate.is very important in dysfunctional DC.
Dow Jones Industrials
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