Dow tumbled 633, decliners over advancers a very big 5-1 & NAZ sank 355. The MLP index declined 4+ to the 145s & the REIT index fell 6+ to the 374s. Junk bond funds were sold along with stocks & Treasuries remained in demand today. Oil was flattish in the 52s & gold dropped 11 to 1939 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The Federal Reserve said that it would leave interest rates near zero & reaffirmed its commitment to other easing policies amid fresh signs the US economic recovery from the coronavirus pandemic is slowing. The central bank, as widely expected, held the benchmark federal funds rate at 0-0.25%, where it has been since mid-Mar & said it would maintain its large-scale asset purchases (quantitative easing). “The pace of the recovery in economic activity and employment has moderated in recent months, with weakness concentrated in the sectors most adversely affected by the pandemic,” policymakers said in a statement. Officials reiterated previous guidance that the pandemic continues to "weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook," & added that the virus, including vaccine distribution, will ultimately dictate the course of the economy. The Fed sprang into action at the beginning of Mar to prevent an economic collapse by slashing interest rates, launching a dozen lending facilities to support the credit market & injecting nearly $2.8T into the economy -- an unprecedented amount.
Fed holds rates near zero amid signs US economic recovery is slowing
The US started 2021 with the deadliest month of the coronavirus pandemic. Jan's death toll has already surpassed the previous record number of fatalities set in Dec, when over 77K people in the US died of Covid-19, according to Johns Hopkins University. The pandemic has taken more than 79K lives so far this month. Over the past 7 days, the country has reported an average of more than 3300 Covid-19 deaths every day, up 12% compared with a week ago. There"s hope the death toll will slow down in coming weeks. The number of daily new cases reported in the US, which epidemiologists use as a leading indicator of whether the outbreak is growing or receding, has been dropping steadily in recent days as a surge driven by inter-state travel & holiday celebrations appears to subside. The US reported about 146K new cases yesterday, bringing the 6-day average of new cases down to 166K, down by about 17% compared with a week ago. The number of people currently hospitalized with Covid-19 across the US is also on the decline, though it remains worryingly high. More than 109K were hospitalized with the disease yesterday. That's off the peak of more than 130K hospitalized patients reported earlier this month. But the potential spread in the US of new, more contagious strains of the virus, combined with a slower-than-expected rollout of the vaccines, threatens to reverse progress made on combating the outbreak.
U.S. reports record number of Covid deaths in January
US airport screenings fell to the lowest level in more than six months as Covid-19 infections climb & the Biden administration introduces new travel restrictions. The Transportation Security Administration (TSA) screened just 468K at US airports on yesterday, down 71% from a year ago when more than 1.6M went thru those checkpoints. It was the fewest number of screenings since Jul 4. The CEOs of Delat Airliines (DAL) & United Airlines (UAL) recently warned that the industry faces a difficult start to 2021. Execs expect it to take several more months before more Covid-19 inoculations fuel a significant rebound in travel demand. American Airlines (AAL) & Southwest Airlines (LUV) will report results & their 2021 outlooks tomorrow. Travel demand usually falls early in the year. But in addition to a slow rollout of vaccines, bookings are further challenged by increased travel restrictions aimed at curbing the spread of the virus. The Biden administration this week extended an entry ban on most non-US citizens who have recently been in Brazil, the UK & much of Europe, & added South Africa to those rules as virus mutations from those areas spread. The US gov yesterday also started requiring travelers, including citizens, to show proof of a recent negative Covid test before boarding flights to the US. A senior Centers for Disease Control & Prevention official yesterday said the gov is also weighing whether to require coronavirus tests before domestic flights.
U.S. air travel falls to 6-month low as Covid infections, travel restrictions hinder
Gold futures suffered a 5th consecutive session of declines, with strength in the $ pressuring prices for the $-denominated metal. Prices then made modest moves in electronic trading shortly after a statement by the Federal Reserve on monetary policy. In ITS statement, which came after the gold futures prices settle for the session, the Fed held monetary policy steady, while noting that the sectors of the economy already damaged by the coronavirus pandemic are experiencing another round of pain. The central bank's interest-rate committee also said the pace of the economic recovery & employment has “moderated” in recent months. Meanwhile, a rebound in the $, which was up 0.4%, weighed heavily on trading in gold during the regular session. A stronger $ can undercut appetite for gold among those investors using other currencies. Feb gold fell $6 (0.3%) to settle at $1844 an ounce, after falling 0.2% yesterday. Today"s decline matched the longest streak of lower settlements for a most-active contract since a 5-session slide ended on Apr 30, which is also among the most-active futures contracts, settled today at $1848, down $5 (0.3%).
Gold ends lower as U.S. dollar strengthens; prices hold ground after Fed policy update
AT&T's (T) aggressive promotional strategy around the iPhone 12
launch paid off in terms of wireless subscriber growth, though it ate at
the company’s margins. The telecommunications giant added 1.2M postpaid subscribers
in q4, which was roughly double the
consensus view. “Wireless subscriber growth was the best it’s been in
years,” CFO John Stephens said, while postpaid phone churn of 0.76% was the 2nd-lowest total in its history. The company’s latest report also brought changes to the way the company
breaks out entertainment results as well as a candid assessment of the
challenges facing the film business during the pandemic For Q4, AT&T reported an overall net loss of
$13.9B ($1.95 a share) versus net income of $2.4B
(33¢ a share) a year prior. After a $2.70 adjustment per share
related to asset impairments, merger-amortization costs & other
factors, EPS was 75¢, down from 89¢ a year
earlier but ahead of the 73¢ estimate. Revenue for Q4 slipped to $45.7B from $46.8B, versus an extimate for $44.5B. The stock fell 61¢.
If you would like to learn more about AT&T, click on this link:
club.ino.com/trend/analysis/stock/T?a_aid=CD3289&a_bid=6ae5b6f7
AT&T sees strong wireless growth but pandemic still weighs on film business
Oil futures finished mixed, for a 2nd session, with global prices slightly lower, but US benchmark crude up after a gov report revealed a weekly drop of nearly 10M barrels in domestic crude supplies. The Energy Information Administration (EIA) reported that US crude inventories fell by 9.9M barrels last week. The data compared with the decline of 1.7M barrels forecast. The American Petroleum Institute yesterday reported a 5.3M-barrel decrease. Against this backdrop, West Texas Intermediate crude for Mar rose 24¢ (0.5%) to settle at $52.85 a barrel, but off the day's high of $53.30. Mar Brent crude, the global benchmark, finished lower, down 10¢ at $55.81 a barrel The EIA data also showed crude stocks at the Cushing, Okla, storage hub fell by 2.3M barrels for the week, while total domestic oil production edged down by 100K barrels to 10.9M barrels per day last week.
U.S. oil prices up as weekly domestic supplies drop by nearly 10 million barrels
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