Dow gained 116, advancers over decliners 3-2 & NAZ jumped 198 (just under a record close). The MLP index was fractionally lower to 159 & the REIT index lost 1+ to the 369s. Junk bond funds remained strong & Treasuries crawled higher in price. Oil reached 53 & gold rose 9 to 1839 (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)
Bank of America (BAC) reported Q4 profit that exceeded expectations
as the firm released some of the cash it had set aside for loan losses. EPS was 59¢,
compared with the 55¢ estimate. But revenue fell 10% to $20.2B, missing the estimate by $500M. The
bank released $828M in reserves, resulting in a $53M provision for credit losses in the final qtr of 2020. The
firm had booked $11.3B worth of provisions in the previous 3
qtrs. “In the fourth quarter, we continued to see signs of a
recovery, led by increased consumer spending, stabilizing loan demand by
our commercial customers, and strong markets and investing activity,”
CEO Brian Moynihan said. “The latest stimulus package,
continued progress on vaccines, and our talented teammates — who
performed well helping their customers through this crisis — position us
well as the recovery continues.” Some of the revenue shortfall
was from missed expectations in its trading division. The
firm posted $1.7B in fixed-income revenue, compared with the
$2.1B estimate on weaker
performance in macro products & mortgages. Earlier, BAC said that it planned to repurchase
$2.9B in shares in Q1, plus about $300M in
shares to offset stock given to employees. It will also
maintain its 18¢ quarterly div. The stock fell 25¢.
If you would like to learn more about BAC, click on this link:
club.ino.com/trend/analysis/stock/BAC?a_aid=CD3289&a_bid=6ae5b6f7
Bank of America posts profit that exceeds analysts’ expectations
Gold futures ended higher, clawing back from losses last week that drove the precious metal to its lowest settlement in 7 weeks. The move up for bullion comes against the backdrop of a softer $ & as the market digested testimony from Janet Yellen, Pres-elect Joe Biden's pick to run the Treasury Dept, to the Senate Finance Committee. Yellen said that “with interest rates at historic lows, the smartest thing we can do is act big.” The benefits will “far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.” Yellen also said that “without further action, we risk a longer, more painful recession now — & long-term scarring of the economy later.” Feb gold climbed $10 (0.6%) to settle at $1840 an ounce. Prices recouped part of Fri's 1.2% decline, which drove gold to its lowest finish since Dec 1 & prompted a weekly slide of 0.3%. Regular trading was closed yesterday for the federal holiday.
Gold bounces back from lowest close since early December as dollar slips
Janet Yellen testified that the US could afford a higher
corp tax rate if it coordinates with other economies around the
globe. “We look forward to actively working with other countries
through the [Organization for Economic Cooperation and Development]
negotiations on taxes on multinational corporations to try to stop what
has been a destructive, global race to the bottom on corporate
taxation,” she said in response to a question. “In
that context, we would assure the competitiveness of American
corporations even with a somewhat higher corporate tax,” she added,
referring to what could be a coordinated effort to bolster corp rates. During his campaign, Biden proposed raising
the corp rate to 28% from the current 21%. Prior to the 2017 tax
cuts, the US corp rate was 35%. Still, Yellen was quick to
caution that any plan to seek a higher corp rate could start only
after the administration felt that the US had overcome the
coronavirus. Her comments came during her testimony before
the Senate Finance Committee, which will debate whether she should be
confirmed for the Cabinet role. Biden “has
said that eventually, as part of a larger package that would include
significant spending and investment proposals — not now while the
pandemic is really depressing the economy — that he would want to repeal
parts of the 2017 tax cuts that benefited the highest-income Americans
and large companies,” Yellen added. “He
wants to reverse the law’s incentives to offshore operations and
profits. But he has been very clear that he does not support a complete
repeal of the 2017 tax law,” she said. Yellen also promised
that she would prioritize the needs of everyday workers &
ensure that the US can offer well-paying jobs to workers in cities &
rural areas. In that light, she defended Biden's $1.9T stimulus plan,
saying the bill would provide relief to struggling households &
businesses & offer the US economy the most “bang for the buck.” The
measure includes another round of checks, extended & enhanced jobless
benefits, funding for universities & the creation of a nationwide
vaccine program. The former Federal Reserve chair said higher
corp rates would come as part of a broader plan to reverse parts of
Pre Trump's 2017 tax law when the economy is strong enough
to stomach higher levies.
Yellen says U.S. can afford higher corporate tax rate if it coordinates globally
Halliburton (HAL) reported qtrly results that topped expectations amid strong revenue from its North America business. EPS was 18¢ on
revenue of $3.24B for Q4. The forecast called for EPS off 15¢ on revenue of $3.2B. North America revenue grew by 26% to $1.4B when
compared with the previous qtr due to increased drilling activity in
the region. That increase offset lackluster growth from its
intl markets. CEO Jeff Miller said he was
“optimistic about the activity momentum” in North America, adding he
expects intl drilling to recover later this year. “I
believe our strategic priorities will allow us to continue generating
industry-leading returns and strong free cash flow and solidify
Halliburton’s role in the unfolding energy market recovery,” said
Miller. However, adjusted operating income for 2020 fell to $1.4B from $2.1B a year earlier. The stock gave back 19¢.
If you would like to learn more about HAL, click on this link:
club.ino.com/trend/analysis/stock/HAL?a_aid=CD3289&a_bid=6ae5b6f7
Halliburton reports better-than-expected earnings on North America revenue jump
Oil futures settled higher, taking a cue from rallying equity markets & a weaker $ as traders shook off a cut in the Intl Energy Agency's (IEA) forecast for 2021 crude demand. Pres-elect Joe Biden last week rolled out a $1.9T coronavirus relief plan that includes cash payments to Americans & money for distributing COVID-19 vaccines. In testimony to the Senate Finance Committee, Janet Yellen, said the best course for American economic policy is to “act big.” Today the IEA cut its forecast for demand in 2021 by 280K barrels a day to 5.5M barrels a day. The bleaker outlook focused mainly on the start of the year, with a 600K-barrel-a-day cut to its forecasts for Q1 & a 300K-barrel-a-day cut to its forecasts for Q2. West Texas Intermediate (WTI) crude for Feb rose 62¢ (1.2%) to settle at $52.98 a barrel. Mar WTI crude, the most-actively traded contract, climbed by 56¢ (1.1%) to $52.98 a barrel. Mar will become the front-month contract at the end of tomorrow's session. Mar Brent crude, the global benchmark, gained $1.15 (2.1%) to end at $55.90 a barrel. WTI gained ground last week, while Brent slumped 1.6%. There was no settlement for WTI yesterday when US markets were closed.
Oil prices settle higher on stimulus hopes, weaker dollar
Dow Jones Industrials
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