Dow shot up 229, advancers over decliners better than 3-1 & NAZ soared 332. The MLP index was little changed in the 145s & the REIT index advanced 7+ to the 379s. Junk bond funds continued mixed & Treasuries rose in price. Oil climbed 1+ to the 53s (more below) & gold went up 12 to 1864.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The next COVID stimulus checks could be smaller than $1400 & reach fewer people if a new plan put forward by some Rep senators is approved. The new proposal from a group of 10 GOP lawmakers calls for $1000 checks per person, rather than the $1400 sum proposed by Pres Buden. That would bring the direct payments to $1600, including the first payment authorized in Dec. Individuals earning up to $40K per year would be eligible for the full payments. Those with incomes at that threshold & above would see payments gradually phase out, & eligibility would be capped at $50K in annual pay. For married couples who file taxes jointly, the payments would begin phasing out at $80K in income and be capped at $100K. The checks would total an estimated $220B, per the Rep plan. Meanwhile, the total package, including additional funding for vaccines, child care, enhanced unemployment insurance & nutrition benefits, would cost an estimated $618B. In contrast, Biden's plan that calls for $1400 checks per person would cost an estimated $465B for the direct payments, or $1.9T total.
Republicans push for $1,000 stimulus checks. Here’s who would qualify for the money
The daily gyrations of the US stock market is not a major focus for monetary policy in normal times, & the recent spate of speculation fueled by social media hasn't changed the picture, a top Federal Reserve official said. “I’m not fazed by the fact that there’s speculation going on in the stock market,” Minneapolis Fed Pres Neel Kashkari said. “If one group of speculators wants to have a battle of wills with another group of speculators over an individual stock, god bless them,” Kashkari added. “I’m not at all thinking about modifying my views on monetary policy because of speculators in these individual stocks,” he said. Kashkari said he wouldn't worry even if there was a stock market correction. Fed Chair Jerome Powell was peppered with questions last week over whether the central bank's easy monetary policy was fueling stock-market gambling. Kashkari didn't think this was the case & added Fed interest-rate policy was too blunt a tool to take stock bubbles. The dot-com bubble popped in 2000 & let to a “minor recession,” Kashkari said. If the Fed had used interest-rate policy to tamp down stock-market speculation in the late 1990s, it would only have caused a “deeper recession,” he continued. “There’s a heck of a cost of raising interest rates to tamp down on the stock market,” he added.
Fed’s Kashkari not ‘fazed’ by rush of stock market speculation
The global tally of confirmed cases of the coronavirus-borne illness COVID-19 climbed above 103M with the US accounting for a ¼ of that number, as a snowstorm created blizzard conditions across the Northeast & shuttered vaccination sites. New York City Mayor Bill de Blasio said he did not want seniors, who are first in line for jabs, to drive to vaccine appointments during the heavy snowfall. At least 6 other states were also halting vaccination. The US added at least 111K new cases yesterday & at least 1875 died. Cases have been steadily declining, however, & have averaged 148K a day in the past week, down 32% from the average 7 weeks ago. Hospitalizations are also declining. There were 95K COVID-19 patients in US hospitals yesterday, down from 98K a day earlier & the lowest level since Nov 29. But those trends may soon reverse, according to Dr Michael Osterholm, director of the Center for Infectious Disease Research & Policy at the University of Minnesota & a member of Pres Biden's pandemic response team. Osterholm said that a Category 5 hurricane is coming in the shape of the more infectious strain that was first detected in the UK.& is expected to become the dominant strain in the US by spring.
U.S. tops 26 million COVID cases as blizzard conditions hamper vaccinations in Northeast
Europe's economic pain is expected to worsen before it gets better, potentially boosting the popularity of populist leaders & the need for more action from the ECB. While the Intl Monetary Fund (IMF) upgraded its global growth forecasts last week, it said the outlook for the euro zone had deteriorated. The Fund cut its growth expectations for the region by 1 percentage point to 4.2% this year. Germany, France, Italy & Spain — the 4 largest economies in the euro zone — all saw their growth estimates cut for 2021. According to estimates from the ECB, the euro zone economy could have contracted by more than 7% in 2020. European leaders are wary of new variants of COVID-19 & have been battling growing infection rates, mainly since Christmas. As a result, lockdowns have been extended or re-introduced, curfews tightened & schools closed in attempts to contain the spread. Vaccinations began in late Dec, but the rollout has been complicated across the region. There have been issues around supply, production & red tape preventing a faster distribution of the jabs & this has led to political infighting within the bloc. The IMF does not expect the euro area economy to return to end-of-2019 growth levels before the end of 2022.
Europe’s recovery set to take longer amid ‘disappointing’ Covid vaccine rollout
Oil futures settled higher,
finding support as the production-cut agreement reached in Jan by OPEC & their allies
took effect, including Saudi Arabia's pledge to unilaterally reduce
output by 1M barrels per day. Mar West Texas Intermediate crude rose $1.35 (2.6%) to settle at $53.55 a barrel
Oil futures settle higher as OPEC+ output cuts take effect
Futures for gold & silver ended sharply higher, with silver scoring its loftiest finish in about 8 years. Dealers attributed recent gains to the spillover of coordinated buying by individual investors gathering on social-media platforms, as was seen in shares of GameStop (GME) & AMC (AMC). Mar silver climbed by $2.50 (9.3%) to settle at $29.418, after touching an intrasession peak of $30.35. That marked the highest settlement for a most-active contract since in 8 years & the largest one-day $ gain since 2011. Prices also saw their biggest daily percentage rise since 2009. Last week, a focus by individual investors on shares of relatively small, heavily shorted companies like GME & others, sent their stocks soaring. Commodity experts say that group, which tends to gather on sites, may be turning their attention to silver. Although, as opposed to GME, individual investors may find it more difficult to influence the roughly $1.5T silver market.
Silver prices log highest finish since 2013 on 9% surge; gold also climbs
This was an unusually wild day for stocks led by the collapse of GME, plunging 100 (31%). Speculators who were long GME will long remember today. Now they are flocking to silver. Playing with fire is very dangerous but some have to learn the hard way. Meanwhile that excitement may be bleeding over to stocks. Stocks are looking more attractive to some investors. After all, they are risky. But all risks are not the same. The value of stocks is generally long time & typically the prime motivation for buying stocks.
Dow Jones Industrials
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