Dow jumped 432 to a new record near 32K, advancers over decliners 2-1 & NAZ rallied 132. The MLP index added 3+ to the 161s & the REIT index rose 3+ to 395 (an 11 month high). Junk bond funds remained mixed & Treasuries were hit with selling pressure. Oil advanced 1+ to the 63s (another 13 month high) & gold was off 5 to 1800 (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's 2nd in command said the economy is primed to show big improvement this year owing to more Americans getting vaccinated & Congress approving more stimulus. “The development of several effective vaccines and the passage by the Congress in late December of a package of fiscal relief measures indicat,e to me that the prospects for the economy in 2021 and beyond have brightened and the downside risk to the outlook has diminished,” Fed Vice Chair Richard Clarida said. The Biden administration is set to up the ante with another relief package of almost $2T. The pending bill would extend & expand emergency federal unemployment benefits to $400 a week from $300 & provide up to $1400 in additional stimulus checks for eligible families. Clarida gave no indication on whether he would prefer the Fed to slow asset purchases before the end of the year. The central bank has been buying $80B in Treasuries & $40B in mortgage-backed securities each month to keep interest rates low & goose the economy. Low mortgage rates have help fostered the biggest boom in the housing market in more than a decade. Clarida said the economy would need to make “substantial further progress” before the Fed began to reduce purchases. Earlier this year he said he expected the Fed to keep buying $120B a month in bonds at least until the end of 2021. Clarida also emphasized the Fed's new strategy on controlling inflation will be more flexible & less tied to old rules. Inflation has been low for years & he expects it to stay that way. No longer will the central bank raise rates, for example, if the unemployment rate falls to a very low level, as it used to do in the past. “A low unemployment rate, in and of itself, will not be sufficient to trigger a tightening of monetary policy absent any evidence from other indicators that inflation is at risk of moving” significantly higher, Clarida said. He doubted that low rates & massive federal spending were fueling a big bubble in stocks or other assets. Some critics contend gov policies are creating bubbles.
Fed’s Clarida sees brighter economy in 2021, but he’s not worried about inflation
Shares of AstraZeneca (AZN) rose after a company
exec testified before Congress that the drug maker expects to
deliver 50M of its experimental COVID-19 vaccine in the US in
Apr if it's authorized before then. That would be enough to vaccinate
25M people. Its COVID-19 vaccine has been authorized
for use in some other countries, including the UK; however, it is
currently in phase 3 clinical studies in the US. "Based on current
projections, assuming [emergency use authorization], we expect to
deliver up to 50 million doses by the end of April," Ruud Dobber,
pres of North America business for AZN, told members of the
House Subcommittee on Oversight & Investigations. The trial finished enrollment in Jan
but the company has not yet released any clinical data for the US arm
of the study. The stock rose 79¢.
If you would like to learn more about AZN, click on this link:
club.ino.com/trend/analysis/stock/AZNa_aid=CD3289&a_bid=6ae5b6f7
Gold futures fell for a 2nd session, settling below the key $1800 mark for the first time this week. Treasury bond yields have risen to their highest levels in about one year. In his first day of congressional testimony yesterday, Federal Reserve Chair Jerome Powell tried to placate markets that had grown skittish about a rapid rise in bond yields as the economy attempts to recover from the COVID-19 pandemic. Gold prices fell $8 (0.4%) to settle at $1797 an ounce, marking the first finish below $1800 since Fri. The precious metal declined $1 in the previous session. Powell yesterday emphasized the Fed's commitment to keeping easy monetary policies unchanged for the foreseeable future, which helped stem heavy losses among tech companies, a group that tend to be the most sensitive to rising rates & are also seen as richly valued. Powell held his 2nd day of remarks about the state of the economy & market today to a House committee. He said Fed wants to see “actual data” showing the Fed moving closer to its goals before it would slow down the pace of bond-buying. Some commodity dealers said the outlook for gold remained precarious as the asset has been under pressure for weeks, but bullion bulls argue that the prospects for the yellow metal are upbeat given the expectations for further fiscal spending from the US gov & a long recovery for the labor market from the pandemic.
Gold down settles below the key $1,800 mark in 2nd day of losses
Toll Brothers (TOL) reported higher profit & sales for the fiscal Q1 as low mortgage rates, tight housing inventory, favorable
demographic trends & the pandemic helped boost homeownership demand. The luxury homebuilder said net income was $96.5M, up from $56.9M in the same period a year earlier.
EPS were 76¢, compared with 41¢ a year
ago. The forecast expected 46¢. TOL generated $1.56B in revenue, a 17% increase from
the year-ago qtr. Analysts expected $1.34B. Revenues from home sales, which represent a majority of its total revenue, rose 8.7% to $1.41B. Contracted homes rose 60% from a year earlier to 2874 while the contract value increased 68% to $2.51B. Homebuilding deliveries rose 10% to 1777 from last year The stock rose 1.72.
If you would like to learn more about TOL, click on this link:
club.ino.com/trend/analysis/stock/TOLa_aid=CD3289&a_bid=6ae5b6f7
Mortgage rates help spur Toll Brothers to profit
Oil futures settled at fresh 13-month highs, as data from
the US gov showed weekly crude supplies edged up on the back of
a sharp decline in distillate inventories. The inventory changes
hinted at larger supply losses in the weeks ahead, amid energy
production declines brought on by winter storms that swept across much
of the US last week. West Texas Intermediate crude for Apr rose $1.55 (2.5%) to settle at $63.22 a barrel — the highest front-month contract finish since
Jan 6, 2020. Apr Brent crude climbed $1.67 (2.6%) at $67.04 a barrel, with prices also at their highest since early January of last year. The most active May Brent contract added $1.70 (2.6%) to $66.18. The Energy Information Administration (EIA) reported that US crude inventories climbed by 1.3M barrels last week. That defied expectations for an average fall of 4.8M barrels. The EIA data also showed crude stocks at the Cushing, Okla, storage hub rose by 2.8M. The American Petroleum Institute reported a roughly 1M-barrel increase.
Oil prices mark 13-month highs as U.S. data hint at larger supply losses ahead
After 2 days of testimony by Powell, investors are feeling good. Additionally, the vaccine news is getting better. The daily number of new cases has fallen 80% from the peaks 6 weeks ago. The vaccine shots seem to be making the difference. Meanwhile the stimulus bill is stuck in the mud. Dow is at a new record & NAZ is 500 below its recent record.
Dow Jones Industrials
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