Dow inched up 1, advancers over decliners 5-4 & NAZ rose 41. The MLP index was up 1+ to the 176s & the REIT index added 1+ to the 399s. Junk bond funds hardly budged & Treasuries rose in price. Oil slid back 1+ to the 64s & gold went up 3 to 1723.
AMJ (Alerian MLP index tracking fund)
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The Empire State Manufacturing Index rose to a reading of 17.4 in Mar from 12.1 in the prior month, the New York Fed said. The forecast expected a reading of 15. This is the highest level of the index since last Jul & the 9th consecutive reading above zero, which indicates an expansion of activity. The new orders index slipped 1.7 points to 9.1 while shipments jumped 17.1 points to 21.1, a post-pandemic high. Unfilled orders rose 1.4 points to 4. The prices paid index rose 6.6 points to 64.4 in Mar, the 2nd month in a row for hitting a 10-year high & prices received rose 0.8 points to 24.2, a 2-year high. Expectations for business in the next 6 months rose 1.5 points to 36.4. The index for future employment rose to its highest level in 10 years, suggesting firms widely expect to add workers in coming months. Both the future prices paid & prices received indices continued to move higher. The Empire State index gets market attention because it is seen as a leading indicator of national manufacturing trends. In Feb, the Institute of Supply Management's manufacturing index, seen as the best gauge of factory activity across the country, climbed to 60.8%, its 9th consecutive month of growth & the fastest pace since the pandemic. Economists expect the factory sector to keep humming along as the drag from COVID-19 fades, although there are some supply disruptions causing bottlenecks & higher prices.
Empire State manufacturing index hits 8-month high in March
White House Chief Medical Advisor Dr Anthony Fauci warned state leaders that the nation's battle with the coronavirus is still “not in the end zone,” & urged Americans to adhere to public health measures as Europeans experience new infection spikes. “When I hear pulling back completely on public health measures, saying no more masks, no nothing like that, that is risky business,” Fauci said. “Don’t spike the ball on the five-yard line. Wait until you get into the end zone. We are not in the end zone yet,” he said, adding that prematurely pulling away from public health measures could prolong the pandemic. Fauci explained that the recent spike in cases throughout Europe was due in part to a relaxation of safety measures. “When you see that leveling off at a high level, there is always a risk of a surge back up and in fact, unfortunately, that is exactly what is happening in Europe right now,” Fauci added. “They [Europeans] thought they were home free and they weren’t and now they are seeing an increase,” he added. “If you wait just a bit longer to give the vaccine program a chance to increase the protection in the community, then it makes pulling back much less risky.” His comments come as Europe stumbles to administer vaccines & as some countries report a 3d wave of the highly infectious disease. “Eastern Europe looks very bad right now, Italy looks bad, but I think that the U.S. is in a much different situation,” Dr Scott Gottlieb explained. “I think we are in a different situation than Europe because of the vaccine-induced immunity that we are getting into the population,” he added. As of Sun, the US has administered 107M vaccines, according to the Centers for Disease Control & Prevention, & 27% of adults have received at least one dose so far. New Covid infections in the US, meanwhile, continue to decline & were down 11% compared to the week prior, according to data from Johns Hopkins University. However, infections remain high averaging more than 50K a day, according to the data. And more than 1400 people are still dying a day from the virus in the US on average.
Fauci points to Covid surge in Europe as warning against lifting U.S. restrictions right now
Treasury Secretary Janet Yellen believes that 2022 will see a return to full employment, crediting the recently passed COVID-19 relief bill as a major step down the path toward recovery. Pres Biden signed the $1.9T bill last week, putting into motion a number of extensions to existing programs as well as a fresh round of stimulus checks. Despite concerns about the ballooning $28T national debt, Yellen praised the massive bill, saying it will provide relief to people who need it, particularly the unemployed. The national unemployment rate hit 6.2%, roughly 10M unemployed Americans, but Yellen believes the bill will help return the rate to pre-pandemic levels. “I’m hopeful that if we beat the pandemic, we can have the economy back near full employment next year, and I think this is the package we need to do that,” Yellen added. “The most significant risk we face is a work force that’s scarred by a long period of unemployment,” Yellen cooontinued. A rapid rise in employment may have a knock-on effect of creating rampant inflation. Yellen downplayed those concerns, though, calling it a “small risk” that is manageable. "Prices fell a lot last spring when the pandemic surged. I expect some of those prices to move up again as the economy recovers in spring and summer," she explained. "That's a temporary movement in prices." Yellen cited the 1970s as an important lesson, when interest rates hit nearly 20% due to gov policies. The Federal Reserve has “learned” to manage expectations, & Yellen believes that the gov has the tools to handle rising inflation – should it occur.
Yellen projects full employment in 2022, interest rates to remain low
Stocks aren't doing much while they wait for the announcement after the FOMC meeting on Wed. Not much is expected from the Fed, but market watchers always get excited hoping for some drama.
Dow Jones Industrials
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