Dow gained 189 to close over 33K, advanncers over decliners 5-4 & NAZ went up 53. The MLP index inched higher to the 172s & the REIT index was flattish in the 402s. Junk bond funds were mixed & Treasuries had limited selling. Oil was off pennies in the 64s & gold went up 12 to 1743 (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 continue holding interest rates near zero & reaffirmed its commitment to other easing policies despite a resurgent economy that policymakers expect to rapidly strengthen in the coming year. The central bank, as widely expected, held the benchmark federal funds rate at 0%-0.25%, where it has been for the past year, & said it would so until "labor market conditions have reached levels consistent with the Committee's assessments of maximum employment and inflation has risen to 2 percent and is on track to moderately exceed 2 percent for some time." “Following a moderation in the pace of the recovery, indicators of economic activity and employment have turned up recently, although the sectors most adversely affected by the pandemic remain weak," the committee added. "Inflation continues to run below 2 percent." Despite the improved outlook, policymakers said in their first economic projections of 2021 that they expect rates to remain near zero thru 2023. Officials also changed their projections to reflect an increase in the nation's GDP this year; they now anticipate real GDP to surge 6.5% this year, compared to an increase of 4.2% that they forecast in Dec. On the unemployment side, the Fed forecast the rate will fall from 6.2% to 4.5% by the end of 2021. The Fed slashed interest rates to near-zero last Mar as the pandemic forced an unprecedented shutdown of the nation's economy. It also began buying $120B in bonds each month, a policy designed to keep credit cheap & help the nation recover from the worst economic downturn since the depression. But the economic outlook has changed drastically since policymakers met at the end of Jan: Coronavirus caseloads are dropping nationwide as more Americans are vaccinated, prompting state & local govs to ease pandemic-induced business restrictions. On top of that, Pres Biden last week signed into law a sweeping relief plan that will pump another $1.9T into the nation's economy.
Fed holds rates near zero, lifts growth outlook as US recovery strengthens
Gold futures settled lowe, pressured in part by strength in Treasury yields, then moved up after the Federal Reserve said it
doesn't plan to raise interest rates until the end of 2023. As expected, the FOMC left rates unchanged,
while continuing its Treasury & mortgage-backed security buyback. Gold for Apr was at $1741 an ounce in electronic trading shortly after the
Fed news, up from yesterday's settlement at $1727. Prices
had lost $3 for the session.
Gold settles lower, then climbs after the Fed policy decision
Oil futures ended with a loss, after the gov reported a 4th consecutive weekly climb in domestic crude inventories & International Energy Agency (EIA) deemed a “supercycle,” or sustained rise in prices for the commodity, unlikely in its latest forecast. The EIA reported that US crude inventories rose by 2.4M barrels last week. The followed increases reported by the agency in each of the previous 3 weeks. The forecast called for a climb of 400K barrels for crude stocks. The American Petroleum Institute reported a weekly decline of about 1M barrels. West Texas Intermediate crude for Apr fell 20¢ to settle at $64.60 a barrel. May Brent crude lost 39¢ (0.6%) at $68 a barrel. The EIA data also showed crude stocks at the Cushing, Okla, storage hub fell by 600K barrels for the week, while total US oil production was unchanged at 10.9M barrels a day. The IEA bolstered its forecast for 2021 oil demand growth by 100K barrels a day, while cutting its outlook for US supply. However, despite extended & deepened production cuts by OPEC & its allies (OPEC+) & forecasts for supply shortfalls in some parts of the market, “oil inventories still look ample compared with historical levels despite a steady decline from a massive overhang that piled up during the second quarter of 2020,” the organization said in its monthly report. In a separate report on the medium term outlook, the IEA said the forecast for global oil demand has shifted lower, & could peak earlier than previously thought if an increased focus on clean-energy initiatives by govs translate into stronger policies & behavioral changes resulting from the pandemic become ingrained.
Oil prices end lower as U.S. supply climbs a 4th week and after IEA deems supercycle unlikely
As expected, the Fed announcement lacked excitement. Afterward, the Dow went up 200 & then bobbed around 33K for the last 2 hours of trading. However NAZ rose during that time. The modest gain for advancers over decliners summarizes today's trading story. Very little was decided, other factors will come to play tomorrow.
Dow Jones Industrials
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