Markets surge after after House passes $1.9 Relief bill

Dow rose 464 (off session highs), advancers over decliners 3-1 & NAZ slid back 4 after yesterday's advance.   The MLP index jumped 6+ to the 174s & the REIT index added 3+ to the 387s.  Junk bond funds traded higher & Treasuries had a limited gain in prices.  Oil climbed higher in the 64s & gold went up 6 to 1723 (more on both below).

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The CEO's of America's largest companies plan on seeing recovery from the COVID-19 pandemic by the end of 2021.  The Business Roundtable, a coalition of the largest companies in the US employing more than 20M workes, released its Q1 2021 CEO Economic Outlook Survey, which found that business leaders are looking forward to increased sales, hiring & capital investment over the next year.  "These survey results suggest that the economy is recovering, which is encouraging news, as there are many American workers, families and communities who are still hurting," Walmart (WMT) CEO Doug McMillion, chairman of the Business Roundtable, said.  He continued: "Nothing can erase how tough the last year was, but eradicating the pandemic and strengthening the U.S. economic recovery can help us turn the page. For that to happen, it's important that as many people as possible get vaccinated when eligible and continue safety practices."  CEOs also expect GDP to grow 3.7% in 2021 & 72% of CEOs say conditions for their companies have already recovered or will recover by the end of the year.  That's an improvement from Q4-2020, when 67% of CEOs expected conditions to recover by that time.  Plans for hiring rose from 30 points to 88 between Q4-2020 & Q1-2021; plans for capital investment increased from 16 points to 100 & sales expectations surged from 17 points to 134 over the same time period.  "Thanks to American innovation, the heroic efforts of frontline workers and new resources to fight the pandemic, there is increasing reason to be optimistic about the prospects for a swift recovery," Business Roundtable CEO Joshua Bolten said.  "We urge policymakers to focus on policies that will support – and not inhibit – that recovery."

Here's when America's top CEOs expect the economy to recover

The House of Representatives passed a sweeping $1.9T economic package intended to offset the impact of the coronavirus pandemic, giving Pres Biden the first big political victory of his administration.  The bill will now head to the White House for Biden's signature.  The House vote was an almost entirely party-line 220 -211, similar to the 50-49 vote by which the measure passed the Senate Sat.  No House Reps voted for the bill, while just one Dem — Jared Golden of Maine — voted against it.  Dems touted the bill as both necessary to help Americans hit hard by the coronavirus pandemic that's claimed more than ½ a M lives in the past year & an anti-poverty measure.  Reps said it is bloated with unneeded spending just as the economy is set to surge with states lifting pandemic restrictions & the pace of vaccinations ramping up.  “Today, we have a real opportunity for change,” said House Speaker Nancy Pelosi, who noted the pandemic's anniversary & the Ms of Americans who remain unemployed.  “This isn’t a rescue bill. It isn’t a relief bill. It’s a laundry list of left-wing priorities that predate the pandemic and do not meet the needs of American families,” said House Rep Leader Kevin McCarthy.

House passes $1.9 trillion COVID relief package, clearing it for Biden to sign

Gold futures logged a modest advance, as a stable $ & retreat in yields for sovereign debt helped provide a runway higher for bullion.  A report on consumer prices appeared to momentarily weigh on precious metals, with assets perceived as risky gaining some buoyancy following the release of the inflation data.  The US CPI data for Feb showed inflation rising modestly, in line with expectations.  Inflation rose 0.4% for the month, but with food & energy stripped out, the gain was 0.1%.  Headline CPI picked up to 1.7% from 1.4% on an annual basis while the core 12-month increase dipped to 1.3% from 1.4%.  Apr gold added $4 to settle at $1721 an ounce, following a 2.3% rise on yesterday, which marked the biggest one-day $ & % rise for a most-active contract since Jan 4.  Commodity dealers were also keeping one eye on fiscal spending after the House passed a $1.9T coronavirus relief bill  & sent it to Pres Biden for his signature.  Fiscal spending plans, like the COVID aid package, have long been expected to give a boost to gold as it weighs on the $.

Gold strings together first consecutive gains in over 2 weeks

Oil futures lost their grip on early gains, drifting lower after gov data showed a sharp rise in crude inventories, albeit accompanied by a drop in product stocks.  Remarks by Russia's deputy prime minister, Alexander Novak, highlighting worries about producers outside of OPEC+ raising output & stealing market share also contributed to the softer tone.  West Texas Intermediate crude for Apr fell 11¢ to $63.90 a barrel.  May Brent crude, the global benchmark, was off 4¢ at $67.48 a barrel.  Novak warned of the possibility of lost market share in a televised meeting with Prime Minister Vladimir Putin.  He also said Russia would boost Apr production by 890K barrels a day relative to its output in May 2020.  The Energy Information Administration (EIA) reported that US crude inventories rose by 13.8M barrels last week.  That followed a hefty 21.6M-barrel climb the week before as domestic refinery activity continues to recover from mid-Feb winter storms in Texas.  The forecast a climb of 2.7M barrels for crude stocks.  The American Petroleum Institute reported a 12.8M-barrel climb.  The EIA data also showed crude stocks at the Cushing, Okla, storage hub climbed by 500K barrels for the week, while total domestic production rose 900K barrels to 10.9M barrels per day.

Oil ends higher in choppy session as traders weigh crude inventory rise versus product draw

The federal gov's budget deficit widened to $311B in Feb from $235B in the same month last year, the Treasury Dept reported.  The forecast had expected the deficit to widen to $255B in Feb.  The deficit is a record for the month.  Total spending was $559B in Feb, up 32% from the prior year.  Spending went up on unemployment benefits from the Labor Dept & spending by the Health & Human Services.  The gov is not keeping track of all the money spent to fight COVID-19 pandemic.  Total receipts also rose 32% in Feb to $248B.  For the fiscal YTD, the budget deficit swelled to $1T compared with $624B over the same period a year ago.  Experts said the US is set to run $3T deficits for 2 years in a row.  The gov continues a spending spree when Congress passes the $1.9T Covid relief package.  After that, the Biden Administration is expected to soon announce a “Build Back Better” infrastructure & green-energy measure that could cost $1-3T. 

U.S. budget deficit widens in February as spending to battle pandemic continues

The Dow had a strong advance to another record while NAZ digested yesterday's big gain.   The inflation report underscored that underlying inflation trends in the economy were remaining muted even as economic activity & mobility began picking up, suggesting the Federal Reserve could in turn maintain its easy monetary policy posturing & avoid raising interest rates in the near-term to stave off fast-rising inflation.

Dow Jones Industrials