Dow shot up 304 to go over 34K, advancers over decliners better than 3-2 & NAZ went up 180 (above 14K). The MLP index rose 1+ to the 171s & the REIT index advanced 7+ to the 418s (a 14 month high which was a record). Junk bond funds saw a little buying & Treasuries were heavily purchased, taking the yield on the 10 year Treasury down a big 11 basis points to 1.53%. Oil crawled higher in the 63s following recent strength & gold soared 30 to 1767 (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)
Bank of Anerica (BAC) reported a jump in Q1 profit that breezed past estimates as it released reserves it had set aside to cover potential coronavirus loan losses. The bank released $2.7B from its reserves, betting on a swift economic recovery as more people get vaccinated & businesses return to normal. The #2 US bank by assets also reported a 12% fall in consumer
banking revenue to $8.1B in the qtr. Appetite
for new loans waned during the pandemic as customers spent less &
saved more & large companies relied on capital markets for funds
rather than their bank. The economy,
however, is poised to log its best performance in 37 years, thanks to
the White House's massive $1.9T pandemic relief package &
increased vaccinations against the coronavirus. The stock was off 1.14.
If you would like to learn more about BAC, click on this link:
club.ino.com/trend/analysis/stock/BAC?a_aid=CD3289&a_bid=6ae5b6f7
Bank of America profit more than doubles on reserve release boost
Gold futures scored their biggest daily gain since Mar, with prices settling at their highest in 7 weeks, as benchmark US bond yields pulled back & rising US tensions with China & Russia boosted the metal's haven appeal. Gold also moved up after a series of good reports on the health of the US economy, which provided some support for bullion given the threat of inflation. Tensions between the US & China over Taiwan have climbed, & the Biden administration yesterday expelled some Russian diplomats & announced sanctions against dozens of people & companies, partly in retaliation to Russia's interference in last year's presidential election. A closely followed report on US retail sales showed a 9.8% rise in Mar thanks to $1400 stimulus checks from the gov to consumers, reflecting accelerating economic growth in the aftermath of the COVID pandemic. Jun gold rose $30 (1.8%) to settle at $1766 an ounce. That was the highest settlement for a most-active contract since Feb 25 & largest one-day $ & % increase since Mar 9.
Gold prices mark highest finish in 7 weeks
US industrial production rose 1.4% in Mar, after a revised 2.6% fall in the prior month that was caused by severe winter weather, the Federal Reserve said. The gain in Mar was below expectations for a 2.7% gain. Production was held down by a steep decline in output from power utilities, as weather switched from unseasonably cold to unseasonably warm. Manufacturing output rose 2.7% in Mar after a 3.7% decline in the prior month. The output of motor vehicles & parts rose 2.8% after falling 10% in Feb. Mining output, which includes oil & gas exploration, jumped 5.7%, completely reversing a 5.6% drop in the prior month. Utility output fell 11.4% in Mar after a 9.2% gain in Feb. Manufacturing remains a bright spot as the economy emerges from the pandemic. The gains in Mar were broad based. Data from regional Fed banks indicated activity continued at a strong pace in Apr.
U.S. industrial output rebounds in March
2 US regional gauges of manufacturing sentiment showed strength in Apr. The Philadelphia Federal Reserve manufacturing index
jumped to a reading of 50.2 in Apr from a revised 44.5 in the prior
month. This is highest level in almost 50 years. The forecast called for
a reading of 42 after the initial reading for Mar of 51.8. The New York Federal Reserve's Empire State Index, meanwhile
rose to a reading of 26.3 in Apr from 17.4 in Mar, the New York Fed
said. That's the highest reading since 2017. The forecast was for a reading of 20. Any reading above zero indicates improving conditions. The Philly Fed index is based on a single-stand alone question about
business conditions, unlike the Empire survey which are composites based
on components. In Apr, the Philly Fed components were also strong. Price
pressures were evident in both reports. In New York, input prices hit
the highest level since 2008 while selling prices hit a record. In
Philadelphia, prices slipped only a bit after reaching a 40-year high in
Mar. Manufacturing remains a bright spot in the pandemic. The 2 regional
Fed surveys are used by economists to gauge the strength of the national
ISM factory index, which will be released on May 3. Last month, the ISM
index jumped to 64.7%, its highest level since 1983.
NY Empire State, Philly Fed factory indexes jump in April
The construction industry's confidence rebounded in Apr. The National Association of Home Builders' monthly confidence index increased by a point to a reading of 83 in Apr. Index readings over 50 are a sign of improving confidence. The index fell below 50 in Apr & May of last year amid the onset of the COVID-19 pandemic, but quickly rebounded until setting a record high in Nov. “While mortgage interest rates have trended higher since February and home prices continue to outstrip inflation, housing demand appears to be unwavering for now as buyer traffic reached its highest level since November,” Robert Dietz, chief economist for the National Association of Home Builders (NAHB), said. “NAHB’s forecast is for ongoing growth in single-family construction in 2021, albeit at a lower growth rate than realized in 2020,” Dietz added. 2 of the 3 main indicators that inform the overall index improved this month. The gauge of current single-family home sales rose one point to 88, while the index that measures sentiment regarding prospective buyer traffic held increased 3 points to 75. However, the index of expectations for future single-family home sales over the next 6 months fell by 2 points to 81. Optimism among home builders grew in the South & West regions of the country, but fell in the Northeast & Midwest. Home builders are in an enviable position. Ms of millennials are entering their prime home-buying years — they're getting married & having kids — as mortgage rates remain near all-time lows. That's a recipe for strong demand. Yet a decade of under-building & hesitance on the part of would-be home sellers mean there are very few existing homes listed for sale. As a result, buyers are being pushed into the market for newly-constructed homes. The biggest problem builders are facing right now is sourcing the materials needed to build homes. Lumber remains extremely expensive compared to a year ago. The shortage of semiconductors has caused delays in the deliveries of new appliance. Even steel is harder to come by & more costly than it was last year. All of these factors are driving up the costs to build homes & extending out the timelines for these projects — at a time when the country's sorely needs to extra housing inventory.
Home builders are growing more confident about the housing market — despite the rising cost of construction materials
Oil futures scored its 4th climb in a row, with prices extending their rise to the highest finish since mid Mar after upbeat monthly oil demand forecasts & a weekly decline in US crude inventories. West Texas Intermediate (WTI) crude for May added 31¢ (0.5%) to settle at $63.46 a barrel, after rising 4.9% on yesterday. Global benchmark Jun Brent crude picked up 36¢ (0.5%) to settle at $66.94 a barrel. Front-month contract prices for WTI & Brent crude have now climbed for 4 sessions in a row. Both benchmarks settled today at their highest in a month. Yesterday, the International Energy Agency lifted its demand outlook for crude & a US gov report revealed a 3rd-weekly drop in weekly inventories. In its monthly report, the International Energy Agency raised its forecast for global oil demand in 2021 by 230K barrels a day from its previous forecast. It now sees an increase of 5.7M barrels a day from 2020 to 96.7M barrels a day this year. Meanwhile, OPEC yesterday raised its forecast for global economic growth to 5.4% from 5.1%. In a weekly report also today, the Energy Information Administration (EIA) reported that US crude inventories fell by 5.9M barrels last week. That followed supply declines in each of the previous 2 weeks. The EIA data also showed a weekly climb of 300K barrels for gasoline supplies, along with a decline of 2.1M barrels for distillate stocks.
Oil adds to climb to one-month with 4th straight gain
The economic data was excellent, indicating the economy is making a good recovery. But those guys in DC seem very far apart when it comes to getting meaningful legislation passed. The Dow edged over 34K to a new record & NAZ finished above 14K, but just short of another record. However the advance-decline ratio is weak while nervous investors are buying gold & Treasuries
Dow Jones Industrials
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