Dow went up 57 with buying in the last hour, advancers over decliners better than 3-2 & NAZ rose 140. The MLP index gave back a fraction to the 168s & the REIT index was off 1+ to the 409s. Junk bond funds inched higher & Treasuries were purchased. Oil was slightly lower in the 59s & gold went up 14 to 1756 (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)
Dallas Federal Reserve Pres Robert Kaplan said that he expects interest rates to reach pre-pandemic levels as the economy recovers, which he said is "a healthy sign" and "not an alarming sign." Kaplan, a voting member of the 10-person rate-setting FOMC, made the comment one day after the release of minutes from the central bank's March meeting, which revealed that the central bank plans to continue the pace of its asset purchase program in an effort to meet its dual mandate of maximum employment & price stability. With their own forecasts projecting the strongest run of economic growth in nearly 4 decades, "participants noted that it would likely be some time" before the situation in the US improved enough for the Fed to consider pulling support. The Fed made no changes to its near-zero target interest rate or the $120B pace of monthly bond-buying at the Mar 16-17 meeting. Fed officials also boosted their outlook for the economy significantly as they surveyed advancements as it pertains to coronavirus vaccines & the Ts of $s in fiscal support. The median Fed policymaker projection for economic growth this year increased from 4.2% as of Dec to 6.5%, which, if achieved, would reportedly be the fastest rate of expansion since 1984. Kaplan referenced the Dallas Fed's updated outlook. "The economy is strengthening," Kaplan said. "Our outlook now with the Dallas Fed is for GDP growth this year to be in the range of 6.5% and I know there’s some private forecasters who have more aggressive forecasts than that." He then pointed to pre-pandemic interest rates, noting that in Feb 2020, before the onset of the coronavirus pandemic, "the 10-year Treasury [note] was in the range of 1.75 to 2%." "So I’ve been assuming and expecting that as the economy recovers, it wouldn’t surprise me to see rates back up to that level and I think that’s a healthy sign, not an alarming sign," Kaplan continued. The recent rise in the 10-year yield has rattled investors as it reached higher than the S&P 500's 1.5% div yield.
Dallas Fed president: Interest rates to reach pre-pandemic levels as economy recovers
Gold futures ended higher to mark their biggest daily
gain of the month so far & the highest finish since Feb,
supported partly by a decline in the $ & an expected rise in
inflation. Prices for the precious metal extended their gains after Federal Reserve Chair Jerome Powell said
the central bank wanted to see actual evidence of a strong economy
before it would even consider pulling back from its loose policy stance. He also reiterated expectations that an anticipated rise in inflation
this year would be temporary. Jun gold climbed $16 (1%) to settle at $1758 an ounce. That was the highest finish for a most-active contract since Feb
25 & largest one-day $ & % climb since Mar 31. Prices posted a little loss yesterday, the first
daily decline in 5 sessions. Gold has also registered losses in each
of the past 3 months. Gold-backed exchanged-traded funds also lost 107.5 metric tons in Mar,
marking outflows the 4th time in 5 months. The report also said Mar was
“second month in a row in which net outflows ranked the top 10 worst
outflows historically.”
Gold scores the biggest daily gain of the month to end at a 6-week high
Making vaccinations available globally is the correct & smart thing to do, Federal Reserve Chair Jerome Powell said. “Viruses are no respecters of borders and until the world really is vaccinated, we’re all going to be at risk of new mutations, and we won’t really be able to resume activity all around the world,” Powell said during a webinar on the global economic outlook hosted by the IMF. Powell urged all Americans to get vaccinated, saying the recent rise in COVID cases in the country was a risk to the economic outlook. In his discussion about the US economy, Powell maintained a dovish tone. Asked about the strong Mar job report — in which it was shown that employers added 916K jobs — Powell said the Fed wanted to see a “string” of similar reports. He said the Fed “will not forget” people who still have not been able to find work since the pandemic struck & added the central bank wanted to see actual evidence of a strong economy before it would even consider pulling back from its loose policy stance. Forecasts won’t be enough, he stressed. Powell again said he expected that an anticipated rise in inflation this year would be temporary. He pledged the Fed would act if it saw the public was starting to act like it expected prices to skyrocket.
Fed’s Powell says ‘we’re all going to be at risk’ until the world is vaccinated
Minneapolis Fed Pres Neel Kashkari said he wouldn't have a knee-jerk panic attack if inflation heats up to a 4% annual rate. “It would depend on why” inflation had hit 4%, Kashkari said. It would be important to ascertain whether the high inflation was due to something temporary, like a blockage in the Suez Canal, or something more that was more long-lasting, he added. Kashkari has been one of the most dovish regional Fed pres since he joined the Fed in 2016. It could be argued that the Fed's Open Market Committee, moved in his direction. Kashkari said he believes there still a lot of slack in the economy. He said the real unemployment rate is more like 9.1% than the 6% jobless rate for Mar. Kashkari said he supported the new Fed policy framework & added it meant the Fed would not “shortcut the recovery” as it had in the past. “We were always wrong. And it was the worker who paid the price,” he said.
Fed’s Kashkari says he would not panic if he saw a 4% inflation rate
Oil prices ended mixed, with the global crude benchmark slightly higher but US prices down, as traders weighed prospects for energy demand on the back of the rise in global cases of COVID-19. Some analysts also said the bigger-than-expected weekly increase in US gasoline stocks, which contributed to losses for futures prices of the fuel yesterday, was also to blame for the weakness in oil today. The Energy Information Administration (EIA) yesterday reported that gasoline supply was up by 4M barrels, while distillate stockpiles climbed 1.5M barrels for the week. The forecast was for weekly supply increases of 200K barrels for gasoline & 500K barrels for distillates. West Texas Intermediate crude for May lost 17¢ to settle at $59.60 a barrel, following a 0.7% gain yesterday. Global benchmark Jun Brent, however, edged up by 4¢ to settle at $63.20 a barrel after the contract rose 0.7% a day ago. Oil prices ended slightly higher yesterday after an initial retreat in values but investors may be rethinking the state of inventories & demand.
Oil ends mixed, with U.S. prices holding below $60 as demand concerns prevail
This was another unexciting day for trading. Earnings season begins shortly, with the big banks being to first to report. Expectations are high!!
Dow Jones Industrials
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