Markets rise as the S&P 500 closes above 4000 for the first time

Dow rose 171, advancers over decliners 3-1 & & NAZ jumped 233.  The MLP index added 2+ to the 167s & the REIT index gained 5+ to the 406s.  Junk bond funds were a little higher & Treasuries continued in demand.  Oil shot up 2+ to the 61s & gold climbed 14 to 1730 (more on both below).

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Any hopes that DC could scrape together a bipartisan infrastructure package took a hit.  Senate Minority Leader Mitch McConnell told reporters the more than $2T plan the White House just unveiled “is not going to get support from our side.”  The proposal would invest in roads, bridges, airports, broadband, water systems, electric vehicles & job training programs, & raise the corp tax rate to 28% to offset the spending.  The Rep also vowed to oppose the broader Dem agenda under Biden, who passed his first major initiative this month in the $1.9T coronavirus relief package.  “I’m going to fight them every step of the way, because I think this is the wrong prescription for America,” McConnell added.  Unless 10 Reps break with McConnell or Biden revises the plan to win GOP votes, his comment all but assures Dems would have to use budget reconciliation to pass the infrastructure bill on their own.  Biden has said he wants to win GOP support for the plan.  But Reps have opposed any tax increases, saying they could hinder the US economic recovery.  Even if they use reconciliation, Dems will have to balance competing interests among themselves to approve a bill.  Some progressive lawmakers have called to include more ambitious measures to fight climate change in the plan.  Meanwhile, Senate Majority Leader Chuck Schumer & other lawmakers from New York & New Jersey have pushed to include a repeal of the cap on state & local tax deductions in the plan.  The change is expected to benefit higher-income taxpayers.  Biden & his advisors got initial Rep input on the Covid relief package, then moved to pass it on their own when they realized the GOP would accept only a much smaller bill than they sought.  They appear to be taking a similar approach on infrastructure.  “We’ll have a good-faith negotiation with any Republican who wants to help get this done. But we have to get it done,” Biden said yesterday.  No Reps in Congress voted for Biden's broadly popular Covid plan.  Corralling GOP support for another multitrillion-$ bill — which includes tax hikes — appears more challenging.

McConnell says GOP won’t support Biden’s infrastructure plan, vows to fight Democratic agenda

Gold futures settled higher, supported by a retreat in bond yields & weakness in the $, a day after the precious metal posted the worst quarterly loss since 2016.  Prices found some support from data on US initial jobless claims, which showed a climb of 61K to 719K, compared against estimates for a gain of 675K.  The most-active Jun gold contract climbed $12 (0.8%) to settle at $1728 an ounce, after a 1.8% gain a day ago.  Markets will be closed for Good Friday.  For the holiday-shorted week, gold prices tracking the most-active contracts lost 0.2%.  The move for gold also comes as the 10-year Treasury note yield at 1.685% retreated below 1.7% & the $ was pulling back from its recent rise.  Softness in the $ can make assets priced in the currency more appealing to overseas buyers & a pull back in bond yields can lower the opportunity costs of investing in precious metals, which don't offer a coupon, against risk-free gov debt.  Some experts speculated that a combination of unwinding of bearish bullion bets & buying at the end of Mar, as well as rebalancing following the first 3 months of 2021 might be helping to give a lift to beleaguered precious metals.  Investors are still also breaking down the details of Pres Biden's infrastructure plan, & assess the likelihood of the bills passing thru Congress, which would affect the outlook for gold as market participants assess the prospects of the impact of further fiscal stimulus & tax hikes on the economy.

Gold prices score a second day of gains after sharpest quarterly drop in 4 years

General Motors (GM) vehicle sales were buoyed by strong consumer demand in Q1 as fleet sales cratered & an ongoing semiconductor chip shortage shuttered some assembly plants.  GM sold 642K vehicles during in Q1, up 3.9% compared with a year earlier, when Covid-19 started forcing dealerships & auto plants to shutter in Mar.  Analysts expect sales across the industry to be up about 8-9% compared with Q1-2020 despite automakers reeling from a shortage of semiconductor chips.  GM said retail sales to individual consumers increased 19% in Q1, while fleet sales to corp & gov clients declined 35% from a year earlier.  The automaker expects consumer demand to remain resilient throughout this year.  “Consumer confidence and spending will continue to increase due to stimulus, rising vaccination rates and the progressive reopening of the economy,” GM's chief economist, Elaine Buckberg, said.  “Auto demand should remain strong throughout the year.”  GM's Buick, Cadillac & GMC brands saw double-digit sales increases during Q1, while Chevrolet – its largest brand – declined 1.7%.  The stock rose 25¢.
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club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7

GM’s first-quarter sales up 3.9% on strong consumer demand

Oil futures gained more than 3% after OPEC & its allies (OPEC+) officially announced an agreement to gradually lift output starting in May.  The group of producers announced they approved an adjustment to the production levels for May, Jun & Jul.  Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman said OPEC+ will raise daily oil production by 350K barrels in May, 350K barrels in Jun & by 441K barrels in Jul.  He also said Saudi Arabia will gradually roll back the voluntary 1M-barrel per day cut it's had in place since Jan, easing the per-day reduction by 250K barrels in May, by 350K barrels in Jun & by 400K barrels in Jul.  West Texas Intermediate (WTI) crude for May rose $2.29 (3.9%) to settle at $61.45 a barrel after trading as high as $61.75 in the wake of the producers' decision.  Jun Brent, the global benchmark, added $2.12 (3.4%) at $64.86 a barrel after taping an intraday high of $65.  Markets will be closed for Good Friday.  For the week, based on the front-month contracts, WTI prices rose 0.8% & Brent crude climbed 0.7%.  In opening remarks at the OPEC+ meeting today, Prince Abdulaziz said that “the reality remains that the global picture is far from even, and the recovery is far from complete.”  “On the supply side, we have continued to play our part,” he said.  “Compliance with the levels we agreed has — once again — been impressive,” with new aggregate levels set at 113%.  But “we have to approach the coming weeks with the same admirable commitment.”  In opening remarks at the OPEC+ meeting today, Prince Abdulaziz said that “the reality remains that the global picture is far from even, and the recovery is far from complete.”  “On the supply side, we have continued to play our part,” he added.   “Compliance with the levels we agreed has — once again — been impressive,” with new aggregate levels set at 113%. But “we have to approach the coming weeks with the same admirable commitment.”  “Until evidence of the recovery is undeniable, we should maintain this cautious stance,” Prince Abdulaziz added.  Those comments had fed expectations that OPEC+ would leave production cuts in place. 

Oil settles over 3% higher as OPEC+ officially announces plan to gradually lift output

The Dow had a good day & tech was strong all day.  Investors are returning to tech stocks.  The proposed bill for infrastructure with lots of pork should have a tough time getting thru the Senate.  Higher taxes on corps has ugly implications for the economy.  Prince Abdulaziz (brother to MBS) runs Aramco (the largest company in the world).  As usual, the Saudis have a cautious attitude about economic growth.  Have a good long weekend with the popular averages near or at record highs.

Dow Jones Industrials