Dow advanced 215, advancers over decliners better than 3-1 & NAZ went up 44. The MLP index rose 1+ to the 171s & the REIT index added 2+ to the 426s (near its record highs reach 13 months ago). Junk bond funds crawled higher & Treasuries were sold again. Oil was lower in the 62s & gold gained 12 to 1790.
AMJ (Alerian MLP index tracking fund)
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The Biden administration is reportedly teeing up another massive economic spending package that's focused on child care, paid family leave & other domestic priorities. A report said that Pres Biden plans to unveil the American Families Plan, the 2nd part of his multitrillion-dollar Build Back Better agenda, ahead of his address to a joint session of Congress on Apr 28. It comes just a few weeks after Biden released the American Jobs Plan, a $2.25T tax & spending initiative that would make massive investments in the nation's roads & bridges, as well as water systems, green energy, hospitals & elder care. The newest measure is expected to call for roughly $1T in new spending & about $500B in tax credits. Although details remain in flux, the proposal will likely be fully paid for with new tax increases aimed at wealthy Americans & investors. Some tax increases currently under consideration include restoring the top marginal tax rate to 39.6%, where it sat before the 2017 tax overhaul, taxing capital gains as ordinary income above a certain threshold & eliminating the stepped-up basis at death. Final numbers are fluid, but spending in the American Families Plan may break down along these lines:
- $225B for paid family & medical leave
- About $225B for child-care support
- $200B for universal pre-K schooling
- "Hundreds of billions" in education funding
- "Other sums" for nutritional assistance
Biden said on Mon that he is "prepared to compromise" ahead of a White House meeting with a bipartisan group of lawmakers.
Biden preparing to unveil $1T 'families plan' spending proposal this month
The global tally of confirmed cases of the coronavirus-borne illness COVID-19 climbed above 143M, as India reported a 7nth straight day of more than 200K new cases, overwhelming its hospitals & creating a drastic shortage of supplies, including medical oxygen. India's Health Ministry counted 295K new cases & 2K deaths, bringing its official death toll to 182K. India has counted 15.6M cases since the start of the pandemic, 2nd only to the US with 31.8M cases. The surge is being blamed in part on superspreader events — a recent Hindu festival brought together Ks of people for a ritual bath in the Ganges River where few wore face masks, & political leaders have held crowded election rallies in 5 states where tens of Ks gathered without face coverings. But India is also struggling with a “double mutant” strain that is understood to be more transmissible than the original virus. Called the B.1.617 strain, the new variant has 2 spike proteins instead of one. Scientists are uncertain how dangerous it is as India's ability to conduct genomic sequencing is being hampered by the current crisis & high case burden. The rapid spread of the new variant through Maharashtra state, home of financial capital Mumbai, is a key reason why the UK has been travel form India. Meanwhile the US vaccine program, meanwhile, continues to show good progress. The Centers for Disease Control & Prevention's vaccine tracker is showing that 272M doses had been delivered to states, 213M doses had been administered & 133M people had received at least one shot, equal to 40% of the population. A full 86M people are fully vaccinated, equal to 26% of the population, meaning they have received 2 shots of the 2-dose vaccines.
India records more than 200,000 COVID cases for seventh straight day as hospitals run low on oxygen
A sharp drop in mortgage interest rates sent homeowners & potential homebuyers to their mortgage lenders. Total mortgage application volume surged 8.6% last week compared with the previous week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. That is the first overall increase in weekly applications since the end of Feb. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548K or less) decreased to 3.20% from 3.27%, with points increasing to 0.36 from 0.33 (including origination fee) for loans with a 20% down payment. That rate was 25 basis points higher a year ago. Homeowners reacted swiftly to the potential savings. Applications to refinance a home loan jumped 10% for the week, but were still 23% lower than a year ago. The refinance share of mortgage activity increased to 60% of total applications from 59.2% the previous week. “Mortgage rates dropped to their lowest levels in around two months, prompting a small resurgence in refinance activity after six weeks of declines,” said Joel Kan, MBA's associate VP of economic & industry forecasting. “Borrowers acted on the decrease in rates for most loan types, with both conventional and government refinance applications showing gains.” Mortgage applications to purchase a home increased 6% for the week & were 57% higher than a year ago. That annual comparison, however, is skewed & will be for several more weeks due to the fact that the housing market essentially ground to a halt one year ago for the first 2 months of the pandemic. It then bounced back dramatically at the start of last summer. “MBA expects the purchase market to remain strong, with the recovering job market and supportive demographics fueling housing demand in the months ahead,” Kan added. “The average loan size for purchase applications increased after a few weeks of declines, as fewer homes available for sale make for a competitive buying market that is accelerating home-price growth.”
Weekly mortgage demand jumps 8.6% after interest rates fall to a two-month low
Thoughts about more gov spending are bringing out buyers. At the same time, demand for gold & Treasuries is strong by investors who recognize money does not grow on trees. The India story is very important & needs to be watched.
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