Dow gained 140, advancers over decliners 2-1 & NAZ crawled up 7 following recent strength. The MLP index remained in the 188s & the REIT index was steady in the 433s. Junk bond funds rose again.& Treasuries was hit with selling, bringing higher yields. Oil crawled up pennies in the 66s & gold was hit with profit taking, falling back 9 to 1894
AMJ (Alerian MLP index tracking fund)
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The US jobs market edged closer to its pre-pandemic self last week as initial jobless claims totaled just 406K last week, the Labor Dept reported. While that level is still well above the pre-Covid norm, it is the closest to the previous trend since the crisis began in Mar 2020 & a decline from the previous week’s 444K. The forecast was looking for 425K initial jobless claims. For the week ended Mar 7, 2020, just before the pandemic became a factor, claims totaled 212K. As of May 23, 2020, claims totaled nearly 1.9M. While claims had remained elevated through the pandemic period, they've recently made a marked shift lower amid the economic reopening spurred by accelerated vaccines & sharp decline in Covid cases. Multiple states also have been shutting down their extended benefits programs as business reopens & unemployment levels decline. Continuing claims fell sharply, declining by 96K to 3.64M, bringing the 4-week moving average down to 3.7M. That number runs a week behind the headline claims total. Those receiving benefits under all programs also declined, edging down to 15.8M amid continuing decreases in those applying thr special pandemic-related programs.
Jobs picture shows more improvement as unemployment claims slide
A group of moderate Senate Reps unveiled a scaled-back infrastructure proposal worth close to $1T, a counteroffer to the massive tax & spending plan introduced by Pres Biden earlier this month. The
counteroffer, which is up from the Reps' initial $568 proposal,
focuses on core infrastructure projects, including roads & bridges,
public transit, ports & waterways & broadband. The measure would be
paid for by repurposing unused federal funds previously allocated for
coronavirus relief efforts. "We want to focus on actual infrastructure," Sen Pat Toomey
said during morning news conference. "We can reach an
agreement if we focus on those items." Toomey drafted the proposal along
with Sens Shelley Moore Capito, John Barrasso, Mike Crapo, Roger Wicker & Roy Blunt. The proposal will not affect the 2017 tax law that
slashed the corp tax rate to 21%. Biden has proposed raising the
rate to 28% to pay for his plan. While the $928B offer is much closer in line to Biden's target,
there remains an ideological gulf between the 2 sides over what
constitutes infrastructure. The GOP's plan notably does not include new
spending on a wide range of areas where Biden has recommended Bs,
such as electric vehicles, elder care & veterans hospitals. Barrasso
today lambasted those spending proposals from the White House as
"socialism camouflaged as infrastructure."
Republicans unveil counteroffer to Biden's massive spending plan
Pending home sales took a hit in Apr as the shortage of affordable housing remains a headwind for house hunters. The Pending Home Sales Index dropped 4.4% to a reading of 106.2 for
the month as reported by the National Association of Realtors (NAR). However,
contract signings jumped 51.7% year-over-year. "Contract
signings are approaching pre-pandemic levels after the big surge due to
the lack of sufficient supply of affordable homes," said Lawrence Yun,
NAR's chief economist. All regions except the Midwest saw a
month-over-month drop. In the Midwest, the index increased 3.5% to
101.1, up over 39% compared to the same period a year ago. "Some buyers from the expensive cities in the West and Northeast, who
have the flexibility to move and work from anywhere, could be opting
for a larger-sized home at a lower price in the Midwest" Yun explained. Recent data points on housing are showing the red hot market is cooling. Mortgage applications fell
4.2%, according to the Mortgage Bankers Association's weekly survey. Interest in refinancing fell as well by 7% compared with the prior
week. As of today, the average rate for a 30-year fixed mortgage fell to
2.95%, down from last week when it averaged 3% as tracked by Freddie
Mac.
Pending home sales pummeled
The jobless claims data was encouraging for investors but the infrastructure bill in DC is dead in the water with both sides very far apart. It looks like the Dems will ram their bloated bill thru even though the economy is doing reasonably well. And that has the makings of aggravating inflation. After a strong opening, stocks are drifting lower.
Dow Jones Industrials
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