Dow rose 262, advancers modestly ahead of decliners & NAZ dropped 226. The MLP index added 1+ to the 184s & the REIT index shot up 5+ to the 229s. Junk bond funds were in demand & Treasuries crawled higher. Oil slid back to 64 & gold added 8 to 1839.
AMJ (Alerian MLP index tracking fund)
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Chicago Federal Reserve Pres Charles Evans said that employment & inflation will have to pick up substantially before he will change his position on monetary policy. Speaking after the hugely disappointing jobs report, the official said he still thinks the employment picture is strong, though significant areas of weakness remain. “It’s a little more complicated. We’re restarting the economy. A lot of sectors are experiencing growth pains,” Evans added. “Hopefully, it’s just a one-month kind of thing and we’re going to get better employment. I certainly think so.” Nonfarm payrolls increased by just 266K in Apr, well below the 1M estimate. That left total employment more than 7.5M below Feb 2020, the month before the Covid-19 pandemic declaration. Evans noted that the job market continues to receive strong policy support thru the Ts spent in Congress & the Fed's own policies. But as the economy has improved, investors have begun to wonder when the Fed might start pulling back on its measures. The central bank is holding short-term borrowing rates near zero & continues to buy at least $120B of bonds a month. He indicated that the key measures the Fed watches – employment and inflation – remain a good deal from levels that would persuade him to tighten. “I think it’s going to take quite some time for us to actually see it in the data, assess it,” he added. “I can’t give you a time frame.” In addition to the weak jobs number, inflation remains below the Fed's 2% average target. Evans said it likely will take months to hit that goal, adding that he would be comfortable if inflation ran a little hot for a while. “To average 2% you’ve got to be above 2% for some period of time,” he said. “So inflation rates of 2.5% don’t bother me as long as it’s consistent with averaging 2% over some period of time.”
Fed’s Evans says employment and inflation need to pick up before policy changes
The rate of average daily new Covid cases in the US fell to below 41K over the weekend, down 30% from 2 weeks ago & the lowest level since Sep, Johns Hopkins University data showed. The country has reported an average of 2M vaccinations per day over the past week, according to Centers for Disease Control & Prevention (CDC) data, down 40% from its peak level. The US is reporting 41K daily new infections, based on a 7-day average of data, down 30% over the past 14 days & 43% from the most recent high point, when the country was seeing about 71K daily cases in mid-Apr. It is also the lowest average since Sep 19. The latest 7-day average of daily Covid deaths is 667, far below the winter highs. Following 2.3M vaccinations reported administered yesterday, the nationwide average over the past week is 2M shots per day, according to the CDC. Though the daily rate has shown some signs of steadying in recent days, it is down significantly from the peak level of 3.4M shots per day on Apr 13. About 46% of Americans have received at least one dose & more than 1/3 are fully vaccinated.
U.S. Covid cases down 30% over past two weeks as country averages 2 million shots per day
The largest US fuel pipeline has been crippled shut since Fri after a cybersecurity attack — & it's not clear how long the outage will last. The operator of Colonial Pipeline fell prey to a ransomware attack on Fri, forcing all pipeline operations to stop. A hacker group known as DarkSide may be responsible for the attack. Colonial Pipeline said it is developing a system restart plan & that some smaller lines are now operational. The company added it will “bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations.” Colonial operates the country''s largest refined products pipeline & transports 2.5M barrels per days. It connects refineries from the Gulf Coast to more than 50M people in the South & East. The pipeline transports gas, diesel, home heating oil & jet fuel.
A top U.S. pipeline is crippled by a cyberattack. Here’s what you need to know
Stocks are taking time to rest after a long rally shown below. There is a lot of legislation in DC, but its future is uncertain. The fight against the virus continues because the virus has not given up.
Dow Jones Industrials
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