Markets fall although tech stocks on Nasdaq trim early losses

Dow sank 472, decliners over advancers 3-1 & NAZ was off 12 after heavy selling in early trading.  The MLP index declined 2+ to the 182s & the REIT index continued up 5+ to the 429s (in record territory).  Junk bond funds remained weak & Treasuries were sold, taking the yield on the 10 year Treasury up 2 basis points to 1.62%.  Oil rose in the 65s & gold was off 2 to 1835 after its recent rise (more on both below).

AMJ (Alerian MLP Index tracking fund)

Free Apple Analysis!

Bring Your Portfolio Into The 21st Century

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

US job openings climbed to a record high in Mar, highlighting the growing demand for workers as more Americans are vaccinated & states reopen their economies.  The number of available positions increased to 8.1M during the month, the highest in data that dates back to 2000, according to the Labor Dept's Job Openings & Labor Turnover Survey (JOLTS).  It marked an increase from the upwardly revised 7.5M open jobs in Feb.  Many companies have reported difficulties in onboarding new employees, & the report showed that job vacancies exceeded hires by more than 2M, the largest gap on record.  Nearly ½ – 44% – of small businesses have said they could not fill open jobs in Apr, according to the National Federation of Independent Business.  Experts have suggested there could be several reasons for the seeming labor shortage, including lack of available child care, fear over contracting COVID-19 or the extra $300-a-week boost in federal unemployment benefits.  The debate over the sweetened jobless & intensified last week following the release of the Labor Dept's Apr payroll report, which showed that employers added 266K jobs last month – sharply missing the 1M forecast.

Job openings surge to record 8.1M, but businesses struggling to hire workers

Travel looks set to continue its rebound during the upcoming Memorial Day weekend, which traditionally marks the start of the summer vacation season, with AAA Travel predicting a 60% year-over-year jump in the number of Americans hitting the rails, airports & roads— even as gas prices soar to levels not seen in 7 years.  Domestic destinations & motor trips will be the top picks for the more than 37M people expected to travel between May 27-31.  The rebound reflects both pent-up demand & higher vaccination rates, according to AAA Travel senior VP Paula Twidale.  “As more people get the Covid-19 vaccine and consumer confidence grows, Americans are demonstrating a strong desire to travel this Memorial Day,” she said.  “This pent-up demand will result in a significant increase in Memorial Day travel, which is a strong indicator for summer, though we must all remember to continue taking important safety precautions.”   An outbreak of new Covid variants or other unknown factors could impact the travel recovery, Twidale cautioned.  Also possibly putting the brakes on some road trips could be gas prices, which are expected to top $3 a gallon in many parts of the country due to high demand & a temporary shutdown of the Colonial Pipeline following a cyberattack.  The soaring price for fuel is the highest predicted national average for gasoline since 2014, according to AAA Travel.  It probably won't dent many Americans' determination to set out on the road, however.  More than 9 in 10 US vacationers, some 34M, will travel by car this Memorial Day — a 52% annual jump over 2020, although that';s still 9% lower than 2019.

Memorial Day travel to soar 60% even as gas prices rise nationwide

Gold prices marked their first loss in 5 sessions, with prices pulling back from their the highest levels since Feb as a rise Treasury yields dulled demand for the precious metal.  Moves in gold came as 10-year Treasury yields moved up to 1.62%, while the $ was around the lowest level in 2½ months.  Jun gold lost $1 to settle at $1836 an ounce, after the precious metal crawled higher yesterday, adding to a climb to the highest finish since Feb 10.  Some analysts are pointing to growing concerns that rising inflation in the US & other countries could prompt the Federal Reserve to remove its easy-money policies sooner than expected in the aftermath of the COVID pandemic.  Data on today showed that prices at factories in China rose at the fastest pace in 3½ years in Apr.  China's producer-price index rose 6.8% last month from the period a year ago, the National Bureau of Statistics said.  Gold is viewed as a hedge against inflation but if concerns about pricing pressures causes the Fed to raise interest rates that could undercut appetite for precious metals, which don't offer a coupon & compete against Treasuries.

Gold pulls back from a 3-month high to mark first loss in 5 sessions

The US economy is reopening & the recovery is gathering momentum but there remains a lot of uncertainty & the central bank should be patient with its easy policy stance, said Fed Governor Lael Brainard.  “The outlook is bright, but risks remain, and we are far from our goals,” Brainard said in remarks prepared for a talk.  Many economists talk about a coming “boom” for the economy, with GDP growth above 10% in coming qtrs.  But Brainard threw some cold water on the celebration, saying that the weaker-than-expected Apr job report was a reminder that “the path of reopening and recovery is likely to be uneven and difficult to predict.”  “Basing monetary policy on outcomes rather than the outlook will serve us well,” Brainard added.  Many economists think that the personal savings rate of 21% in the wake of stimulus checks will fuel a burst of spending in coming months.  But Brainard suggested this wasn't so clear cut.  She noted that the strength in domestic demand hinges in part on how concentrated savings is among wealthy households, who have less need to spend less overall & who may be exhausted from buying so many goods during the pandemic.  Another uncertainty is how much of the strong domestic demand will leak abroad as Americans stock up on imported goods, she noted.  Brainard also noted that the strong fiscal support is pushing the economy this year but the absence of more gov aid will cause relatively slower growth next year.  “The boost to spending from pent up demand this year as the economy reopens is also unlikely to be repeated next year,” she added.  She said the outlook for inflation is difficult to predict but said she saw a variety of reasons to suggest any rise associated with reopening the economy will be “largely transitory.”  “A persistent material increase in inflation would require not just that wages and prices increase for a period after reopening, but also a broad expectations that they will continue to increase at a persistently higher pace,” she said.  Past experience suggests that businesses will try to compete against rivals by keeping prices low by compressing margins & relying on automation to reduce costs, she noted.  The Fed should also remember that it has had a tough time anchoring inflation expectations at 2%, she added.

Fed’s Brainard suggests a boom economy is not a sure thing

Oil futures traded on a mixed note with parts of the US suffering from some fuel shortages as Colonial Pipeline works to restore the system that provides 45% of the fuel consumed on the East Coast by the end of the week.  West Texas Intermediate crude for Jun was up 6¢ to $64.98 a barrel & Jul Brent crude, the global benchmark, shed 5¢ to $68.27 a barrel.  Some analysts argued that the weakness in the energy complex had more to do with a selloff in risk assets generally, including global equity markets led by technology stocks, which was outweighing a number of supply-related concerns in the oil market.  The Organization of the Petroleum Exporting Countries left its forecast for global oil-demand growth for 2021 unchanged, while trimming its outlook for non-OPEC production.  In a monthly report, the Energy Information Administration's (EIA) forecasts for US & global benchmark oil prices were little changed for this year, but a bit higher for 2022.  The EIA forecast this year's West Texas Intermediate (WTI) crude prices at an average $58.91 a barrel & Brent crude at $62.26.  It raised its forecasts for WTI & Brent by 0.4% each, to $56.99 & $60.74, respectively.

Oil settles higher as traders eye gasoline demand and Colonial Pipeline developments

The strong earnings season suggests the risk of higher inflation & interest rates is growing.  Investors are nervous.  After the recent rally, stocks rested today although selling in tech shares on NAZ eased.  The goings on in DC & the fate of the big spending bills are also being watched.  At its highs yesterday the Dow went over 35K.  Now it's in the lower 34Ks.

Dow Jones Industrials