Dow advanced 433 (off early highs), advancers over decliners a relatively modest 2-1 & NAZ finished up 93. The MLP index rose 3+ to the 184s & the REIT index climbed 7+ to 421. Junk bond funds continued in demand & Treasuries were purchased. Oil dropped 2+ to the 63s & gold went up 3 to 1826 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
US coronavirus case counts fell further, with the nationwide average now at about 37K per day over the past week, according to Johns Hopkins University shows. the lowest level of average daily cases since Sep. The US is reporting an average of 2.2M daily vaccinations over the past 7 days & more than 46% of the country's population has received one shot or more. The vaccination numbers may get a boost in the coming weeks as the Centers for Disease Control & Prevention signed off on expanded usage of the vaccine for 12- to 15-year-olds, clearing the way for pediatricians to start giving out the shots across the country. Case counts in the US have dropped sharply over the past few weeks, with the country now seeing nearly ½ as many cases per day as the most recent high point just one month ago. The latest 7-day average of daily cases is about 37K, compared to more than 71K in mid-Apr. Daily case counts have declined by 5% or more in more than 40 states over the past week. The latest 7-day average of Covid deaths is 618 per day, down 9% from a week ago. About 2.2M vaccinations are being reported each day in the US. About 46% of Americans have received at least one vaccine shot & 35% are fully vaccinated.
U.S. Covid cases fall further, Pfizer’s vaccine cleared for 12- to 15-year-olds
Gold prices ended a bit higher, after touching their lowest intraday price in a week & posting declines over the past 2 sessions on the back of jitters centered on rising inflation. Yesterday, the data revealed that US consumer-price index soared 0.8% to match the biggest monthly increase since 2009, leading to a rise in Treasury yields & the $. The rate of inflation over the past year jumped to 4.2% from 2.6% in the prior month—the highest level since 2008. A recent resurgence in yields for gov bonds to their highest levels in weeks & a perkier $, on the back of fears of pricing pressures building in the aftermath of the COVID pandemic, have been part of the recent drag on the precious metal. The 10-year Treasury note eased back to 1.66%, while the ICE US Dollar Index was up less than 0.2%. Jun gold tacked on $1 to settle at $1824 an ounce, after touching a low at $1808. Gold futures pared some of their early losses after data today showed that wholesale prices increased sharply in Apr, with the producer price index up 0.6% for the month & 6.2% for the year.
Gold prices end higher after touching their lowest level in a week
The number of people working in local gov had barely recovered to its level before the 2008 last recession ended by 2019 when the coronavirus pandemic hit a few months later. Now, with 13.7M workers, about 6.5% lower than that 2019 peak, & hovering at a level last seen in 2002. Many analysts, particularly those who are politically progressive, believe austerity at the state & local level helped worsen the last recession, or at least prolonged the recovery. “According to the Bureau of Economic Analysis, state and local governments have been exerting a net drag on national economic growth since the end of 2009,” the Brookings Institution noted in 2012. On average, states that kept teachers, nurses, firefighters & other public-sector workers on the job essentially maintained the same level of private-sector employment over this period. In contrast, states that cut state & local gov employment lost, on average, 1.3% of jobs outside of state & local gov. The job losses as the pandemic hit in early 2020 were so severe — nearly 1.3M jobs were lost from local gov — that even after a few months of recovery this year, employment has been treading water at a level last seen nearly 2 decades ago, when the overall population was a lot smaller. As with all things, the corona-crisis may be different in this regard. Many municipal workers have the jobs that are among the most dangerous in a public-health emergency. Many may have left their roles voluntarily & some may not return.
Local-government employment in the U.S. is at a 19-year low
Federal Reserve Gov Christopher Waller said he was surprised by weak hiring & high inflation readings in Apr, but he joined a chorus of senior central bank officials who say the the economy still needs lots of help. Waller warned against putting too much weight on recent economic reports that suggested the US recovery is facing more headwinds. He said he expects job creation to speed up by the fall & that the recent increase in inflation will unwind once the global economy has fully recovered from the pandemic. “I have two messages today. The first is that, despite an unexpectedly weak jobs report, the U.S. economy is hitting the gas and continuing to make a very strong recovery from the severe COVID-19 recession,” Waller said. “My second message is that, despite the unexpectedly high CPI inflation report yesterday, the factors putting upward pressure on inflation are temporary, & an accommodative monetary policy continues to have an important role to play in supporting the recovery,” he added. Waller said a variety of factors have kept more people from rejoining the workforce even with job openings at a record high. He cited generous unemployment benefits, closed schools, limited child-care options & early retirements. “As vaccinations continue to climb, fears of reentering the labor force should decline. By September, most schools and daycare facilities are expected to fully reopen, resolving recent child-care issues for many families,” he added. “Finally, the enhanced unemployment benefits passed in response to the pandemic expire in September, and research has shown repeatedly that the job-finding rate spikes as unemployment benefits run out.” Waller also said the sharp increase in inflation should abate eventually, though he indicated it could take longer than he previously believed. He now expects inflation to exceed the Fed's 2% goal in 2021 & 2022 before tapering off. The Fed needs at least several months of economic data before the central bank decides to start easing support for the economy. The Fed has cut its key interest to near zero & is buying $120B in bonds each month to help keep the cost of business & consumers loans low. “Now is the time we need to be patient, steely-eyed central bankers, and not be head-faked by temporary data surprises,” Waller added.
Waller says Fed can’t be ‘head-faked’ by poor hiring and high inflation in April
Oil futures fell sharply, snapping a 4-day winning streak to settle at their lowest price so far this month, as the Colonial Pipeline resumed operations after shutting down late last week in response to a ransomware attack. Traders also tracked a continued surge in COVID-19 cases in India, the world's 3rd-largest oil importer. Colonial had shut down its pipeline, which provides around 45% of fuel needs to the East Coast, late last week after a ransomware attack. Gasoline shortages spread across the southeastern US in the wake of the shutdown. Colonial yesterday said it had initiated the restart of pipeline operations, with “all lines, including those lateral lines that have been running manually,” set to return to normal operations.” Today, it said that by midday it expected each market the company services to “be receiving product from our system.” West Texas Intermediate crude for Jun fell $2.26 (3.4%) to settle at $63.82 a barrel. Jul Brent crude dropped $2.27 (3.3%) to $67.05 a barrel. Both crude benchmarks marked their lowest front-month contract settlements since Apr.
Oil marks lowest finish since April as Colonial Pipeline resumes operations on U.S. East Coast
There was strong demand for stocks in early trading & but that diminished in the PM. NAZ dropped during midday trading & never fully recovered that decline as tech stocks have lost some of their zest they had early in the year. The Dow is back to where it was in mid Apr on the way up.
Dow Jones Industrials
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