Markets under pressure, but late day buying trimmed losses

Dow finished up 19 (350 above early lows), decliners over advancers about 3-2 & NAZ sank 261.  The MLP index rose 1+ to the 178s & the REIT index lost 4+ to the 426s.  Junk bond funds were mixed & Treasuries had moderate buying.  Oil went up 1+ to the 65s on bets for higher demand from Europe & gold retreated

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Treasury Secretary Janet Yellen said that higher interest rates may be needed in order to stave off runaway economic growth in the US brought on in part by Ts in gov stimulus measures.  "It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat," Yellen said.  "Even though the additional spending is relatively small to the size of the economy, it could cause some very modest increases in interest rates."  Since the coronavirus pandemic began a little more than one year ago, Congress has approved nearly $6T in federal spending designed to keep the nation's economy afloat.  The exorbitant level of spending pushed the nation's deficit to a record $3.1T for the 2020 fiscal year & a high of $1.7T for H1-2021.  Congressional Dems are now pushing forward with passing another $4T in spending that would be the basis of Biden's sweeping "Build Back Better" agenda.  The pair of proposals, known as the American Jobs Plan & the American Families Plan, are supposed to be offset by tax increases on wealthy Americans & corps.  While Yellen – who led the Federal Reserve in 2014-2018 – said the US needs to focus on long-term fiscal responsibility, she argued the unprecedented level of spending is needed to invest in the economy & ensure that it's "competitive and productive."

Yellen warns interest rates may rise to make sure economy doesn't 'overheat'

India crossed 20M reported cases of Covid-19 today.  There were 357K new cases reported over a span of 24 hours, bringing the total to over 20M, according to health ministry data.  India's first cases were detected in late Jan last year & the country's total did not cross 10M infections until Dec, according to Johns Hopkins University.  But the next 10M cases were reported in the span of just under 5 months, mostly in Apr.  So far, at least 222K people have died from the disease, but that number is likely lower than the actual death toll.  Media reports suggest crematoriums and burial grounds are overwhelmed with bodies of those who died from Covid-19.  “The pandemic has now entered the small towns and the villages, and we are now quite worried about how much of a devastation it will cause in those areas where the health systems are not well developed enough to provide support, when even some of the big metros are struggling with the case load on hospitals,” K Srinath Reddy, pres at the Public Health Foundation of India said. 

India reports more than 357,000 new Covid cases as total crosses 20 million

Gold prices finished lower after Treasury Secretary Janet Yellen suggested that the Federal Reserve may need to raise interest rates to rise to keep the economy from overheating.  Yellen doesn't set interest-rate policy at the Treasury, but she formerly led the Fed.  Yellen said, “It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy.”  Jun gold lost $15 (0.9%) at $1776, following a 1.4% gain yesterday that helped the metal notch the highest settlement for a most-active contract since Apr 21.  US benchmark stock indices traded lower amid heavy losses for technology-related shares.

Gold prices finish lower as Yellen suggests a potential rise in U.S. interest rates

Oil futures posted a 2nd daily gain, with traders betting that fuel demand will strengthen in the US & Europe, as the market heads into the summer travel season.  Jun West Texas Intermediate crude rose $1.20 (1.9%) to settle at $65.69 a barrel. 

Oil up a second day on bets for higher demand as U.S., Europe ease COVID restrictions 

Janet's comments about higher interest shook investors, but they adjusted & buyers returned in the PM.  However techs were hit with selling all day.  So far, earnings have not given the big boost that was hoped for.  As shown in the Dow chart below, the stock market has had an excellent run.  It may take some time to rest in May.

Dow Jones Industrials

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