Dow was off 30, advancers over decliners almost 2-1 & NAZ added 43. The MLP index crawled up 1 to 200 & the REIT index rose 3 to the 455s. Junk bond funds fluctuated & Treasuries remained in strong demand. Oil finally closed above 70 & gold fell 2 to 1896 (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)
Sen Joe Manchin is resisting growing pressure from his fellow Dems to go it alone on Pres Biden's proposed $2.3T tax & spending plan, even as infrastructures negotiations between the White House & a coalition of Reps ran into a wall this week. Asked today whether he supported using budget reconciliation to
pass the package, known as the American Jobs Plan, Manchin said: "I’m
not even close to the thought process on that. We’re just trying to find
an infrastructure bill we can all agree on." His comments
come amid signs the bipartisan talks are coming to an end after months
of back & forth, with the 2 sides still deeply divided over the size & scope of a package to rebuild the nation's crumbling roads &
bridges. Although Biden is expected to meet later today with Sen Shelley
Moore Capito, the West Virginia Rep spearheading the
negotiations, she told reporters that she does not have plans to produce
a new counteroffer after Biden rejected a proposal to increase a $928B plan by $50B. The pres has said that he wants at least $1T in new spending.
Manchin pushes back against Dem-only infrastructure bill
The Senate is set this week to pass one of the largest industrial bills in US history to bulk up the nation's technology manufacturing in an effort to match competition from China. The bill, expected to easily clear the upper chamber with support from Reps & Dems, includes tens of Bs of $s for scientific research, subsidies for chipmakers & robot makers, & an overhaul of the National Science Foundation. The scope of the bill, the final product of at least 6 Senate committees & weeks of debate, reflects the many fronts in the US-China rivalry & offers a rare glimpse at bipartisanship for legislation to counter Beijing's economic & military expansion.
The proposal, subject to final changes, would:
- Provide $52B to support domestic semiconductor manufacturing
- Authorize $81B for the National Science Foundation from fiscal 2022 to fiscal 2026
- Authorize $16.9B for the Dept of Energy over the same period for research & development & energy-related supply chains in key technology areas.
- Bar US diplomats from attending the 2022 Beijing Winter Olympics
The final bill is expected to cost about $200B.
Senate set to pass massive bipartisan manufacturing bill that takes on China
Gold futures pulled back after touching highs above the key $1900 an ounce level, prompting prices to suffer their first loss in 3 sessions. Some firmness in the $ created friction for bullion & attempts by investors to propel the asset solidly above a $1900-an-ounce threshold, seen as a level of resistance for prices, failed. Thurs, US inflation report may provide the clearest impetus for commodity traders in the form of May consumer-price index. A hotter-than-expected read on the Apr CPI, which rose 4.2% year over year, temporarily rattled markets last month. Another elevated US CPI report could increase bets of a more rapid unwind of the Federal Reserve's easy-money measures, which were implemented at the height of the COVID-inspired market turmoil in Mar of 2020 & have been supportive for gold. Aug gold fell $4 to $1894 an ounce, after trading as high as $1906. Prices for the most-active contract haven't settled above $1900 since Wed, which was the highest finish since early Jan. On Thurs, in addition to the CPI data, investors may watch for policy guidance from the ECB, which is slated to update its monetary policy plans, a week before the Fed's 2-day meeting that kicks off Jun 15.
Gold prices mark first loss in 3 sessions after tapping highs above $1,900
Oil futures climbed back to their highest levels in more than 2 years, with US prices settling above $70 a barrel. Prices got a boost from expectations of further improvement in US energy demand. The Energy Information Administration (EIA) also raised its 2021 oil-price forecasts & traders looked ahead to an EIA report due tomorrow that's expected to show a 3rd-weekly decline in domestic crude inventories. A recent survey also revealed that major oil producers followed thru with their plan to gradually increase output in May. West Texas Intermediate (WTI) crude for Jul rose 82¢ (1.2%) to settle at $70.05 a barrel. Prices based on the front-month contracts, marked the highest finish since Oct 2018. Aug Brent, the global benchmark, added 73¢ (1%( to $72.22 a barrel, the highest since May 2019. Weekly data on US petroleum supplies will be released by the EIA tomorrow. The forecast is for a decline of 4.1M barrels. In its monthly report, the EIA forecast this year’s WTI crude prices at an average $61.85 a barrel, up 5% from the May forecast. Brent crude is expected to average $65.19 this year, up 4.7% from the previous forecasts. The EIA, however, slightly lowered its WTI & Brent price forecasts for 2022. Crude-oil production from OPEC+ climbed by 430K barrels per day in May. The survey data showed that OPEC+ compliance with its current production agreement has been “mostly steady,” at 111.45% in May, compared with 111.16% in Apr.
Oil futures climb back to more than 2-year highs, with U.S. prices above $70 a barrel
For most of the day, Dow stayed close to breakeven. The goings on in DC are being watched by traders & the big spending bills may be running into headwinds. Inflation data will get everybody's attention on Thurs. The bulls are happy to see the popular stock averages close to records.
Dow Jones Industrials
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