Dow dropped 94 (above sesion lows), decliners over advancers 5-4 & NAZ was off 101. The MLP index continued fractionally lower in the 207s & the REIT index was off 5+ to the 454s. Junk bond funds rose in price & Treasuries were flat. Oil went up 1+ to the 72s & gold declined 6 to 1859 (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)
Pres Biden's push for a bipartisan infrastructure
bill could be thwarted by growing division among Dem lawmakers,
some of whom want to go it alone on a sweeping, multitrillion- $
spending package. A coalition of 10 senators reached an agreement last week for $579B in new spending that would be funded without any tax hikes,
according to a source familiar with the matter. The proposal would spend
$974B over 5 years & $1.2T if continued over 8
years. The senators did not release details of the
plan, buta source said it would remain focused on core infrastructure
projects. But some Dems want Pres Biden to abandon
bipartisan talks & pursue his initial $2.3T American Jobs Plan
unilaterally. That measure, first unveiled at the beginning of Apr,
would make massive investments in the nation's crumbling roads &
bridges, as well as transit systems, green energy, veterans' hospitals & care for disabled & elderly Americans. "I
wouldn't vote for it," Sen Bernie Sanders said of the
bipartisan proposal. "The bottom line is there are needs facing this
country. Now is the time to address those needs and it has to be paid
for in a progressive way given the fact that we have massive income,
wealth inequality in America." Without Sanders on board, the
bipartisan infrastructure package would need the support of at least 11
Reps in order to pass the Senate. And the Vermont
independent was not the only Dem to criticize the offer: Sen
Richard Blumenthal called the measure "very, very paltry
and disappointing," though he indicated he would be willing to hold his
nose & vote for the bill if all 50 members of the Dem caucus
agreed to vote for a bigger follow-up that would be passed using
reconciliation. At least with other Dems – Sens Ed Markey & Jeff Merkley – have hinted they will
oppose any infrastructure bill that does not allocate money toward
fighting climate change.
Biden’s bipartisan infrastructure deal push threatened by liberal infighting
The US hit another grim milestone in the
pandemic, reaching more than 600K Covid fatalities as the
nation races to administer at least one vaccine shot to 70% of adult
Americans by the Fourth of July. Deaths in the US have been
slowing for months, according to Johns Hopkins University data, due
largely to an aggressive campaign to vaccinate the nation's elderly &
medically vulnerable people who are most at risk from Covid. About 76% of Americans 65 & older, the group that accounted for a
majority of pandemic deaths, have been fully vaccinated, according to
the Centers for Disease Control & Prevention. Covid deaths in the US, which peaked in Jan at a daily average of
more than 3K fatalities, have fallen to a daily average of about 360
as of Sun, according to a 7-day average based on data compiled by
Johns Hopkins University. Deaths have gradually declined as vaccination
rates increased. Globally, there have been more than 176M
cases recorded & more than 3.8M deaths. With new variants emerging
that are more transmissible & could potentially lead to more severe
illness, federal health officials have pushed young adults to get their
vaccines as well.
More than 600,000 people have died from Covid in the U.S. as officials race to vaccinate more people
Even as the pandemic ebbs & Americans get back to work and play, they still want more space at home. But with home prices hitting record highs, demand for single-family rental homes is soaring – & so are the rents. Single-family rents were up 5.3% year over year in Apr, up from a 2.4% year-over-year increase in Apr 2020, according to CoreLogic. That is the largest gain in nearly 15 years. Rents for single-family detached homes (not townhomes), were up an even stronger 7.9% compared with a year ago, as millennials in particular seek more outdoor space. Nearly ½ of millennials surveyed by Corelogic & 64% of Baby Boomers, said they, “strongly prefer” to live in a single, stand-alone home. “Single-family rent growth showed a strong rebound in April 2021 with all price tiers back above their pre-pandemic rent growth rate,” said Molly Boesel, principal economist at CoreLogic. “While rent growth slowed last Apr at the start of the pandemic, the rate of rent growth this April was running above pre-pandemic levels even when compared with 2019 and shows no signs of diminishing.” With home prices continuing to gain at a double-digit pace & more potential buyers being priced out, demand for single-family rentals is unlikely to cool anytime soon.
Rents for single-family homes just saw the largest gains in nearly 15 years
The delta variant of the coronavirus now accounts for nearly 10% of new cases in the US, the Centers for Disease Control & Prevention (CDC) said. The agency declared the variant, which was first detected in India, a “variant of concern,” a designation given when there is increased evidence of factors such as transmissibility or severity or reduced effectiveness of vaccines or treatments. The change in classification “is based on mounting evidence that the Delta variant spreads more easily and causes more severe cases when compared to other variants, including B.1.1.7 (Alpha),” the CDC said. The alpha variant was first detected in the UK, and in Apr, it became the dominant strain in the US. Data for the 2-week period ending Jun 5 predicts that the delta variant accounts for 9.9% of cases in the US, the CDC said. For the 2-week period ending May 22, that figure was 2.7%. Still, there is evidence that the vaccines in use in the US are effective against this & other circulating variants. Still, the UK is seeing rapid spread of delta, leading Prime Minister Boris Johnson to delay the country's reopening by a month, to Jul 19.
Newly deemed ‘variant of concern’ delta accounts for 10% of U.S. cases, CDC says
Gold futures fell, extending their decline to lowest prices in a month, ahead of a policy update from the Federal Reserve tomorrow, which could set the tone for financial markets over the next few months. Gold for Aug fell by $9 (0.5%) to settle at $1856 an ounce following a 0.7% decline yesterday. Prices for the most-active contract marked another finish at the lowest since May 14. Gold prices are down by about 2% so far in 2021 & have struggled to sustain altitude above $1900 in recent trade. Gold prices initially moved up early today in the immediate wake of US retail sales & producer price index data. US retail sales showed a drop of 1.3% in May, suggesting the country is no longer getting a big boost from massive federal fiscal stimulus but consumers are still spending a lot more now than they did a year ago. US wholesale prices jumped in May for the 5th month in a row in a sign that inflationary pressures tied to the reopening of the US economy are likely to persist through the summer. The producer price index rose 0.8% last month. The New York Fed's Empire State business conditions index, however, fell 6.9 points to 17.4 in Jun, while US industrial production rebounded 0.8% in May.
Gold futures extend decline to lowest levels in a month
US oil futures topped $72 a barrel to
climb back to their highest finish in over 2½ years. Prices
got a boost from expectations of higher energy demand, ahead of a
weekly US gov report that's expected to show a 4th-straight
weekly decline in crude inventories. Analysts expect the
Energy Information Administration to report a fall of 4.2M barrels in crude supplies for last week, following 3 consecutive weekly declines. West Texas Intermediate
oil for Jul rose $1.24 (1.8%) to settle at $72.12 a barrel, the highest front-month contract finish
since Oct 2018.
U.S. oil futures settle at highest in over 2 1/2 years
Spending at US retailers slumped for the first time since Feb last month as more economic restrictions were reversed & Americans settled into a new sense of normal. US retail sales fell 1.3% in May, the Census Bureau said. The forecadt called for a median estimate for a 0.7% decline. The decline places monthly sales at $620B, just below the record-high seen in Apr. Apr sales data was revised higher to a 0.9% jump from an initially unchanged reading. While sales sit lower than the previous total, they're still up 28% year-over-year & 18% from pre-pandemic highs. The May 2020 sales report showed spending surge as stimulus included in the $2.2T CARES Act revived economic activity. It also marked the largest one-month sales jump in data going back to 1992. Spending in the clothing & accessories industry was up 200% year-over-year, while sales at food services & bars sat 71% higher from the year-ago period. The May dip in retail spending suggests that, after reopening unleashed pent-up demand, consumers are pulling back. Retail sales were among the few indicators to stage a V-shaped rebound early in the pandemic & quickly exceed pre-crisis levels. Now, as stimulus dries up & the final lockdown measures are unwound, spending is set to moderate. Such a trend would be good news for those fearing runaway inflation. The wave of consumer demand & various bottlenecks throughout the economy led price growth to accelerate sharply through the spring.
US retail sales slid from record highs in May amid waning reopening boost
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