Dow recovered 517, advancers over decliners 5-1 & NAZ bounced back 148. The MLP index added 5+ to 180 & the REIT index jumped 8 to the 461s. Junk bond funds rose in price & Treasuries were flattish after yesterday's selling (more below). Oil crawled higher in the 67s & gold gained 6 to 1814,
AMJ (Alerian MLP index tracking fund)
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Pres Biden said that Congress needs to pass his sweeping economic agenda in order to tamp down rising inflation amid concerns that another burst of gov spending will act as an accelerant to already rapidly rising consumer prices. "As our economy has come roaring back, we've seen some price increases," he said. "Some folks have raised worries that could be a sign of persistent inflation. But that's not our view." Biden said that his administration was doing "everything we can" to address the higher-than-expected inflation, but he pushed back against fears of persistent inflation & maintained his stance the recent surge in consumer prices is temporary. "Look, we brought this economy back from the brink. There are going to be ups and downs," he added. "Reality is you can't flip the global economic light back on and not expect this to happen. As demand returns, there's going to be global supply chain challenges." The gov reported last week that prices for goods & services jumped by the most in 13 years, fueling concerns that a rapidly rebounding economy could lead to runaway growth. The Labor Dept said in its monthly report that consumer prices rose 0.9% from May & 5.4% over the past year. Excluding volatile oil & gas prices, core inflation jumped 4.5% over the past year, the largest increase since 1991. Reps have latched onto the inflation issues, blaming the $1.9T stimulus bill that Dems passed without any GOP votes in Mar for the price spike & attacking Biden for moving forward with another $4T in new spending. Biden's comments come as Dems begin to make headway on their 2-pronged economic plans: A bipartisan infrastructure bill that includes more than $500B in new spending & a $3.5T spending plan that would dramatically expand the gov-funded safety net. Senate Majority Leader Chuck Schumer set a deadline for a procedural vote to begin debate on the bipartisan infrastructure bill, as Dems simultaneously work out the details of a separate bill that would invest trillions in child care, education & support for families. Biden claimed the government investments would curtail rising inflation – rather than inflame it.
Biden calls for massive gov. spending to tamp down historic inflation
Some House Dems expressed dismay over the Senate’s bipartisan infrastructure talks yesterday during a private phone call-- further underscoring divisions within the party just days before a procedural vote scheduled for Wed. A report said that the conversation was described as "fiery." Rep Peter DeFazio, who was on the call, seemed to take comfort that the negotiations were limping along. He said the "whole thing falling apart is probably the best thing." Rep Salud Carbajal said that he was also on the call & "the whole process seemed like [bulls---]." Senate Majority Leader Chuck Schumer is pressuring lawmakers to reach an agreement this week on the pair of massive domestic spending measures, signaling Dems’ desire to push ahead aggressively on Pres Biden's multitrillion-dollar agenda. Jen Psaki, the White House press secretary, expressed her gratitude for Schumer's effort in a yesterday, crediting him for pushing "for progress in the Senate on bi-partisan legislation that will rebuild our nation's infrastructure." Schumer hopes to pass the bipartisan infrastructure bill that comes with a $1.2T price tag & a $3.5T budget resolution that will only receive Dem support. Specific details of the 10-year resolution have not been ironed out. The bill aims to tackle climate change, education & an expansion of Medicare. Schumer said if you include the 2 plans you get to "$4.1 trillion, which is very, very close to what President Biden has asked us for." Schumer hopes to land an agreement before Aug recess. Sen Rob Portman called Schumer's push an "arbitrary deadline."
House Dems unload on bipartisan infrastructure negotiations in private call
Treasury yields fell, with the 10-year rate
hovering around the 1.14% mark, extending a fall from the previous
session amid Covid-19 variant fears. The yield on the benchmark 10-year Treasury notefell 4 basis points to1.14% & the yield on the 30-year Treasury bond dropped 3 basis points to 1.79%. Yields move inversely to prices & 1 basis point equals 0.01 percentage points. The 10-year Treasury yield fell to a 5-month low of 1.18% yesterday, as investors grew concerned about the spread of Covid variants & the effect of inflationary pressures on the economic recovery. Covid
cases are rising in the US, with the spread of the delta variant
largely among the unvaccinated. The US is averaging about 26K daily
cases in the last 7 days, more than double the average from a month
ago, according to CDC.
Treasury yields fall, 10-year Treasury around 1.14%
Dow Jones Industrials
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