Dow jumped 227 (going over 35K), advancers over decliners only 4-3 & NAZ rose 69. The MLP index fell 1 to the 181s & the REIT index added 2 to the 461s. Junk bond funds inched higher & Treasuries were sold (more below). Oil was off pennies in the 71s & gold dropped 8 to 1796, falling below the important 1800 resistant level.
AMJ (Alerian MLP index tracking fund)
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Speaker Nancy Pelosi stood by her earlier demand that the House will not vote on the bipartisan infrastructure deal until the Senate also passes a sweeping, multitrillion-dollar spending package using budget reconciliation. "We are here to get the job done. We cannot respond to some of the legislation until the Senate acts," Pelosi, said. "We will not take up the infrastructure bill until the Senate passes the reconciliation measure." Lawmakers are in the process of trying to pass 2 proposals that make up the bulk of Pres Biden's "Build Back Better" economic agenda: A $1.2T bipartisan infrastructure bill, which focuses on mostly traditional projects like roads & bridges, & a $3.5T reconciliation bill, which includes funding for universal preschool, free community college, Medicare expansion & combating climate change. Although Biden initially suggested that he would veto the pared-down spending bill if Dems in Congress didn't simultaneously pass a larger reconciliation bill, the pre– facing an uproar from Reps – almost immediately recanted that statement & clarified that he would sign the agreement if passed on its own. Still, Dems have indicated their own support for making the passage of the smaller bill contingent on the success of a larger bill that would be passed using the procedural tool known as budget reconciliation, allowing the party to circumvent a 60-vote Rep filibuster. By tethering the bipartisan bill to the reconciliation package, Pelosi is trying to ensure that progressive members of her caucus rally around both measures. Because Dems have an unusually narrow advantage in the House (Pelosi has just 3 votes to spare), it's possible that left-leaning lawmakers could torpedo the bipartisan deal – which Rep Pramila Jayapal has previously threatened to do.
Pelosi reiterates no bipartisan infrastructure bill without reconciliation package
Reps on the House Budget Committee are asking congressional leaders to include spending controls with any debt ceiling increase, as the Jul 31 expiration of the debt limit suspension looms. Reps for weeks have said they plan to use the fact Congress will be forced to raise the debt limit draw focus to what they see as the country's "spending problem." The letter highlights what the Reps say are alarming statistics about the federal gov's spending & proposes actions Congress could take to rein that in. "With record amounts of government spending over the past two years accompanied by historic levels of inflation, in addition to the dramatically changed fiscal conditions of the country over the past five decades, it is imperative for Congress to take meaningful steps now to place our country’s finances on a more sustainable and appropriate path," the letter says. It cites Congressional Budget Office projections that the deficit this year will be $3T & that the gov is projected to spend more than $60T over the next 10 years – without even factoring in Dems' pending $3.5T plus spending plan. "Unchecked government spending is increasing inflation across the economy and harming American families – especially those on low and fixed incomes," the letter adds. It notes that previous debt ceiling increases have included spending controls & suggests some ways that Congress could control its future spending. Among them are pairing the debt ceiling bill with major federal spending cuts; federal targets for spending-to-GDP ratios; stepping up enforcement of previous spending reforms like Pay-As-You-Go & the Congressional Budget Act; & a balanced budget amendment. The letter is signed by all 15 Reps on the House Budget Committee. Congress cannot steer this country out of a fiscal crisis with a penny-wise & pound-foolish approach that ignores the unsustainable fiscal trajectory we are currently on," Smith said. "Already we are witnessing the effects of unchecked government spending on our economy with record inflation that is driving up the cost of food, clothing, and energy for American workers and families."
Republicans ask for spending cuts with debt ceiling bill, blame 'unchecked government spending' for inflation
Treasury yields climbed ahead of the release of Jul's flash purchasing managers' index readings. The yield on the benchmark 10-year Treasury note added 3 basis points, climbing to 1.288% & the yield on the 30-year Treasury bond gained 2 basis points, rising to 1.927%. Yields move inversely to prices & a basis point is equal to 0.01 percentage points. Markit's Jul PMI data, which should shortly give an indication as to the state of the US economic recovery. Treasury yields rebounded having fallen yesterday after jobless claims data came in higher than expected. The number of first-time unemployment insurance claims filed last week came in at 419K, versus the 350K filings expected.
Treasury yields climb with10-year rate topping 1.28%
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