Dow fell 127, advancers over decliners 3-2 & NAZ gained 102. The MLP index was off 2 to 195 & the REIT index fell 2+ to the 464s. Junk bond funds continued mixed & Treasuries were sold. Oil rose to the 92s & gold went up 6 to 1806 (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)
Key senators announced they reached a bipartisan infrastructure deal, but it was unclear if the plan had enough votes to pass as Majority Leader Chuck Schumer prepared to push it thru the chamber. “We now have an agreement on the major issues,” said Sen Rob Portman, the lead GOP negotiator. “We are prepared to move forward.” The Dem leading her party's infrastructure effort, Sen. Kyrsten Sinema, also said “we’ve got a deal” with “most” of the bill's text completed. She said she spoke to Pres Biden, who is “excited to move this forward.” Biden later said he feels “confident” about the agreement. Schumer said the chamber could hold a procedural vote to advance the plan as soon as tonight. The measure will need 60 votes to advance, or 10 Reps if all 50 members of the Dem caucus back it. 4 other Reps joined Portman in announcing the deal after they met with Senate Minority Leader Mitch McConnell. It was unclear how many more GOP senators were prepared to advance the plan.
Senators announce a bipartisan infrastructure deal, test vote could come as soon as Wednesday
The Federal Reserve held its benchmark interest rate near zero & said the economy continues to progress despite concerns over the pandemic spread. As expected, the FOMC concluded its 2-day meeting by keeping interest rates in a target range near zero. Along with that, the committee reiterated its view that the economy continues to “strengthen.” “The sectors most adversely affected by the pandemic have shown improvement but have not fully recovered” the post-meeting statement said. “Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.” The statement acknowledged that the economy has made “progress” toward the Fed's goals, though it will continue its monthly bond purchases. With the Fed likely on hold relative to interest rates at least until late-2022, investors have been looking for clues as to when the monthly bond purchases might start to be pulled back. The central bank currently is purchasing at least $120B a month in bonds, with at least $80B going to Treasuries & another $40B on mortgage-backed securities. Critics say the Fed's mortgage purchases are helping stoke another housing bubble, with prices at record levels even though sales have tailed off amid tightening supply. Some Fed officials have said they would be willing to entertain cutting back on mortgages first. Chair Jerome Powell, though, has said several times that the mortgage purchases are having only a minimal effect on housing. On the broader economy, the Fed has kept its foot to the accelerator some of the fastest post-World War II growth the US has ever seen Q2 GDP numbers will be out tomorrow & the estimate is for 8.4% annualized growth for the Apr-Jun period. That would be the fastest pace since 1983, not counting last year's outsized Q3 growth as the economy reopened from the pandemic shutdown.
Fed holds rates near zero, says economy has gotten better even with pandemic worries
McDonald's posted better-than-expected sales in Q2 as dining rooms reopened & new products like its crispy chicken sandwich brought in customers. Revenue jumped 57% to nearly $5.9B in the Apr-Jun period topping the forecast of $5.6. Global same-store sales, or sales at locations
open at least a year, rose 40.5% from the same period a year ago. It
was an easy comparison; the Q2-2020 was the low point of
the pandemic for the company, when lockdowns shuttered stores & sales
plunged 30%. But even compared with 2019, a year before the pandemic hit the US same-store sales were 7% higher. Menu
price increases, as well as the chicken sandwich & a meal promotion
with the South Korean band BTS, fueled US sales gains. Meal promotions have been a big sales driver over the last year. Dining rooms at restaurants in the US, also reopened at a rapid clip during the qtr. Outside the US, the easing of COVID restrictions in
markets like the UK & France also boosted sales. The
burger giant had for Q2. adjusted for one-time items, the company had EPS of $2.37, well above the $2.11 forecast. The stock dropped 4.57
If you would like to learn more about MCD, click on this link:
club.ino.com/trend/analysis/stock/MCD?a_aid=CD3289&a_bid=6ae5b6f7
McDonald's sales soar, boosted by BTS promotion, new chicken sandwich
Gold futures ended slightly lower, then extended their decline into the post settlement trading session after the Federal Reserve said the US economy has made progress toward reaching its standards for tapering its bond-buying program. The Federal Reserve concluded its meeting today. In a statement about a ½-hour after gold futures settled, it said the economy & job market have continued to strengthened & that higher inflation this year largely reflects transitory factors. It added that the economy has made progress toward toward reaching the maximum employment & price stability goals it set for starting to slow down its bond-buying program. Not enough progress has been made to start tapering yet, however, & the Fed will “continue to assess progress in coming meetings. In electronic trading, Aug gold was at $1798 an ounce, down from its ahead of the Fed statement. The contract fell by a dime to settle at $1799 an ounce today, after gaining pennies yesterday. The Dec contract, which also among the most-active contracts, tacked on chump change to end today's session at $1804.
Gold prices end slightly lower, extends decline after Fed policy statement
Oil futures ended higher,
with weekly declines in Us crude, gasoline & distillate supplies & strong overall demand for petroleum lifting US prices to their
highest finish in 2 weeks. The report from the Energy Information
Administration showed overall US petroleum demand in Jul 2021 is well
above the year-ago level and the next several months are likely to remain tight despite growing OPEC+ production. West Texas Intermediate crude for Sep climbed by 74¢ (1%) to settle at $72.39 a barrel, the highest front-month finish since July.
Oil futures end higher, buoyed by a fall in weekly petroleum supplies and strength in demand
There was a little buying after the Fed announcement But that enthusiasm faded in the last hour. The infrastructure bill (filled with pork) will be worked on. That, along with the companion bill with more pork, faces an uncretain future. Increasing the debt ceiling also must be done by Sat. A lot to do for a dysfunctional Congress!
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