Dow went up 222, advancers over decliners 4-3 & NAZ slid back 14. The MLP index dipped lower in the 176s & the REIT index recovered 2+ to the 461s. Junk bond funds fluctuated & Treasuries were a tad lower. Oil was off almost 1 to the 67s & gold rose 12 to 1744.
AMJ (Alerian MLP index tracking fund)
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US consumer price gains remained hot as the economic recovery continued to take hold. The Labor Dept said that consumer prices rose 5.4% year over year in Jul, matching the prior month''s gain as the fastest since 2008. Prices increased 0.5% last month, slowing from Jun's 0.9% increase & topping the 0.5% gain that was expected. Core prices, which exclude food & energy, rose 0.3% month over month & 4.3% annually. In Jun, core prices increased 0.9% & 4.5%, respectively. Prices for shelter, food, energy & new vehicles all increased in Jul. The food index rose 0.7% while the energy index rose 1.6%, buoyed by a 2.4% gain in gasoline prices. Used car prices rose 0.2% in Jul, far less than the 10.5% spike in Jun. In the last report, used car price gains accounted for more than 1/3 of the increase. The Federal Reserve has insisted the recent price gains are "transitory" & that those increases will mitigate once production issues are resolved. Fed Chair Jerome Powell has admitted that timing is uncertain.
Prices rose 5.4% year over year, matching fastest rise since August 2008
The Senate voted to pass the framework of the hotly contested, $3.5T budget reconciliation package after a nearly 15-hour-long vote-a-rama. If there was any camaraderie on the bipartisan infrastructure bill, it seemed to have taken a holiday The vote was procedural & the initial step in the budget reconciliation process that could eventually allow Dem to pass the package without a single Rep vote. The vote was 50-49 & straight down party lines. Sen Pat Toomey said the resolution paves the way "for legislation that would redefine the very role of the federal government in the lives of average Americans, all under a 50-50 Senate, a razor-thin majority in the House, and a President who was elected on moderation. After Democrats shamelessly used COVID as an excuse to pass a partisan $2 trillion liberal wish-list in March, Budget Chairman Bernie Sanders has brought the rest of his party along for another $3.5 trillion that seeks to increase dependency of the middle class on the federal government, re-engineer the economy to benefit liberal interest groups, and provide tax breaks to the ultra-wealthy in Democrat-run states," Toomey said. Sen. Chuck Schumer praised the vote & said the budget will "bring a generational transformation on how our economy works for average Americans."
Dems pass staggering $3.5T budget framework without a single GOP vote
The White House said it takes inflation "incredibly seriously" after the Senate passed a $1T bipartisan infrastructure spending package. White House press secretary Jen Psaki was asked whether
officials were concerned that the increased gov spending could
lead to inflation. "We
take inflation incredibly seriously; it is, of course, under the
purview of the Federal Reserve," Psaki said, adding that there are
provisions in the spending that would ask corporations & "the highest,
wealthiest individuals to pay a bit more." "This is
something…the vast majority of the American public supports," Psaki
said, adding that it is also "in our interest to help pay for these
vital investments." "But
I would note we take it seriously, we watch it closely, and the Federal
Reserve, who has a purview, has predicted, or put a forecast, that we
expect to go up a bit this year," she continued. "We’ve long anticipated
that, but to come back down to normal levels next and those are the
projections." Psaki went on to say that the $1T infrastructure investment is "vital," calling it "long overdue." "It’s
important to modernize our infrastructure and make sure kids have
access to clean drinking water," Psaki explained. "It’s also designed as
a plan that would be implemented over the course of eight years—It
wouldn't be a huge injection immediately into the economy." She added: "We are confident and comfortable with the strategic approach
of Speaker Pelosi. The president, of course, looks forward to signing
each of these pieces of legislation into law."
White House says it takes inflation 'incredibly seriously' as spending ramps up
While stocks are higher, the advance decline ratio is meager & tech stocks on NAZ are weak. The inflation number were worse than terrible, but short of great. Tomorrow the producer price index, which is more of a forward measure for prices, will be reported & it may show signs of high inflation. Congress still must deal with raising the debt ceiling. But few in DC show any concern because because they think money grows on trees. Gold was higher after the spending bill was passed.
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