Dow fell 89, decliners over advancers about 2-1 & NAZ went up 12. The MLP index was off 2+ to the 171s & the REIT index fell 2+ to the 463s. Junk bond funds were mixed & Treasuries ran into a little selling (more below). Oil dropped 2+ to the 65s on rising global Covid cases & gold tumbled 27 to 1735.
AMJ (Alerian MLP index tracking fund)
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The Senate voted on yesterday to end the debate on the $1T bipartisan infrastructure bill after 18 Reps voted in favor to break the filibuster which puts the bill on a glide path to passage within the next few days. It was reported that if all the available time is used under the rule, "the final passage may not come until very early Tuesday morning at the latest. But an agreement among all 100 senators could expedite the process and trigger a final vote much sooner." Sen. Bill Hagerty refused to relent on the mandatory debate time. Majority Leader Chuck Schumer, stressed to colleagues that they could proceed the "easy way or the hard way," as the Senate slogged thru its 2nd consecutive weekend session. "We’ll keep proceeding until we get this bill done," Schumer said.
Infrastructure bill passage imminent as Senate Republicans break filibuster
US shoppers are growing more anxious about visiting stores & trying on clothing in dressing rooms, according to a recent survey. Some of those polled by First Insight also say they are beginning to cut back on spending due to the resurgence in Covid cases. Both trends threaten to slow momentum for what many were predicting to be an incredibly strong back-to-school shopping season. Deloitte has estimated that back-to-school spending for kids in grades K-12 would reach $32.5B this year, up 16% from 2020 & 17% from 2019. That averages out to about $612 per student. The consulting firm's estimates were based on a poll of 1200 parents completed from May 27 to Jun 5. A lot has changed since then. Although parents may have extra cash after rounds of government stimulus checks & child-tax credit payments, the recent surge in Covid cases fueled by the delta variant could upset these predictions. Couple that with tight inventories, caused by shipping disruptions & conservative planning on the part of retailers & things may not be as rosy as they looked when students began their summer breaks. No doubt, there are worries back-to-school plans could change at the last minute. After all, the Centers for Disease Control & Prevention recently reversed its policy on masking, calling for vaccinated individuals to once again wear masks indoors to prevent Covid's spread. The new guidance has prompted consumers to rethink decisions about dining out, traveling & making other purchases. 56% of consumers say they're proactively cutting back their spending at retail establishments, First Insight found in a survey of 1038 people it fielded on Thurs. That's up from 52% a month earlier, when the predictive consumer analytics firm asked consumers the same questions about their shopping behaviors tied to the pandemic. First Insight's poll also found that 64% said they are generally anxious about the pandemic, up from 51% in Jul. 56% reported feeling nervous about interacting with sales associates in stores, a sharp increase from 43% in Jul.
Delta variant, supply-chain chaos threaten to derail strong back-to-school shopping season
Treasury yields ticked lower, with investors, despite strong job openings data & ahead of inflation readings due to be released this week.10-year Treasury note was unchanged at 1.28%. The yield on the 30-year Treasury bond rose less than a basis point, to 1.936%. Yields move inversely to prices. Job openings jumped higher for the month of Jun, reaching 10.1M, the Labor Dept reported. The forecast called for 9.1M. Treasury yields jumped on Fri following a better-than-expected nonfarm payroll report from the Labor Dept. The report showed 943K jobs were added in Jul, well above the 845K forecast. Meanwhile, the unemployment rate fell to 5.4%, below an expected rate of 5.7%. Employment data is one of the key economic indicators being used by the Federal Reserve to determine when it will start tightening monetary policy, along with inflation readings. The consumer price index & the producer price index, both of which measure inflation, are scheduled to come out Wed & Thurs, respectively.
Treasury yields rise with jobs openings, inflation data in focus
The infrastructure bill, which looks to be about ½ pork, may be headed to the House on Wed. Behind it is a whopper size bill & that is all pork. Meanwhile Covid keeps up its fight making the outlook for the very important school shopping season very uncertain. Investors are nervous although the popular stock averages are pretty much at record levels.Dow Jones Industrials
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