Markets extend yesterday's rally as Evergrande jitters fade

Dow jumped 506 (115 below session high), advancers over decliners a modest 2-1 & NAZ gained 155.  The MLP index rose 4+ to 181 & the REIT index was off 1+ to the 463s.  Junk bond funds were off a tad & Treasuries saw heavy selling, raising the yield on the 10 year Treasury up 7 basis points to 1.41%.  Oil went up 73¢ to the 73s & gold dropped a very big 29 to the 1749s (more on both below).

AMJ (Alerian MLP Index tracking fund)

Free Apple Analysis!

Bring Your Portfolio Into The 21st Century

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

Senate Majority Leader Chuck Schumer announced what the top Dems framed as progress on reconciliation & infrastructure negotiations: an agreement on a "framework" on how to pay for the $3.5T reconciliation spending bill.  But Schumer, who joined House Speaker Nancy Pelosi at her weekly press conference, provided almost no details on the alleged framework.  And only minutes after the press conference ended they were met with backlash from top Dem senators who hadn't read the alleged agreement.  "The White House, the House and the Senate have reached an agreement on a framework that will pay for any final negotiated agreement," Schumer said.  Also present was Treasury Secretary Janet Yellen, although she did not speak.  When pressed on the details of the "framework," & whether there is any progress on the rest of Dems' agenda, Pelosi had little to say.  "The House, the Senate and the White House came to an agreement on how we can go forward in a way to pay for this." Pelosi said when asked what exactly what in the framework.  "We have consensus in overwhelmingly – maybe 10-to-1, 20-to-1 in our caucus as to these priorities, a higher percentage in the Senate."  She further described the "framework" as "an array of agreements that we have," while clarifying that "we're finalizing the outlay side."  Pelosi added that the "framework" was "not about price tag, this is about what's in the bill."  Sen Bernie Sanders, the Budget Committee chairman & one of the most important progressives in Congress, took only minutes to note that he was not included in conversations about a deal to pay for Dems' reconciliation bill.  "I have no idea" what's in the deal, Sanders said. He said he hopes to know what is in the "framework" shortly if one indeed does exist.  Sen Mark Warnerm a Dem who's been central to these negotiations, said he didn't have even the "foggiest idea" about the framework when Schumer announced it.  Politico similarly reported that key moderate Sen Kyrsten Sinema was not read in on any agreement.

Schumer announces framework to pay for $3.5T plan, fellow Dems blindsided

Vaccinating against Covid does not increase the risk of miscarriage or birth defects, officials from the Centers for Disease Control & Prevention (CDC) said.  The CDC tracked 1613 pregnant women who received a Covid-19 vaccine, 30% of whom were vaccinated in the 2nd trimester, while the remaining 70% received their inoculations in the third trimester, Dr Christine Olson, a CDC medical officer, told the agency's Advisory Committee on Immunization Practices.  Those participants gave birth to 1634 live-born infants, including 42 twins.  “We reviewed the currently available registry data and found no evidence of an increase in spontaneous abortion rates, and no evidence of any disproportionate negative infant birth outcomes,” Olson added.  Olson cited a CDC study on Covid vaccine-related miscarriages conducted from Dec 14 thru Jul 19.  The report factored into its findings a 12.8% risk of miscarriage by the 20th week of gestation among 2456 participants who received Pfizer (PFE) or Moderna's (MRNA) vaccines while pregnant, which is the normal risk of miscarriage after adjusting for the mom's age.  Just 45 babies in the group were born with birth defects & Olson reported no uncommon types or clusters of birth defects to the panel.  Covid vaccines aren't connected to stillbirths either.

Covid vaccines don’t increase risk of miscarriage or birth defects, CDC says

Gold futures fell, with prices marking their lowest finish in more than 6 weeks, as investors gravitated toward equities & away from assets perceived as havens.  Dec gold fell $29 (1.6%) to settle at $1749 an ounce.  The most-active contract suffered its worst one-day $ & percentage loss since Sep 16 & saw the lowest finish since Aug 10.  The Federal Reserve signaled its intent to “soon” taper its bond purchases & raise interest rates by late next year, which could dim appetite for bullion if investors shift to assets that offer yields.  Specifically, the Fed said “if progress continues broadly as expected, the committee judges that a moderation in the pace of asset purchases may soon be warranted.”

Gold settles at lowest in more than 6 weeks

Oil futures climbed for a 3rd straight session, with global benchmark Brent crude prices scoring their highest finish since Oct 2018.  Oil found support after data yesterday revealed a drop in US crude inventories to their lowest level since 2018, along with strong refinery demand, as offshore crude production continued to see a slow recovery in the Gulf of Mexico in the wake of Hurricane Ida, which made landfall on the Louisiana coast on Aug 29.  West Texas Intermediate crude for Nov, the US benchmark, rose $1.07(1.5%) to settle at $73.30 a barrel.  Nov Brent crude, the global benchmark, added $1.06 (1.4%) to $77.25 a barrel.  Both benchmarks were up a 3rd straight session.  WTI crude saw the highest front-month contract finish since Jul 30, while Brent settled at the highest price since Oct 29, 2018.  Oil jumped 2% yesterday after the Energy Information Administration reported that US crude inventories fell for a 7th straight week.  While US output rose by 500K barrels a day over the week to 10.6M barrels a day, it's still well below the 11.5M barrels a day seen before Hurricane Ida, while data shows refiners continue to recover at a quicker pace than producers after the storm.

Brent crude-oil futures settle at a nearly 3-year high

Gut reactions to the Fed's announcement & the Evergrande story in China brought out buyers, but that excitement can not last.  The senators (see above) do not inspire confidence.  It's hard to believe they know what they are doing or have a clue about how to manage huge sums of money, when it's all based on political emotions.  Bottom line, the US has to raise the debt ceiling, fund $5T in spending for the next year & then figure out how to spend enormous sums of money on pet projects which have the potential to make high inflation worse.  Hope for best!

Dow Jones Industrials