Dow jumped 426, advancers over decliners about 3-1 & NAZ soared 208. The MLP index went up 3+ to the 191s (along with high energy prices) & the REIT index fell 3+ to the 446s. Junk bond funds crawled higher & Treasuries had more selling pressure. Oil went up 1+ to the 79s & gold dropped 15 to 1752.
AMJ (Alerian MLP index tracking fund)
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Treasury Secretary Janet Yellen refused to explicitly oppose raising the debt
ceiling thru budget reconciliation, partially contradicting Senate Majority Leader Chuck Schumer's stance as she warned of a recession if the US defaults. Congress
has until Oct 18 to raise the debt ceiling. That is when Yellen says
the Treasury Dept's "extraordinary measures" to pay the
gov's bills despite the expiration of a debt ceiling suspension
in Jul will run out. The treasury secretary added that failure to do so would be disastrous. "It
would be catastrophic to not pay the government's bills for us to be in
a position where we lack the resources to pay the government's bills,"
Yellen continued. "It's really up to Speaker Pelosi and Leader Schumer to figure out
how to get this done in Congress," Yellen said. "What I
can tell you is that it's utterly essential that this be done." Asked
further if Yellen would support raising the debt ceiling via
reconciliation – the way Reps have been insisting for months that
Dems should do it – Yellen refused to take it off the table. "I support getting it done," Yellen said before emphasizing that "this has long been done on a bipartisan basis." "I
believe that both parties have a responsibility to get this done," she
added. "And it's really up to the Congress to decide how to
manage it. But I believe it must be done." Budget reconciliation
is a process by which Congress can bypass the Senate filibuster on
fiscal bills. Dems used it to circumvent Reps & pass their
COVID-19 relief bill earlier this year. They're using it again for
their massive social spending bill.
Yellen warns of recession if US defaults, says Congress must help raise ceiling
Natural gas contracts hit new highs in Europe, as soaring prices continue to put pressure on the region's energy sector ahead of the winter period. Nov contracts at the Dutch TTF hub — a European benchmark for natural gas — were trading at around 118 €s per megawatt hour (MWH). The front-month contract was up almost 19% on the day, setting a new record high & has risen almost 400% since the start of the year. In the UK — which has been hit particularly hard by the surging cost of wholesale natural gas — prices for Nov rose 14% to £2.79 per therm. Meanwhile, British wholesale gas for immediate delivery rose by 23% to £2.50 per therm. Soaring wholesale prices have partially been caused by a surge in demand, particularly from Asia, as economies emerge from Covid-19 induced lockdowns. A cold European winter & spring also meant supplies had already been heavily depleted by the summer. Meanwhile, falling domestic production, adverse US weather conditions & essential maintenance works have created a tight gas market & made restocking gas supplies ahead of the coming winter difficult across the region. Several British energy suppliers have collapsed amid the gas price crisis. Sep alone saw 9 companies cease trading. In a normal year, 5-8 companies exit the UK market, according to UK Business Minister Kwasi Kwarteng.
Gas price surges to a record high in Europe on supply concerns
General Motor's (GM) CEO Mary Barra & other executives will detail plans to
significantly expand & diversify the company's revenue & earnings
during a highly anticipated investor event this week in Detroit. Future
growth is a main focus of the event where execs will disclose
specific targets regarding revenue, profit margins & the outlook on
total market size for early expansion businesses, like self-driving
taxis. Revenue last year was nearly $122.5B, down 10.8% compared with 2019 thanks largely to factory shutdowns at the beginning of the coronavirus pandemic. It still made $6.4B in net income for the year while its
adjusted operating profit was $9.7B, $4.90 a share, in 2020. The stock added 51¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM to detail significant revenue expansion plans during highly anticipated investor day
There is no special reason that brought out buyers today. Maybe Janet's words got them excited. The economy is doing well although gains going forward will not be rapid. And the mess with dysfunctional congress shows no signs of getting better. More attention is being paid to higher energy prices, especially because they appear to be going higher. Below Dow continues to trend sideways, in the lower part of its recent range.
Dow Jones Industrials
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