Dow slid back chump change, advancers over decliners better then 3-2 & NAZ gained 105. The MLP index was was up 1 to the 194s & the REIT index went up 2+ to the 457s. Junk bond funds were off a tad & Treasuries saw higher prices. Oil was off pennies but still above 80 & gold jumped 34 to 1793 (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)
Federal Reserve officials could begin reducing the extraordinary help they've been providing to the economy by as soon as mid-Nov, according to minutes from the central bank’s Sep meeting. The meeting summary indicated that members feel the Fed has come close to reaching its economic goals & soon could begin normalizing policy by reducing the pace of its monthly asset purchases. In a process known as tapering, the Fed would reduce the $120B a month in bond buys slowly. The minutes indicated the Fed probably would start by cutting $10B a month in Treasuries & $5B a month in mortgage-backed securities. The target date to end the purchases should there be no disruptions would be mid-2022. The minutes noted that “participants generally assessed that, provided that the economic recovery remained broadly on track, a gradual tapering process that concluded around the middle of next year would likely be appropriate.” “Participants noted that if a decision to begin tapering purchases occurred at the next meeting, the process of tapering could commence with the monthly purchase calendars beginning in either mid-November or mid-December,” the summary added. At the policymaking session, the committee voted unanimously to hold the central bank's benchmark short-term borrowing rate at 0-0.25%. That went along with the decision to hold the monthly asset purchases at a minimum $120B. The committee also released the summary of its economic expectations, including projections for GDP growth, inflation & unemployment. Members scaled back their GDP projections for this year but upped their outlook for inflation & indicated they expect unemployment to be lower than earlier estimates. In the “dot plot” of individual members’ expectations for interest rates, the committee indicated it could begin raising interest rates as soon as 2022. Markets currently are pricing in the first rate hike for next Sep, according to the CME FedWatch tool.
Fed says it could begin ‘gradual tapering process’ by mid-November
Progressive Caucus Chair Rep Pramila Jayapal is fundraising by criticizing House Speaker Nancy Pelosi for comment that Dems will have to
cut the price of their reconciliation bill by including fewer programs
in it. Jayapal's campaign sent the email, yesterday & it cited the Mon letter from Pelosi & comments she made in a yesterday press to warn supporters that the speaker might be willing to cave
on major progressive priorities to pass Dems' reconciliation bill. "Did you see what Nancy Pelosi said late last night?" the email subject line reads. "Democrats
should NOT leave child care, paid leave, universal pre-K, community
college, affordable housing, Medicare expansion, climate action, and a
roadmap to citizenship for Dreamers behind," the Jayapal
campaign email continues. "So why is Speaker Pelosi suggesting we should
allow a couple of conservative Democrats to leave behind popular
cornerstone policies of the $3.5 trillion Build Back Better Act? We need
to deliver." In the Mon letter, Pelosi said "difficult decisions"
will have to be made on what to include in the reconciliation bill. Overwhelmingly, the guidance I am receiving from Members is to do fewer
things well so that we can still have a transformative impact," she
said. Pelosi both expanded on that comment yesterday & appeared to partially walk it back. She said she is "very
disappointed" that the bill won't be at the original $3.5T
price but that a scaled-down package can still be a major win for
Dems. But pushed on what programs exactly would be on the
chopping block, Pelosi did not get into specifics & said it is simply a
"discussion." Questioned further on what the first programs to get the
ax might be, the speaker said she did not know before saying, "The
timing would be reduced in many cases to make the costs lower."
Jayapal hits Pelosi over comments on shrinking bill in fundraising email
JPMorgan Chase's (JPM), a Dow stock, Q3 profit rose 24%. The bank posted profit of $11.7B, or EPS of $3.74 (up
from $2.92 a year ago). That beat the $3 that had expected. The bank
freed up $2.1B it had set aside for soured consumer &
corp loans during the worst days of the coronavirus crisis. Excluding the boost from the release & a tax benefit, the bank's
profit was $9.6B. Revenue rose 1% to $29.65B, falling just short of the $29.79B forecast. JPM entered the qyr with high expectations. In Jul, the bank
said it expected people to ramp up spending throughout the summer as the
coronavirus pandemic receded. More recently, soaring oil prices &
global supply-chain disruptions have sent the markets oscillating. The
highly contagious Delta variant has delayed office reopenings. Revenue in the consumer bank fell 3% from a year ago. JPM stock fell 3.93.
If you would like to learn more about JPM, click on this link:
club.ino.com/trend/analysis/stock/JPM?a_aid=CD3289&a_bid=6ae5b6f7
JPMorgan earnings: Third-quarter profit rises
Gold futures gained 2%, prompting prices to post their highest finish in about a month as the $ & bond yields weakened following a report on inflation in Sep. Prices for the precious metal then moved slightly lower in electronic trading, shortly after the release of minutes from the Federal Reserve's Sep monetary policy meeting. The Sep US consumer-price index reading rose 0.4%, versus expectations for 0.3% on the month. Excluding the volatile food & energy components, the CPI climbed 0.2% after edging up 0.1% in Aug, the smallest gain in 6 months. In the 12 months thru Sep, the CPI increased 5.4% after advancing 5.3% year-over-year in Aug & annualized core CPI rose 4.0% after increasing 4.0% in Aug. Dec gold rose $35 (2%) to settle at $1794 an ounce, following a 0.2% gain yesterday. Prices for the most-active contract marked their highest settlement since Sep 15. The Fed's #2 Richard Clarida had already signaled earlier this week that the economic recovery from COVID-19 had essentially met the criteria necessary to announce a reduction of monthly asset-purchases of Treasuries & mortgage-backed securities that have been in force since Jun of 2020.
Gold futures end at one-month high as dollar, bond yields fall after inflation report
Oil futures fell, with the US benchmark slipping below a nearly 7-year high to post a loss for the first time in 5 sessions, pressured by concerns over the outlook for global economic growth, as well as oil demand from China. Oil prices moved lower after Chinese customs data showed crude oil imports slumping 5% month-on-month in Sep, marking a 15% decline year-on-year. West Texas Intermediate (WTI) crude for Nov fell 20¢ to settle at $80.44 a barrel after tapping a low of $79.42. WTI finished yesterday at its highest since 2014, up a 4th straight session. Dec Brent crude the global benchmark, declined by 24¢ to $83.18 a barrel. Brent lost ground yesterday, with analysts attributing weakness, in part, to the IMF's cut to its global growth outlook. In a monthly report today, OPEC left its forecast for 2022 growth in oil demand unchanged from its Sep projection at 4.2M barrels a day, with global demand expected to average 100.8M barrels a day.
U.S. oil prices post first loss in 5 sessions, but hold above the key $80 mark
Dow Jones Industrials
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