Dow finished up 102 (well above early lows), decliners over advancers 3-2 & NAZ rose 68. The MLP index was slid back 4 to the 184s & the REIT index went up 5 to the 451. Junk bond funds crawled higher & Treasuries was flattish. Oil remained down 1+ to the 77s & gold added 3 to 1764 (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)
Senate Minority Leader Mitch McConnell offered a short-term suspension of the US debt ceiling to avert a national default & economic crisis until Dems are able to pass a more permanent solution before the end of the year. “To protect the American people from a near-term Democrat-created crisis, we will also allow Democrats to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels into December,” he said in a statement. “This will moot Democrats’ excuses about the time crunch they created and give the unified Democratic government more than enough time to pass standalone debt limit legislation through reconciliation,” he added. The development comes as Pres Biden & Dem leaders in Congress amped up pressure on Reps to act on the debt limit. The stopgap offer from McConnell would take some pressure off both parties to reach a compromise by Oct 18, when the Treasury Dept estimates the US will otherwise exhaust its emergency efforts to pay gov bills. Reps & Dems have clashed in recent weeks over how best to raise or suspend the federal borrowing limit & it was not immediately clear if House Speaker Nancy Pelosi or Senate Majority Leader Chuck Schumer would be open to this potential plan. McConnell & Schumer are set to meet later which could lead to greater clarity on a possible agreement.
Senate GOP leader McConnell may offer short-term debt ceiling extension following Biden pressure
Dr Scott Gottlieb said he expects the coronavirus’ “pandemic phase” to be over in the US once vaccines become available for children & Merck's (MRK) antiviral pill is cleared by regulators. The other crucial development is for the highly transmissible Covid delta variant to have “moved through the country,” which is likely conclude around Thanksgiving, Gottlieb said. “On the back end of that, we’re going to have, hopefully, a vaccine available for children and, at some point before the end of the year, we probably will have the orally available drug from Merck if things go well and that undergoes a favorable review,” added Gottlieb. “I think those two things are going to be the bookend on the pandemic phase of this virus and we’re going to be entering the more endemic phase, when this becomes an omnipresent risk but don’t represent the extreme risk that it represents right now,” he continued.
Dr. Gottlieb sees ‘pandemic phase’ ending when antiviral pills, kids’ vaccines out
Gas prices have steadily climbed higher this year & Americans are now paying the most at the pump in 7 years. The national average price for a gallon of gas stood at $3.22, the highest since at least 2014. In some places, consumers are paying much more. In California, the average price is more than a $ higher at $4.42. In the state's Mono County, prices have topped $5. Rising gas prices comes on the heels of an oil rebound. West Texas Intermediate (WTI) crude futures, the US oil benchmark, traded around $77.60 per barrel today, after topping $79 in the prior session for the first time since 2014. One year ago, a barrel of WTI fetched about $40. Demand for petroleum products plummeted in 2020 as the pandemic shut economies worldwide, prompting producers to turn off the taps. Though demand has recovered as people hit the road & business activity picks up, supply has remained constrained. Producers have been slow to return barrels to the market, & Hurricane Ida exacerbated the supply & demand imbalance when it knocked production in the Gulf of Mexico offline. In the face of rising oil prices, some thought the coalition of oil-producing nations known as OPEC+ would opt to increase output. Instead, the group decided Mon to stick to a previously agreed upon schedule to return 400K barrels per day to the market in Nov. Higher oil prices translates to higher gas prices for consumers, & Americans are paying more than $1 per gallon more than this time last year.
Americans are paying the most for gas in seven years
Gold futures ended higher as Treasury yields slipped, despite a better-than-expected climb in US private-sector employment, providing modest support for the precious metal despite strength in the $. In the few minutes after US private-sector employment data from the ADP National Economic Report showed a better-than-expected rise of 568K in Sep, gold prices fell further, then pared some of those declines. The ADP data came in above forecasts for a gain of 425K jobs. Dec gold rose 90¢ (0.05%) to settle at $1761 an ounce, after trading as low as $1745. The downbeat trade in precious metals came as yields on the 10-year Treasury note hit a high in overnight Asia trade at 1.57%, but fell to as low as 1.507%. The 30-year Treasury bond rate was at 2.081%, down from $2.097% a day ago. The $, meanwhile, climbed 0.3%, as gauged by the ICE U.S. Dollar Index.
Gold prices end higher as bond yields slip after ADP private-sector jobs data
Natural-gas futures fell by just over 10% after Russian Pres Vladimir Putin said his country would boost supplies of the fuel to Europe. The news pulled prices down just one day after they settled at their highest since 2008. Meanwhile, oil futures also declined as data from the Energy Information Administration revealed a 2nd straight weekly rise in US crude inventories. Nov natural gas fell 64¢ (10.1%) to settle at $5.675 per M British thermal units. It settled yesterday at $6.312, the highest front-month contract finish since 2008. Nov West Texas Intermediate crude lost $1.50 (1.9%) to settle at $77.43 a barrel a day after posting the highest close since late 2014.
Natural-gas futures drop 10%; U.S. oil prices post first loss in 5 sessions
Buyers returned after selling in the first hour. However enthusiasm faded in the last hour & then perked up going into the close. The offer for a temp fix on raising the debt ceiling sounds good, but it hasn't been agreed to. It's hard to get to excised with only a proposal to delay the problem for a few months. That would not really be a fix. In addition rising energy prices for oil & gas will further pinch the economic recover, although virus data has improved in recent weeks. Trading will begin tomorrow with the unemployment claims report which should be around recent levels near 350K. The Dow continues above its recent trend-line at 34K.
Dow Jones Industrials
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