Dow shot up 337 (off session highs), advancers over decliners 5-2 & NAZ climbed 152. The MLP index went up 2+ to the 186s & the REIT index was fractionally higher to the 451s. Junk bond funds remained in favor & Treasuries continued to be sold. Oil climbed 1+ to the 78s & gold was off 6 to 1755 (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)
The Biden administration may be starting to panic as calls for $100-per-barrel crude oil & record-breaking heating bills are becoming louder & harsh reality. Faced with oil prices near 7-year highs & natural gas prices at the highest prices since 2008, they are now becoming desperate to do something about it. Energy Secretary Jennifer Granholm floated using the US Strategic Petroleum Reserve, but today the administration backed off. "As always we monitor the market and that means considering all tools in the tool box to protect the American people. DOE will work with our agency partners to determine if and when actions are needed, but there are no plans at this time," a Dept of Energy spokesperson said while noting her comments were referencing congressionally mandated planned releases. Yet a release from the US reserve would only be a short-term fix & would only serve to discourage more US oil & gas production. The oil & gas market has a structural shortage & needs more investment & more production by US producers. A release from the reserve would only artificially lower prices & encourage more demand & further tighten supply down the road. Granholm even went as far as saying that she would rule out a ban on crude oil exports, which was lifted in 2015 when Obama was pres. "That’s a tool that we have not used, but it is a tool as well," she added. Still, the Biden administration should know that it owns this energy price spike. The track record of killing the Keystone Pipeline, the drilling moratorium on Federal Lands & the rejoining of the Paris Climate Accords while discouraging investment in the US oil & gas industry has already helped to add to what has become a global energy crisis. In recent years it has been the US oil & gas producer that has kept global oil & gas prices low while feeding global economic growth. At the same time, the green energy transition, the movement toward the Green New Deal are putting the global economy at risk . Europe put the cart before the horse. In its quest to become more carbon-neutral, it made bad policy decisions that left it short of energy supply & is putting the economies & the global economy at risk. It chose to close power plants & shut down oil & gas production that left it short of supply. Europe also closed nuclear power plants in Germany & became more reliant on Russia for natural gas supply.
$100 oil talk pushes Department of Energy into panic mode
Senate Majority Leader Chuck Schumer said the Senate has an agreement to raise the debt ceiling & is moving toward a likely procedural vote Sat. The deal, however, will only postpone a larger fight over the debt
limit until just before Christmas rather than fix the underlying
impasse. The bill which would
increase the debt limit by $480B, just enough money to
tide the gov over until Dec 3, which means the Treasury
Dept will not be able to replenish the coffers it exhausted since
Jul 31 when the previous debt ceiling suspension expired. Therefore,
it will not have the ability to use "extraordinary measures" to keep
the gov from defaulting for more than a few days & Congress
will be forced to tackle the debt ceiling issue again before Christmas. That's a problem, however, because Reps are still adamant that
Dems will have to pass a long-term debt ceiling increase via
budget reconciliation & Dems are adamant that they will do no
such thing. "The Senate is moving toward the plan I laid out
yesterday to spare the American people a manufactured crisis," Senate
Minority Leader Mitch McConnell said on the Senate floor. "For
two and a half months the Democratic leaders did nothing and then
complained that they were actually short on time," he said regarding
Dems' refusal to use reconciliation to increase the debt limit. "Now they have no question there will be plenty of time." Senate Majority Whip Dick Durbin, however, said Dems are
ruling out using reconciliation for a future debt limit increase. "If
you project what doing that every year, or whenever it comes due, it is
madness. It is a long-term procedural mess. And it was never designed
for the debt ceiling. and I hope that Senator McConnell will come to his
senses," Durbin continued. "We could be, it's up to Senator
McConnell," Durbin said when asked whether Congress will be stuck in
another debt ceiling game of chicken in just a few months. Except
that game of chicken will happen as Americans are putting up their
Christmas & Hanukkah decorations, & hoping for good holiday bonuses. Dec is also when gov funding runs out after a continuing
resolution that Congress passed last month. And Dems will likely be
under the gun to pass their massive reconciliation social spending bill & the infrastructure bill if they've not done so already.
Democrats to limit Biden's plan giving IRS more info on bank accounts
Centers for Disease Control & Prevention (CDC) influenza experts are concerned that the US could be at risk for a severe flu season this year, Director Dr Rochelle Walensky warned. That's because the US population may now have reduced immunity against influenza after seasonal flu cases reached an all-time low last year when large parts of the nation were shut down, Walensky continued. During the 2020-2021 flu season, there were very few flu cases, “largely because of masking and physical distancing and other prevention measures put in place for the Covid-19 pandemic,” she said. There were around 2K flu cases last influenza season, according to data reported to the CDC. By comparison, the 2019-2020 flu season saw an estimated 35M cases. Walensky urged Americans to get shots for both Covid & the flu, saying vaccinations are not just important for ending the pandemic but also preventing other infectious diseases. An increase in flu infections this winter could put an additional burden on the nation's health-care system, increasing stress on health care workers who are already fighting a high number of hospitalizations due to Covid. About 69K Americans are currently in inpatient beds with Covid, according to the Department of Health & Human Services. “We continue to see many hospitals and intensive care units across the country at full capacity,” Walensky added. “Each year in the United States, influenza can claim between 12,000 and 52,000 lives and result in 140,000 to 710,000 hospitalizations.” She said it is safe & effective to get vaccines for Covid & the flu at the same time.
CDC director warns the U.S. is at risk of a severe flu season this yearGold futures ended lower, with prices pressured as Treasury yields edged up following weekly US data that revealed a fall in jobless benefit claims, as investors awaited to morrow's Sep employment data from the Labor Dept. Prices for the precious metal slipped after data showed new US' weekly jobless claims fell by 38K last week. The forecast estimated a fall to a seasonally adjusted 345K. The better-than-expected economic data came ahead of tomorrow's nonfarm-payrolls report, which will inform the Federal Reserve's decision to taper its bond buying. Dec gold fell $2 to settle at $1759 an ounce, following a flattish day yesterday. A weaker $ can make assets priced in the currency more attractive to overseas buyers & steadying yields lower the opportunity costs of owning gold, which doesn't offer a coupon, versus yield-bearing debt. For the week, gold is little changed for the week. The ICE Dollar index, meanwhile, is up 0.1%.
Gold futures end lower as U.S. weekly jobless claims decline
Oil prices recouped some of their recent losses from a larger-than-expected rise in US crude inventories, after the Energy Dept reportedly said it has no plans to release crude from its Strategic Petroleum Reserve (SPR). Energy Secretary Jennifer Granholm raised the possibility of a release of oil from the gov's SPR to help calm the surge in gasoline prices. She said that she is not ruling out a ban on crude-oil exports. However, a report said that the Energy Dept has no plans to tap the SPR. West Texas Intermediate crude for Nov climbed by 87¢ (1.1%) to settle at $78.30 a barrel. The US benchmark fell 1.9% yesterday, retreating from Tues's close at a nearly 7-year high. WTI remains 1.3% higher for the week. Dec Brent crude the global benchmark, added 87¢ (1.1%) to $81.95 a barrel after yesterday's 1.8% decline.
Oil futures settle higher on SPR talk; natural-gas prices end almost flat
Dow Jones Industrials
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