Dow retreated 99, decliners barely ahead of advancers & NAZ was off 32. The MLP index crawled up to 184 & REIT index added 1+ to 183. Junk bond funds hardly budged in price & Treasuries were slightly lower bringing even higher yields. Oil was up pennies in the 78s & gold slid 1 to 1782.
AMJ (Alerian MLP index tracking fund)
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The number of Americans filing for unemployment benefits last week fell to the lowest level in more than ½ a century, the latest sign the labor market is bouncing back from the coronavirus pandemic. Figures the Labor Dept show that unemployment applications for last week tumbled to 199K from a revised 270K in the prior week, easily topping the 260K forecast. It marked the best level of jobless claims since 1969, when there were 197K applicants & has fallen below the 2020 pre-pandemic average of 212K. While it's unclear what precipitated the stunning drop, economists said it could be evidence that employers – faced with an incredibly tight labor market – are curbing layoffs & making an effort to retain the workers they already have as a record number of employees quit their jobs in search of more money & greater flexibility. The Labor Dept reported earlier this month that there were 10.4M open jobs at the end of Sep. Though little changed from the end of Aug, it's still a staggeringly high figure; there are about 3M more open jobs than unemployed Americans looking for work. Still, seasonal adjustments seemed to play some type of role in the better-than-expecting reading: Unadjusted claims totaled 259K – a 7.6% increase from the previous week.
Jobless claims tumble to 199,000, lowest level since 1969
Inflation rose strongly in Oct, accelerating at its fastest pace since the early 1990s, according to a Commerce Dept gauge that is closely followed by Federal Reserve policymakers. Prices for personal consumption expenditures (PCE) excluding food & energy increased 4.1% from a year ago, with the core reading last up that much in 1991. The Fed prefers that measure as it excludes the volatility that the 2 categories can show. The reading matched the estimate. Including food & energy, the PCE index rose 5%, the fastest gain since 1990. Along with the surge in prices came an increase in the amount consumers spent, which rose 1.3% for the month, higher than the 1% estimate. That came with a 0.5% increase in personal income, which was well ahead of the 0.2% estimate. Inflation continued to be reflected most in surging energy costs, which rose 30.2% from a year ago, while food prices increased 4.8% during the span. Services inflation gained 6.3%, the same as in Sep, while goods inflation jumped 7.3%, up from the 6.4% pace in the previous month. Personal savings totaled $1.3T for the month, as the 7.3% rate as a share of disposable personal income declined from 8.2% in Sep, when savings totaled $1.5T. Fed policymakers have been wrestling with inflation that has been more aggressive & persistent than they had anticipated. Officials have said they believe inflation is at the point where they can start gradually reducing the amount of monthly stimulus they are providing through bond purchases, but markets are anticipating that interest rates may have to rise soon as well.
Key inflation figure for the Fed up 4.1%, the highest since January 1991
Treasury yields were little changed as investors digested a slew of economic data. The yield on the benchmark 10-year Treasury note was mostly flat around 1.662% & the benchmark yield peaked above 1.68% earlier in the session. The yield on the 30-year Treasury bond was down nearly 3 basis points, falling just below the 2% level. Yields move inversely to prices & 1 basis point is equal to 0.01%. Yields have jumped sharply this week, as the 10-year Treasury yield was trading near 1.54% on Fri. However, other data points weren’t as solid. Census Bureau said durable goods orders showed an unexpected decline in Oct & core PCE, the Fed's preferred measure of inflation, was up 4.1% year over year in Oct, matching estimates.
Treasury yields rise slightly after mixed economic data
The jobless claims data was encouraging, with that data at or essentially at record lows. Of course, that suggests the pork bill stuck in Congress is not needed to stimulate the economy. As has become common, dreary inflation news keeps coming. Additionally, virus data has not been encouraging especially in countries such as Gernany & Austria. The Dow has fallen & it just dipped into the red for Nov.
Dow Jones Industrials
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