Dow tumble 500, decliners over advancers better than 5-1 & NAZ decline 217. The MLP index was off 3+ to 173 & the REIT index fell 3+ to the 475s. Junk bond funds slid lower & Treasuries are in heavy demand. Oil dropped 3 to 67 & gold pulled back 5 to 1779.
AMJ (Alerian MLP index tracking fund)
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Federal Reserve Chair Jerome Powell is set to tell Congress that the omicron variant could threaten the U.S. labor market and cloud the inflation forecast. "The recent rise in COVID-19 cases and the emergence of the [omicron] variant pose downside risks to employment and economic activity and increased uncertainty for inflation," Powell wrote in prepared remarks that he will deliver before the Senate Banking Committee. "Greater
concerns about the virus could reduce people's willingness to work in
person, which would slow progress in the labor market and intensify
supply-chain disruptions." Stocks suffered the worst drop of the year on Fri after the World Health Organization named omicron a "variant of concern." Markets
rebounded yesterday, as the Dow rose 0.7%. Inflation
concerns have roiled investors & consumers in recent months as prices
for Americans shot up 6.2% in Oct compared to the same month in
2020, the highest 12-month jump since 1990, according to the Labor Dept. Powell said that while the Fed expects inflation to slow down over
the next year, the US could continue seeing high inflation in 2022. "It
is difficult to predict the persistence and effects of supply
constraints, but it now appears that factors pushing inflation upward
will linger well into next year," Powell wrote. The
Fed announced earlier this month that it will start tapering its $120B in monthly bond purchases by $15B a month, which would
reduce some of those inflation pressures.
Powell to tell Senate virus may threaten job market, cloud inflation forecast
Consumers logged online yesterday & spent $10.7B, marking a 1.4% decrease from year-ago levels, according to data from Adobe Analytics. This year's tally marks the first time that Adobe has tracked a slowdown in spending on major shopping days. Adobe first began reporting on e-commerce in 2012, & it analyzes more than 1T visits to retailer websites. Despite the slowdown, Adobe expects the entire holiday season will see record-breaking e-commerce activity, as shoppers spread out their $s over more days. So far, from Nov 1 thru Cyber Monday, consumers in the US have spent $110B online, which is up 11.9% year over year. And on 22 of those days, consumers purchased more than $3B worth of goods, another new milestone. Adobe anticipates digital sales from Nov 1 - Dec 31 will hit $207B, which would represent record gains of 10%. Last Cyber Monday, retailers rang up $10.8B in sales on the web, as more people stayed home & avoided shopping in stores due to the ongoing coronavirus pandemic, marking a record day for e-commerce purchases in the US. The slight deceleration in online spending follows a similar pattern that played out on Thanksgiving day & on Black Friday this year, as shoppers appeared to have spread out their dollars onto more days rather than squeezing their shopping into “Cyber Week.” Some of that behavior has been encouraged by retailers, including e-commerce behemoth Amazon (AMZN), that have been touting Black Friday style deals since Oct. Retailers rang up $8.9B in sales online on Black Friday, down from the record of about $9B spent on the Friday after Thanksgiving a year earlier. On Thanksgiving day, consumers spent $5.1B on the internet, flat from year-ago levels. Stores were also a little less crowded on key shopping days this year versus pre-pandemic times, as retailers gave consumers less of a reason to line up outside the mall in the wee hours of the morning. Shopper traffic on Black Friday was up 47.5% compared with year-ago levels, but was still down 28.3% versus 2019, according to separate data from Sensormatic Solutions.
Cyber Monday online sales drop 1.4% from last year to $10.7 billion
China's manufacturing activity rebounded in Nov as orders improved and power shortages eased, a survey showed. An industry group & the national statistics agency said a monthly purchasing managers' index rose to 50.1 from October’s 49.2 on a 100-point scale. The index spent the previous 2 months below 50, which shows activity decreasing. A measure of production rose 3.6 points to 52, indicating activity was recovering from power rationing imposed in major manufacturing areas in Sep to meet official energy efficiency targets. The recovery faces uncertainty due to the spread of the coronavirus's omicron variant. Manufacturers also face supply shortages but that was offset at least partly by falling prices for materials. A measure of new export orders rose 1.9 points to 48.5 while new orders overall improved by 0.6 points to 49.4, according to the federation & the National Bureau of Statistics.
China manufacturing improves as power shortages ease
Powell spoke & investors were not happy with what they heard. Basically the inflation prognosis is not good. Adding to that uncertainty, there its a lot worry about the virus causing more economic damage with the new variant. Even safe haven gold has been hit with selling. New headwinds make it difficult for bulls to make their case for stocks.
Dow Jones Industrials
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