Dow fell 9, advancers over decliners 5-4 & NAZ recovered 70. The MLP index went up 2 to the 185s & REIT index shot up 6 to the 487s. Junk bond funds were mixed & Treasuries rose in late day trading. Oil was pennies lower in the 78s & gold was little changed 1784 (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 at their meeting earlier this month expressed concern about inflation & said they would be willing to raise interest rate if prices keep rising. The committee that sets interest rates for the Fed released the minutes from the Nov session where it first signaled that it could be dialing back all the economic help it's been providing during the pandemic. The meeting summary indicates a lively discussion about inflation, with members stressing the willingness to act if conditions continue to heat up. “Various participants noted that the Committee should be prepared to adjust the pace of asset purchases and raise the target range for the federal funds rate sooner than participants currently anticipated if inflation continued to run higher than levels consistent with the Committee’s objectives,” the minutes stated. Officials stressed a “patient” approach regarding incoming data, which has shown inflation running at its highest pace in more than 30, the years. But they also said they would “not hesitate to take appropriate actions to address inflation pressures that posed risks to its longer-run price stability and employment objectives.” Following the 2-day session that concluded Nov 3, the FOMC indicated it will begin cutting back on the monthly bond-buying program that had seen it purchasing at least $120B in Treasuries & mortgage-backed securities (MBS). The goal of the program was to keep money flowing in those markets while maintaining broader interest rates at low levels to boost economic activity. In its post-meeting statement, the FOMC said “substantial further progress” in the economy would allow a $15B a month reduction in purchases -- $10B in Treasuries & $5B in MBS. The statement said that pace would be maintained thru at least Dec & probably continue going forward until the program wound down – likely by late spring or early summer 2022. The minutes noted that some FOMC members wanted an even faster pace to give the Fed leeway to raise rates sooner. “Some participants suggested that reducing the pace of net asset purchases by more than $15 billion each month could be warranted so that the Committee would be in a better position to make adjustments to the target range for the federal funds rate, particularly in light of inflation pressures,” the minutes added.
Fed meeting minutes show members ready to raise interest rates if inflation continues to run high
After lying dormant for years, inflation is once again chipping away at American wallets, and it has become a chief concern for the White House. In recent months, the Biden administration ramped up its efforts to remedy the supply-chain interruptions blamed for hot inflation. And Pres Biden has been pushing his economic agenda as a remedy for inflation worries. But ask investors, economists & the American people for their thoughts on inflation, & no one sees inflation cooling off anytime soon. That means everyone from the president to the everyday voter will likely need patience to get through this. Rising food & gas prices are weighing on Americans living on fixed or modest incomes. Retail grocery prices rose 1% in Oct, laundry & dry-cleaning costs are up 6.9% from a year ago, & in some parts of California gasoline is being sold north of $6 a gallon. In turn, the inflation messaging coming out of the White House has focused a great deal on 2 big, Biden-backed bills. One of the pres's favorite counters to inflation worries is to point out that many economists say his $1.75T Build Back Better bill & a separate $1T infrastructure plan will make businesses & workers more productive & ease inflation pressures over the long term. Yet while better roads, access to child care & weatherization may help reduce costs years in the future, Dems face critical midterm elections in less than 12 months. Political strategists viewed that election as a gauge of voter attitude toward the current direction of policy with Dems in control of the White House & Congress. The high-profile Dem defeat in an increasingly blue Virginia is thought to have sparked compromise between party centrists & progressives on the infrastructure & anti-poverty & climate bills. Americans' angst about the economy, as measured by the percentage of those surveyed who mention any economic issue as the top problem facing the US, reached a pandemic-era high according to polling firm Gallup. (The survey polled a random sampling of 815 adults & it had a margin of error of plus or minus 4 percentage points). 26% of Americans now cite an economic concern as the nation's top problem, while 7% say inflation, specifically, is their chief anxiety. In Sep, just 1% of Americans named inflation as their top worry, Gallup said. It has been more than 20 years since inflation was named as the most important problem by at least 7% of Americans. “Moms and dads are worried, asking, ‘Will there be enough food we can afford to buy for the holidays? Will we be able to get Christmas presents to the kids on time?’” Biden said yesterday.
Inflation is sticking around – and Biden will likely have to wait it out like the rest of us
Europe is slipping behind in its vaccination drive & could see hundreds of thousands more deaths by next spring, the World Health Organization (WHO) said. “We’ve only got 54% of the one billion people living in Europe fully vaccinated,” Robb Butler, exec director for WHO Europe, added. This region for the UN health agency comprises of 53 countries that actually spans Europe & Central Asia & has approximately 900K citizens at its last count. “There are [around] 45% who are unvaccinated or not fully vaccinated, that’s a bigger issue for our policy and decision-makers right now — driving up vaccination rates,” he said. Butler's comments come as Europe struggles with the latest wave of Covid infections, prompting further restrictive measures & pushing hospitalizations higher. Most, if not all, of the people who have been admitted to hospital intensive care wards with Covid are unvaccinated, health officials from across the region have reported. Covid vaccines can not stop transmission of the virus entirely but they greatly reduce the risk of severe infection, hospitalization & death. WHO Europe's large proportion of unvaccinated people puts it at risk of excess deaths in the months to come, the WHO warned yesterday, issuing a statement in which is said that the Covid death toll in Europe & Central Asia could rise by 700K to reach more than 2.2M by next Mar. The Europe region has already recorded 1.5M Covid deaths, with the virus now becoming the leading cause of death in both Europe & Central Asia. The region is currently experiencing nearly 4200 deaths per day, twice the daily deaths recorded at the end of Sep. WHO has repeatedly stated that Europe is at the epicenter of the latest global wave of Covid infections. Vaccination rates, both of the initial Covid vaccination programs & booster shots, differ widely from country to country.
Only 54% of Europe is fully vaccinated, WHO official says
Gold prices ended slightly higher, snapping a 4-session decline, despite a rise in $ & a batch of mostly upbeat US economic reports. Dec gold picked less than 1 to settle at $1784 an ounce, after slumping $22 (1.2%) yesterday. That bruising session marked the lowest finish for a most-active contract since Nov 3 & followed a 2.4% drop on Mon, the sharpest percentage fall since Aug 6. US markets will be closed tomorrow. Earlier this week, gold dropped thru the psychologically important level of $1800 gain as Treasury yields climbed in a holiday-shortened week. Treasuries saw the yield climb abate somewhat yesterday, at least at among longer-dated durations. However, the rise in the $ was creating a headwind for $-pegged assets. The ICE Dollar Index was up 0.4% & headed for a weekly gain of 0.9% to take the index to around its highest level since the summer of 2020. A stronger $ can make assets priced in the currency, such as gold, more expensive to overseas investors. Economic data showed US durable-goods orders dipping in Oct, weekly jobless claims hitting the lowest level since 1969, intl trade in goods sinking 14.6% in Oct & GDP rising at a slightly revised annualized 2.1% in Q3. Other data also highlighted historically elevated levels of inflation, with a measure of the cost of goods & services jumping 0.6% in Oct, based on the personal consumption expenditure index (PCE) & rose 5% over the past year from 4.4% in Sep, the highest level since 1990. The PCE index is the Federal Reserve's favored inflation indicators. Investors have been factoring in a more hawkish approach for 2022 by newly renominated Federal Reserve Chair Jerome Powell & the latest batch of data showing continued economic strength.
Gold halts 4-session price slide as U.S. investors turn to Thanksgiving
Oil futures ended
slightly lower after a rise in US crude inventories as
traders awaited OPEC+'s response to a coordinated release of strategic
reserves by several countries. West
Texas Intermediate crude for Jan settled 11¢
lower at $78.39 a barrel. Jan Brent crude the global benchmark, shed 6¢ to end at $82.25 a barrel. The Energy
Information Administration said crude inventories rose 1M barrels last week, while gasoline stocks fell 600K barrels & distillates rose 2M barrels. The forecast was looking for crude
inventories to fall by 1.3M barrels, while gasoline stocks were
seen unchanged & distillates had been expected to fall by 900K
barrels. The
American Petroleum Institute, a trade group, said oil
stocks rose 2.3M barrels last week, while gasoline supplies rose
600K barrels & distillate supplies fell 1.5M barrels. WTI & Brent both put in strong gains yesterday, after the Biden
administration announced it would release 50M barrels of crude
from the Strategic Petroleum Reserve in an effort joined by China,
India, Japan, South Korea & the UK to push down soaring energy
prices. OPEC+ — is due to meet next week. OPEC+ had rebuffed calls by the Biden
administration & others to speed up production increases. OPEC+ has
boosted output in monthly increments of 400K barrels a day as it
unwinds earlier production cuts. Now, traders wonder if OPEC+ will scrap planned increases in response to the release of strategic reserves.
Oil ends slightly lower as inventories rise, traders await OPEC+ response to reserve release
There has been plenty of excitement in the oil markets. That means large price swings. WTI in the 78s is still 6 below its Fri close. Currently, the powers are trying to figure what production cuts really mean & how much for each participant. Stocks ended the day with only modest changes.
Dow Jones Industrials
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