Dow rose 71 (but 300 below early highs), decliners over advancers 5-4 & NAZ jumped 194. The MLP index was off 2+ to the 178s & the REIT index rose 2+ to the 476s. Junk bond funds were mixed & Treasuries ran into selling, bringing higher yields. Oil recovered 2+ to almost 71 & gold inched up 1 to 1788
AMJ (Alerian MLP index tracking fund)
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After an abbreviated session Fri, the markets reopened for a
full week of business, featuring a slew of earnings & key economic
data, including the Beige Book, ADP employment & the jobs report. Federal Reserve Chair Jerome Powell & Treasury Secretary Janet
Yellen will also testify before lawmakers at a hearing on CARES Act
oversight & Congress will race to pass a funding bill ahead of
Fri's looming deadline for a gov shutdown. The week kicks off relatively quietly on the earnings & economic
data front with pending home sales. New York Fed pres John Williams
will also speak during a virtual event to launch the New York
Innovation Center (NYIC), a strategic partnership with the Bank for
Intl Settlements (BIS) Innovation Hub. Meanwhile, those
who missed out on Black Friday deals over the holiday weekend will be
able to take advantage of Cyber Monday sales from retailers.
Congress races to avert government shutdown; Yellen and Powell to testify
Preliminary data from Sensormatic Solutions also reported that while
many continue to do their shopping online, customer traffic also rose
47.5% compared to last year's Black Friday. "It’s clear shoppers are shopping earlier this season, just as they
did last season," said Brian Field, senior director of global retail
consulting at Sensormatic. Field pinpointed COVID-19 & supply chain worries as the main issues moving consumers to spread out their holiday shopping. Field
noted that Black Friday levels of shopping traffic had increased most
in the South, followed by the Midwest & then the West & Northeast. "If
you start seeing outbreaks in the U.S., the thing that I think would
drive [traffic down] would be if governments and communities start
locking down again," Field said. "Otherwise, I think the trends will be
very similar to what we expect them to be." Amazon (AMZN), by contrast, had a record-breaking Black Friday, according to CEO of Amazon Worldwide Consumer David Clark. Clark said he did not believe inflation is having a profound influence on consumers yet. "I don't see inflation particularly impacting consumers this holiday
season so far, and we're very optimistic about what's to come," he added. The stock soared 63 to 3563.
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Supply chain worries push customers to take advantage of Black Friday deals
Oil prices jumped as traders bet that Fri's sharp sell-off, prompted by fears that the new omicron Covid variant will curb demand for petroleum products, was overdone. West Texas Intermediate (WTI) crude futures, the US oil benchmark, gained $2.49 (3.7%) to $70.68 per barrel. Earlier in the session it traded as high as $72.93. The move puts the contract back above $70, after it broke below that key level on Fri. WTI tumbled 13% on Fri for its worst day since Apr 2020 & also closed below its 200-day moving average — a closely-followed technical indicator — for the first time since Nov 2020. Brent crude, the intl oil benchmark, advanced 2.7% to $74.68. The contract declined 11.6% on Fri & along with WTI registered a 5th straight week of losses. Even before Fri's sharp drop oil had been trending lower after WTI hit a 7-year high above $85 in Oct. Brent crude hit a 3-year high last month. Oil's whipsaw moves come ahead of a key meeting between OPEC & its oil-producing allies, where the group will decide on production policy for Jan. At present OPEC+ has been returning 400K barrels per day to the market each month as it unwinds the historic production cuts it implemented in Apr 2020 as the pandemic sapped demand for petroleum products. In addition to the latest price action, the group will also be evaluating the supply & demand trajectory after the US & other nations last week announced plans to tap the Strategic Petroleum Reserve (SPR) in an effort to curb the rapid side in fuel costs. The Biden Administration said that the US would release 50M barrels from the SPR.
Oil jumps, recouping some losses following worst day of the year
The Dow started the day strong, but selling dragged it far below early highs. However NAZ did well as tech stocks are in demand. Investors may pause until more is known about the new virus variant. Additionally, the potential gov shutdown on Fri is another dark cloud that investors are watching.
Dow Jones Industrials
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