Dow rebounded 646 (not far from the highs), advancers over decliners 3-1 & NAZ climbed 139. The MLP index crawled up to the 173s & the REIT index jumped 8+ to the 481s. Junk bond funds edged higher.& Treasuries continued to be sold heavily while stocks were being purchased. Oil recovered 3+ to the 69s & gold was off 4 to 1779 (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 gov could run out of cash to pay its bills in just a few weeks if Congress fails to raise the federal debt ceiling, according to a new analysis from a think tank. The forecast from the Bipartisan Policy Center shows the "X Date" – the day when Treasury Secretary Janet Yellen runs out of maneuvering room to prevent the US from broaching the debt ceiling – will take place sometime between Dec 21 - Jan 28. "Those who believe the debt limit can safely be pushed to the back of the December legislative pileup are misinformed," Shai Akabas, the center's director of economic policy, said. "Congress would be flirting with financial disaster if it leaves for the holiday recess without addressing the debt limit." If the US failed to raise or suspend the debt limit, it would eventually have to temporarily default on some of its obligations, which could have serious & negative economic implications. Interest rates would likely spike & demand for Treasuries would drop; even the threat of default can cause borrowing costs to increase. Once the US runs out of money, Treasury would be unable to meet about 40% of all payments due in the several weeks that follow, according to the analysis. "How Treasury would operate in such an environment is unclear," it said. "Prioritization and delayed payments are two possibilities, but substantial uncertainty exists about operationalizing them."
The US government could run out of cash to pay the bills before Christmas
FedEx (FDX) forecasts will be its busiest day of the 2021 holiday season. “We’ve
seen a lot of people actually starting their Christmas shopping in the
month of October, which is fundamentally different than we have seen
traditionally in the past,” Ryan Kelly, VP of global
e-commerce at FedEx said. “What you see is a lot of messaging about
shop and ship early, pulling sales forward, pulling promotions forward.
A lot of retailers have really leaned into that this year.” In
Oct, FDX delivered approximately 96% of packages on time compared
with 99% for UPS (UPS) & 99% for the US Postal Service. On-time delivery above 95% is considered a sign of an
efficient network, especially with 70% of e-commerce being delivered to
homes, which is generally more time-consuming & less profitable than
business delivery. FDX estimates it will deliver 100M
more packages this year than it did from Black Friday - Christmas in
pre-pandemic 2019 & 10% more than the record 2020 season during Covid. Kelly said the growing many leading retailers has reduced strain on shipping networks. “Some of the best retailers
out there are really leaning into their retail stores. They have
deployed inventory in those stores, it improves transit and lowers cost
if a retailer leverages that localized inventory.” The stock went up 4.19.
If you would like to learn more about FDX, click on this link:
club.ino.com/trend/analysis/stock/FDX?a_aid=CD3289&a_bid=6ae5b6f7
FedEx sees another year of record holiday deliveries with Monday its busiest day
Pres Joe Biden will warn Russian leader Vladimir Putin that the US is prepared to impose severe economic countermeasures if Moscow carries out an attack on Ukraine, a senior administration official said. The video call, set for tomorrow, will happen against a backdrop of amped-up tensions triggered in part by an alarming deployment of Russian troops & defense equipment along the country's border with Ukraine. “These movements are consistent with the planning that we see underway for a military escalation in Ukraine,” the official said. “We have had intensive discussions with our European partners about what we would do collectively in the event of a major Russian military escalation in Ukraine,” the official added. “We believe that we have a path forward that would involve substantial economic countermeasures by both Europe and the United States that would impose significant and severe economic harm on the Russian economy, should they choose to proceed.”
Biden set to warn Putin of ‘substantial’ economic punishment if Russia attacks Ukraine
The US announced a diplomatic boycott of the 2022 Winter Olympics in Beijing, a move that had garnered bipartisan support from critics of China's human rights record. While US athletes will still participate, Pres Biden's administration will not send any official representation to the games, given China's “ongoing genocide and crimes against humanity in Xinjiang and other human rights abuses,” White House press secretary Jen Psaki said. Psaki was referring to China's reported treatment of Uighur Muslims in that northwestern territory, which has been declared a genocide both by Biden & the administration of former Pres Trump. “The athletes on Team USA have our full support. We will be behind them 100 percent as we cheer them on from home. We will not be contributing to the fanfare of the games,” Psaki added. “U.S. diplomatic or official representation would treat these games as business as usual in the face of the [People’s Republic of China’s] egregious human rights abuses and atrocities in Xinjiang, and we simply can’t do that,” she continued. “We will continue to take actions to advance human rights in China and beyond.” The move, which was expected, was preemptively criticized by China’s Foreign Affairs Ministry spokesman Zhao Lijian. “It is a travesty of the Olympic spirit, it is political provocation, and an offense to the 1.4 billion Chinese people” he said. “If the U.S. is insistent on going down the wrong path, China will take necessary resolute and countermeasures,” Zhao added. The Chinese gov under Pres Xi Jinping has been condemned by dozens of countries over its actions in Xinjiang, as well as its crackdown against pro-democracy protesters in Hong Kong in 2019 & 2020.
U.S. diplomats will boycott Beijing Winter Olympics over human rights abuses
Gold futures posted a modest decline, as a pickup in Treasury yields & the $ helped to dull appetite for the precious commodity, which has been held in check by uncertainties about the spread of omicron & Federal Reserve policies. The most active Feb gold contract lost $4 to settle at $1779 an ounce, following a weekly decline of a smidgen for the most-active contract. Gold also shot up around 1.2% on Fri. Gold rose to end last week as a weaker-than-expected jobs report was seen as unlikely to derail the Fed's plan to reduce, monthly, market-supportive purchases of Treasuries & mortgage-backed securities, with the report leading a flight to assets perceived as safe. However, the prospects of higher rates have weighed considerably on gold prices. In today's dealings, the 10-year Treasury note was yielding 1.437%, up from 1.342%, while the $ was up 0.2%, as gauged by the ICE US Dollar Index. Meanwhile, investors await the consumer-price index data due out Fri.
Gold ends lower Monday as inflation, Fed interest-rate outlook remain in focus
Crude-oil prices settled with a gain of nearly 5%, as concerns surrounding the omicron variant of coronavirus that causes COVID-19 eased a bit. Other factors, including a move by the Saudis to raise crude prices for some buyers & rising tensions in the Middle East, helped to shift some focus away from the pandemic. Recent reports have offered some cause for optimism about the new strain's potential impact on the economy. The US's top medical adviser Anthony Fauci said that omicron didn't appear to produce a “great deal of severity” in cases, aligning with some early research that indicates that infections tend to be milder compared against other variants. Meanwhile, Saudi Arabia increased its prices of Arab Light oil over the weekend for Jan that it sells to Asia & US by up to a 2-year high. West Texas Intermediate rose $3.23 (4.9%) to settle at $69.49 a barrel after the US benchmark produced a weekly loss of 2.8% on Fri. Prices today ended the session at their highest in a week. In electronic trading after the settlement, the front-month WTI contract touched highs above $70. Feb Brent crude, the global benchmark, rose $3.20 (4.6%) to settle at $73.80 a barrel, the highest finish since Nov 29. Prices last week lost 2.4%, based on the front-month contract. Last week, both WTI & Brent notched 6 straight weekly declines, marking the longest such streak since 2018
Oil settles at highest in a week, up nearly 5%, as omicron fears ease
The Fed's next monetary policy moves, in the face of the dual concerns
of rising inflation & the Omicron variant, have become a central
focus for investors. The Dow began the day with a strong climb & the buyers kept coming for the entire session. All news is treated as good & negative thoughts were dismissed. Additionally, stocks were oversold recently. Nov inflation news is coming at week's end & that could be sobering.
Dow Jones Industrials
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