Dow fell 30, decliners modestly over advancers & NAZ was off 32. The MLP index was flattish in the 174s & the REIT index hardly budged in the 484s. Junk bond funds were mixed & Treasuries are higher after the inflation news. Oil edged up into the 71s & gold gained 7 to 1784,
AMJ (Alerian MLP index tracking fund)
| CL=F | Crude Oil | 71.32 | -0.38 | -0.5% |
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Consumer prices surged at the fastest pace in nearly 4 decades in Nov as Americans paid more for practically everything from groceries to cars to gasoline, solidifying hot inflation as a key trait of the economic recovery. The consumer price index rose 6.8% in Nov from a year ago, according to a new Labor Dept report, marking the fastest increase since 1982, when inflation hit 7.1%. The CPI – which measures a bevy of goods ranging from gasoline & health care to groceries & rents – jumped 0.8% in the one-month period from Oct. Core prices, which exclude more volatile measurements of food & energy, soared 4.9% in Nov from the previous year – a sharp increase from Oct, when it rose 4.6%. It was the steepest rate since 1991. The forecast expected that prices would surge 6.8% from the year-ago period & 0.7% from Oct. Price increases were widespread: Energy prices jumped 3.5% in Nov & are up 33.3% year over year. Gasoline is a stunning 58.1% higher than it was a year ago. Food prices have also climbed 6.1% higher over the year, while used car & truck prices – a major component of the inflation increase – are up 31%. The Labor Dept said the increases for food & energy were the fastest 12-month gains in at least 13 years. Rising inflation is eating away at strong gains & wages & salaries that American workers have seen in recent months – bad news for Pres Biden, who has seen his approval rating plunge as consumer prices rose. The White House has blamed the price spike on supply-chain bottlenecks & other pandemic-induced disruptions in the economy, while Reps have pinned it on Biden's massive spending agenda.
Inflation surges to 39-year high as consumer prices soar ahead of holidays
A deal between Senate Minority Leader Mitch McConnell & Majority Leader Chuck Schumer to allow the Senate to raise the debt ceiling with a simple majority cleared a key procedural vote, setting Congress on a glide path to averting a debt default. The bill cleared a cloture vote 64-36, with 13 Reps joining McConnell to advance the bill. This comes after months of Reps saying they would not help Dems raise the debt ceiling due to the partisan nature of the massive spending bills. Reps demanded Dems use budget reconciliation to raise the debt ceiling, but Schumer refused. Congress flirted with a debt default once in Oct before the 2 leaders came to a temporary deal. And the US was set potentially default on its debt later this month with the expiration of that deal before McConnell & some Reps backed this deal to let Dems implement a longer-term debt limit extension. "I believe we've reached here, a solution… that's consistent with Republican views of raising the debt ceiling," to a specific number, "and allows the Democrats to proudly own it, which they're happy to do," McConnell said earlier this week. The procedurally creative deal between McConnell & Schumer used a bill preventing Medicare cuts as a vehicle for language allowing the Senate to increase the debt limit via a simple majority vote on a one time basis. The vote yesterday pushed that bill past the 60-vote cloture hurdle, setting up a simple majority vote on final passage by Fri.
McConnell-Schumer debt ceiling deal clears Senate procedural hurdle, Congress on path to avert default
Treasury yields were flat after a hotter-than-expected inflation data following big gains this week. The yield on the benchmark 10-year Treasury note was little changed at 1.484% & the yield on the 30-year Treasury bond was less than a basis point lower at 1.857%. Yields move inversely to prices & 1 basis point is equal to 0.01%. Treasury yields have rebounded this week with the 10-year yield climbing from its close at the 1.3% level the week prior. The Nov consumer price index surged 6.8% year over year, the fastest rate since 1982 & the forecast called for the index to climb 6.7% from the year prior, while some investors feared an even higher figure. The yield on the 10-year note inched higher immediately following the CPI release before ebbing lower.
Treasury yields are flat after hot inflation number following big increase this week
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