Dow pulled back 104, decliners over advancers 5-4 & NAZ sank 244. The MLP index stayed near 170 & the REIT index dropped 5+ to the 484s. Junk bond funds hardly budged & Treasuries are being sold. Oil was off 1 to just above 70 & gold dropped 13 to 1774.
AMJ (Alerian MLP index tracking fund)
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Senate Majority Leader Chuck Schumer said the Senate will vote on raising the debt ceiling today.
"The Senate will act tomorrow to prevent default," Schumer said during a speech on the Senate floor yesterday, adding that the Senate will also aim to pass Pres Biden's social spending bill "before the Christmas holiday." The move comes after the House & Senate passed legislation allowing
for the debt ceiling to be raised with a simple majority, bypassing the
possibility of a Rep filibuster in the evenly split upper
chamber. Treasury Secretary Janet Yellen has said the gov
could reach the debt limit as early as tomorrow. Dems will attempt
to raise the ceiling enough to get the gov thru the 2022
midterm elections. Schumer has been helped in his effort to fast-track raising the debt
ceiling by Senate Minority leader Mitch McConnell who has twice worked out deals with the Dem leader in hopes of avoiding a US default. But the issue has also caused deep divisions within the GOP, with former Pres Trump releasing a statement admonishing McConnell for giving in on the debt ceiling.
Dems determined to pass Biden's trillion dollar spending bill and that's not all
The inflation picture does not get any prettier, as the Labor Dept reported that producer prices rose at a record pace in Nov. The reading on wholesale prices follows last week's measure of consumer inflation that showed prices rose at an annual rate of 6.8% last month, the fastest pace in nearly 40 years. The PPI was led by increases in prices for iron & steel scrap, as well as gasoline, fresh fruit & vegetables. Prices for goods rose 1.2% last month, while prices of services rose 0.7%. The Federal Reserve begins a 2-day meeting where it will consider increasing its announced plan to reduce by $15B a month its $120B monthly purchases of Treasuries & mortgage-backed securities. The purchases have been part of the Fed's aggressive approach to fighting the economic effects of the coronavirus. Most observers expect the central bank to pare its purchases by $30B a month but market watchers will also want to hear what Fed Chair Jerome Powell says about the Fed's latest economic forecasts & expectations for inflation in 2022 & beyond. Meanwhile, the NFIB Small Business Optimism Index rose 0.2 points in Nov to 98.4, but a record 59% of small business owners said they had increased their prices last month, the highest reading since 1979. “As the end of the year nears, the outlook for business conditions is not encouraging to small business owners as lawmakers propose additional mandates and tax increases,” said NFIB Chief Economist Bill Dunkelberg. “Owners are also pessimistic as many continue managing challenges like rampant inflation and supply chain disruptions that are impacting their businesses right now.”
Wholesale Inflation Rose at Record Annual Rate of 9.6%
Sen Joe Manchin expressed fresh about soaring
inflation after a key measure of consumer prices hit a 39-year record
last week, but kept the door open to passing Pres Biden's sprawling
social spending & climate plan. The
West Virginia Dem, who said that Congress needs to be more cognizant of the
nation's soaring debt as Dem lawmakers rush to pass the
pres's $1.7T economic plan before a self-imposed
Christmas deadline. "Inflation is real. It's not transitory. It's
alarming. It's going up, not down. And I think that should be something
we're concerned about. And geopolitical fallout," Manchin, said, referencing Russia's buildup of troops on Ukraine's border. Manchin, a linchpin in the 50-50 Senate, has repeatedly declined to say
whether he supports the latest iteration of Biden's "Build Back Better"
bill & has maintained that he wants to see the text before determining
whether he supports the measure or not. Still, he sounded skeptical
about Dems' Christmas deadline, which would give the Senate just 2 weeks to pass a massive piece of legislation. "I know people have been in a hurry for a long time to do something, but
basically I think we're seeing things unfold that allows us to prepare
better," Manchin continued.
Manchin fires back on newest inflation report as consumer prices hit record
As expected the inflation news was dreary. That should become the main topic at the Fed meeting. Tomorrow's announcement in the PM will be watched closely by traders. Those guys in DC are eager to solve the debt ceiling crisis which they created by slopping more money around. Sadly the only math they understand is how much money they need to get reelected.
Dow Jones Industrials
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