Dow dropped 339 with selling in the PM, decliners over advancers 2-1 & NAZ pulled back 166. The MLP index slid to the 197s & the REIT index was off 6+ to the 472s. Junk bond funds fluctuated & Treasuries finished higher. Oil gained 1+ to the 86s & gold jumped 30 to 1843 (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 White House is looking to restart negotiations with moderate Sen Joe Manchin on Pres Biden's sweeping social safety net & climate change package as Dems look to salvage key parts of the spending bill ahead of the 2022 midterm elections. Congressional momentum for the roughly $1.7T Build Back Better plan crumbled at the end of Dec, when Manchin – citing the highest inflation in a generation – abruptly withdrew his support for the bill. But he has not engaged with the White House in the new year, has publicly telegraphed key changes that could elicit his support for a narrower version of the bill. The White House said it remained confident that Dems could approve large portions of the legislation & reach an agreement with Manchin. White House chief of staff Ron Klain said that the Biden team wants to get the legislation approved as quickly as possible. "One lesson we learned in the first year is, I think, the less we talk about our negotiations with specific senators and congressmen, the better we are so I’m going to say our talks with Sen. Manchin will proceed directly and privately," he said. Manchin, who previously approved about $1.8T in spending, has not said whether he would support a slimmed-down bill, but he has voiced growing concern about the hottest inflation in 4 decades as well as geopolitical uncertainty in Russia & Ukraine. His chief concerns with the legislation include the one-year expansion of the boosted child tax credit payment, which expired in Jan without congressional action, as well as some provisions intended to combat climate change. He has also insisted the measure should go thru Senate committees in order to examine its economic effect & focus on rolling back the 2017 Trump tax cuts – something that Sen Kyrsten Sinema opposes. "The only reason I even voted to get on reconciliation was to fix the taxes so that everybody paid their fair share," Manchin said last month. "The ultra-wealthy, corporations that weren't paying anything, everyone would pay their fair share."
Biden looks to salvage negotiations with Manchin over mega-spending bill
Oil prices rose to a 7-year high amid ongoing supply concerns & escalating tensions in the Middle East, but Exxon Mobil (XOM) CEO Darren Woods is confident they will trend lower. In the immediate future, however, the oil exec said the market should expect volatile prices as the industry's recovery from Covid-19 continues. “As you get supply and demand tighter, events that happen around the world ... lead to a lot more volatility because there’s less of a buffer, and I think we’re going to see that for some time now,” he said. “Until industry begins to ramp up productions and increase the level of supply to meet this growing demand, or in turn demand starts to come down a little bit ... you’re going to see a lot more volatility until we get better stability.” Woods added that it's hard to predict when the market might balance out given the many players involved. West Texas Intermediate crude futures, the US oil benchmark, traded as high as $85.74 per barrel, a price last seen in 2014. The price marks a blistering recovery after the contract briefly traded in negative territory in Apr 2020, as the pandemic sapped demand for petroleum products. Intl benchmark Brent crude broke above $88 per barrel, also hitting the highest level since 2014. As producers continue to keep a lid on production while demand recovers, some observers have called for oil to top $100 per barrel this year. But Woods said he doesn't get “overly enamored” with today’s high prices. When looking at new investments the company focuses on ensuring operations can be competitive across a wide range of price environments, he said. ″[W]e anticipated higher prices. We also anticipate a lot of volatility. And frankly we’re anticipating lower prices as we go forward,” he said.
Oil prices are at a 7-year high, but Exxon CEO says the ultimate trend is lower
Pfizer (PFE) said that laboratory testing showed its COVID-19 pill Paxlovid appears to be effective against the omicron variant of the coronavirus. The company said 3 separate studies demonstrated that the in vitro
efficacy of nirmatrelvir, the antiviral treatment's main component, was
maintained against the variant of concern. In an initial study it said 3 separate studies demonstrated that the in vitro
efficacy of nirmatrelvir, the antiviral treatment's main component, was
maintained against the variant of concern. EC50 is a measure of drug potency that shows a concentration that is effective in producing 50% of the maximal response. A 3rd study in partnership with the Icahn School of Medicine at Mount
Sinai in New York City used a SARS-CoV-2-specific
immunofluorescence-based assay to detect the virus & measure the in
vitro potency of nirmatrelvir & other authorized COVID-19 therapeutics
against variants of concern. Treatments were tested against variants in 2 cell lines & PFE
said the results provided confirmation to its findings that nirmatrelvir
remains the only orally administrable, authorized compound that has
been shown to have low nanomolar in vitro activity against omicron, to
date. The stock fell 57¢.
If you would like to learn more about PFE click on this link:
club.ino.com/trend/analysis/stock/PFEa_aid=CD3289&a_bid=6ae5b6f
Studies show whether Pfizer pills are effective against COVID variant
Gold futures climbed to settle at their highest in 2 months, with the precious metal finishing in positive territory for the first time in 4 sessions. The modest rise for bullion comes as the $ has softened & Treasury yields have slipped, after a sharp rise, helping to raise investment interest in the precious metal. Feb gold added $30 (1.7%) to settle at $1843 an ounce, following declines in each of the past 3 trading sessions. Prices for the most-active contract ended at their highest since Nov 19 & marked their strongest daily advance since Dec. A slump in the equity markets & weakness in the $, which gold is usually priced in, has helped to mitigate some of gold's decline. The ICE US Dollar Index a measure of the $ against a ½-dozen major currencies, was trading 0.2% lower yesterday but has been up 0.4% this week. The prospects of a series of interest-rate hikes by the Federal Reserve has had the greatest negative effect on gold because higher rates dull the appeal of nonyielding gold. The rate-setting FOMC next gathers on Jan 25-26.
Gold prices settle at 2-month high, buoyed by inflation worries
Oil futures extended their climb, a day after ending at a more than 7-year high, after a pipeline fire temporarily disrupted crude flows from Iraq to Turkey & the Intl Energy Agency raised its forecast for 2022 demand growth. Officials said crude flows thru the Kirkuk-Ceyhan pipeline resumed, after it was stopped yesterday due to a blast near the pipeline in southeastern Turkey. Officials said the explosion was due to a falling power pylon, not an attack. The pipeline has a capacity of 450K barrels a day. Oil futures surged following initial reports of the explosion, giving back some of the gains after operations were resumed. The reaction to the outage & its subsequent resolution underscores how sensitive the market is to supply concerns. West Texas Intermediate (WTI) crude for Feb rose $2.03 (2.4%) to $87.46 a barrel, after trading as high as $87.92. The most active Mar WTI contract which becomes the front month after tomorrow's settlement, was up $1.58 (1.9%) at $86.41 a barrel. Mar Brent crude, the global benchmark, rose $1.33 (1.5%) at $88.84 a barrel, after hitting a high of $89.17. Both WTI & Brent yesterday closed at their highest since 2014. The Paris-based Intl Energy Agency forecast global oil demand to return to pre-pandemic levels this year. The IEA hiked its oil-demand growth forecast for 2022 by 200K barrels a day, to 3.3M barrels a day. It also raised its demand growth forecast for 2021 by 200K barrels a day to 5.5M barrels a day. OPEC, in its monthly report yesterday, left its forecast for 2022 growth in oil demand unchanged at 4.2Mn barrels a day, estimating total global consumption at 100.8M barrels a day.
Oil prices close at highest in more than seven years as supply worries persist
Dow Jones Industrials
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