Dow plunged 444 (but off early lows), decliners over advancers about 5-1 & NAZ sank 313. The MLP index fell 2+ to the 188s & the REIT index dropped 5+ to the 485s. Junk bond funds were weak & Treasuries saw more selling bringing the yield on the 10 year Treasury up 3 basis points to 1.8% (more below). Oil slid lower in the 78s & gold was off 4 to 1792.
AMJ (Alerian MLP index tracking fund)
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Treasury yields moved higher, as investors turned
their focus to inflation data & Senate testimony by Federal Reserve
Chair Jerome Powell. The yield on the benchmark 10-year Treasury note added more than 3 basis point, rising to 1.806% & the yield on the 30-year Treasury bond ticked up more than 2 basis point to 2.144%. Yields move inversely to prices & 1 basis point is equal to 0.01%. The Dec consumer price index is due Wed & last month's producer price index is slated for Thurs. Higher inflation readings might prompt the Fed to raise
interest rates early.
10-year yield rises to 1.8% to start the week, with inflation data in focus
As the Federal Reserve has a decision to make regarding their approach to record-high inflation, former Kansas City Federal Reserve pres & CEO Thomas Hoenig predicted that prices will remain high.
THOMAS
HOENIG: I think given the very strong demand, given the various cost of
labor that's a supply shock, some of the trade issues, I think
inflation is going to stay high. There's a lot of still excess
consumption ability in the economy with these very high savings rates,
so there's going to be a lot of demand. So, inflation is going to be
high and the Federal Reserve is going to have to deal with that.
They know they have to move but they're still going to be very
cautious about that unemployment rate. And that's the thing that I think
will slow them down if they do slow down. And if they do move and they
see low numbers, they start backing off, then that will be even worse
because their credibility will be gone. It'll be even more difficult.
They think to deal with inflation in the future. So they just have to
they have to bear down, do it carefully, slowly but firmly and not go
back and forth. And that's their challenge.
Inflation will 'stay high,’ former Kansas City Fed president says
Pfizer (PFE) CEO Albert Bourla said a vaccine that targets the omicron variant of Covid will be ready in Mar & the company's already begun manufacturing the doses. “This vaccine will be ready in March,” he said. “We [are] already starting manufacturing some of these quantities at risk.” Bourla added the vaccine will also target the other variants that are
circulating. Bourla said it is still not clear whether or not an omicron
vaccine is needed or how it would be used, but PFE will have some
doses ready since some countries want it ready as soon as possible. “The
hope is that we will achieve something that will have way, way better
protection particularly against infections, because the protection
against the hospitalizations and the severe disease — it is reasonable
right now, with the current vaccines as long as you are having let’s say
the third dose,” Bourla added. Real-world data from the UK has shown that PFE's &
Moderna's (MRNA) vaccines are only about 10% effective at preventing
symptomatic infection from omicron 20 weeks after the 2nd dose,
according to study from the UK Health Security Agency. However, the
original 2 doses still provide good protection against severe illness,
the study found. Booster shots are up to 75% effective at preventing symptomatic infection, according to the study. PFE stock fell 22¢.
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
Pfizer CEO says omicron vaccine will be ready in March
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