Dow recovered 543, advancers over decliners 2-1 & NAZ went up 140. The MLP index added 1 to the 206s & the REIT index jumped 8 to the 457s. Junk bond funds rose along with the stock market & Treasuries were sold, raising the yield on the 10 year Treasury 11 basis points to 1.82%. Oil surged 3+ to the 106s (but below earlier highs) & gold retreated 15 to 1928.
AMJ (Alerian MLP index tracking fund)
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US employers added 475K jobs in Feb, according to ADP's latest national employment report, more than the 388K expected. "Hiring remains robust but capped by reduced labor supply post-pandemic.
Last month large companies showed they are well-poised to compete with
higher wages and benefit offerings, and posted the strongest reading
since the early days of the pandemic recovery," said Nela Richardson,
chief economist at ADP. However, hiring for small businesses took a step back, with the loss
of 96K workers as these size companies find it harder to keep pace
with the pay & benefits to attract workers in a tight labor market. ADP's
data is viewed as a precursor to Fri's jobs report. Employers are
seen having added 400K new nonfarm jobs in Feb, down from a much
larger than expected gain of 467K in Jan. The unemployment rate
is anticipated to slip to 3.9%, the lowest since Feb 2020.
US companies added way more jobs than expected last month: ADP
Pres Biden pledged in his first State of the Union speech to trim the US deficit by $1T by the end of 2022, but he was light on details as to how that might be achieved given his agenda that includes Ts in new spending. "By the end of this year, the deficit will be down to less than half what it was before I took office," Biden said in his address, adding that he would be "the only president ever to cut the deficit by more than one trillion dollars in a single year." The federal deficit hit a record $3.1T in fiscal year 2020 & was $2.77T in fiscal year 2021, according to gov data. The pres did not go into specifics on achieving that goal directly but he made the vow while discussing his broader economic agenda, which has long included raising taxes on corps & individuals making $400K a year. He also laid out spending initiatives aimed at lowering everyday costs for Americans while inflation sits at a 40-year high.
State of the Union: Biden vows to cut deficit by $1 trillion by end of the year
Federal Reserve Chair Jerome Powell still sees interest rate hikes coming, but noted today that the Russia-Ukraine war has injected uncertainty into the outlook. In remarks prepared for dual appearances this week before House & Senate committees in Congress, he acknowledged the “tremendous hardship” the Russian invasion of Ukraine is causing. “The implications for the U.S. economy are highly uncertain, and we will be monitoring the situation closely,” Powell said. “The near-term effects on the U.S. economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain,” he added. “Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways. We will need to be nimble in responding to incoming data and the evolving outlook.” The remarks come amid 40-year highs for inflation in the US, complicated by a Ukraine war that has driven oil prices to around their highest levels in a decade. Consumer prices increased 7.5% from a year ago in Jan & the Fed's preferred inflation gauge showed its strongest 12-month gain since 1983. Powell & his fellow policymakers have been indicating for weeks that they plan to start raising benchmark interest rates to tackle inflation. He reiterated the stance today that the process will involve “interest rate increases,” along with indications that the Fed eventually will start reducing its bond holdings. “We will use our policy tools as appropriate to prevent higher inflation from becoming entrenched while promoting a sustainable expansion and a strong labor market,” he said. “We have phased out our net asset purchases. With inflation well above 2 percent and a strong labor market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month.”
Fed Chair Powell notes 'highly uncertain' Ukraine impact, but says rate hikes are still coming
Powell's testimony brought out bargain hunters after recent selling. However the Volatility Index continues at a high reading in the 32s (above the mid teens in better times). Investors remain nervous.
Dow Jones Industrials
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