Dow dropped 54, advancers over decliners better than 3-2 & NAZ fell 60. The MLP index gained 2+ to the 198s & the REIT index added 3+ to the 465s. Junk bond funds went up & Treasuries were being purchased, lowering yields. Oil jumped 7+ to the 102s & gold skyrocketed 39 to 1948.
AMJ (Alerian MLP index tracking fund)
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The number of Americans filing for unemployment benefits declined last week, the latest sign that business demand for workers remains elevated amid an ongoing labor shortage. The Labor Dept data shows that applications for last week fell to 214K from an upwardly revised 229K a week earlier, beating the 220K forecast. Continuing claims, the number of Americans who are consecutively receiving unemployment aid, fell to 1.4M – the lowest level for this gauge since 1970. One year ago, nearly 4M Americans were receiving unemployment benefits. Claims have largely moderated near pre-pandemic levels as the economy continues to recover & Americans ramp up their spending levels. Unprecedented levels of gov spending & a speedy vaccine rollout helped to jumpstart the US economy, which expanded 5.7% in 2021. Businesses have struggled to keep up with the demand, however & have reported difficulties in onboarding new employees. This report suggests that companies are making an effort to retain the workers they already have.
Jobless claims inch lower as workers remain in high demand
The Bank of England raised interest rates for the 3rd consecutive meeting but struck a more dovish tone as the Russia-Ukraine conflict is expected to keep inflation higher for longer. The Bank's Monetary Policy Committee voted 8-1 in favor of a further 0.25 percentage point hike to its main Bank Rate, taking it to 0.75%. UK inflation was already running at a 30-year high prior to Russia’s invasion of Ukraine, which sent energy prices surging & will exert more upward pressure on the central bank's inflation projections. At its last meeting in Feb, the Monetary Policy Committee imposed back-to-back interest rate hikes for the first time since 2004 & upped its forecast for inflation to a 7.25% peak in Apr, against a backdrop of strong growth & a robust labor market in the UK. The Bank said at the time that any further tightening of monetary policy would depend on the medium-term prospects for inflation, which were then propelled upward by Moscow's assault on Ukraine & subsequent threats to energy supply. “Global inflationary pressures will strengthen considerably further over coming months, while growth in economies that are net energy importers, including the United Kingdom, is likely to slow,” the report added. The Bank now expects inflation to increase further in the coming months to around 8% in Q2 & perhaps even higher later in the year.
Bank of England hikes rates again, adopts dovish tone as Ukraine war adds to inflation concerns
Russia's Finance Ministry claimed it had fulfilled crucial interest payments on 2 $-denominated eurobonds, saying the order had been made to payment agent Citibank in London. The ministry said it would later comment separately on whether the $117M in total payments has been credited. The delivery of payment on the 2 eurobond coupons is a key test for Russia. The Kremlin is staring down the prospect of its first foreign currency debt default in more than a century after the US intl allies imposed a barrage of economic sanctions over its invasion of Ukraine. The penalties have blocked a bulk of Russia's gold & foreign exchange reserves & sought to cut off Moscow from the global financial system. Russia had until the end of business Wed to fulfill its obligations to pay $117M in interest on 2 sovereign eurobonds. A spokesperson reportedly said that any potential default would be “entirely artificial” because Russia had the funds necessary to fulfill its external debt obligations. “The fact is that from the very beginning we have said that Russia has all the necessary funds and potential to prevent a default — there can be no defaults,” he said. “Any default that could arise would have an entirely artificial character,” he added. Finance Minister Anton Siluanov said yesterday that Russia had attempted to deliver the payment & it was now up to the US to decide whether it went thru.
Russia claims to have ordered crucial bond payment as it seeks to avoid historic debt default
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