Dow jumped 264, advancers over decliners 3-1 & NAZ gained 123. The MLP index went up 1 to 217 & the REIT index rose 3+ to 384. Junk bond funds crawled higher & Treasuries had selling, bringing higher yields. Oil inched higher in the 72s, but still near yesterday's nearly one year low, & gold added 5 to go over 1803.
AMJ (Alerian MLP index tracking fund)
According to a recent Gallup poll, many US adults indicated their households have experienced financial hardship because of rising prices. The poll found the proportion of Americans who said inflation was making their households experience financial hardship was 55%, marking a 1% drop from Aug. Of those in the latest poll reporting experiencing financial hardship, 13% said it as "severe" & impacting their ability to keep up their "current standard of living," according to Gallup. In comparison, the percentage of US adults saying rising prices caused financial hardship for their households was 49% in Jan of this year & 45% in Nov 2021. Inflation — as measured by the Consumer Price Index (CPI) & the Personal Consumption Expenditures (PCE) Index — has recently been hovering at painfully high levels, though it cooled slightly in Oct. Data released Dec 1 by the Bureau of Labor Statistics showed the CPE index increased 0.3% month-over-month & 6% year-over-year in Oct. Meanwhile, the CPI went up 0.4% from Sep-Oct, rising 7.7% from last year, the Labor Dept reported. The Gallup poll also revealed what percentages of US adults in 3 income levels said their households had faced financial hardship over inflation, with lower-income Americans seeing the highest percentage, at 77%. About 60% of middle-income adults reported rising prices causing hardship. Among upper-income Americans, less than ½ (42%) said inflation had done so. The poll was conducted online among over 1800 US adults between Nov 9-27 with a 3% margin of error.
55% of US adults report experiencing financial hardship because of rising prices
Treasury yields moved higher as investors assessed the outlook for
the Federal Reserve's interest rate hikes & awaited key inflation data
slated for tomorrow. The yield on the 10-year Treasury was trading at 3.482% after rising by around 7 basis points. It had fallen by as many as 9 basis points yesterday. The 2-year Treasury yield was last up by around 5 basis points at 4.304%. Yields & prices move in opposite directions & one basis point equals 0.01%. Uneasiness about the Fed's policy plans around interest rates
continued as mixed economic data suggested to many investors that
interest rates would need to be hiked further & remain higher for
longer. The Fed has been battling with persistently high inflation
throughout 2022 & has raised rates by a total of 375 basis points
during the year, including 4 consecutive 75 basis point increases. Many investors are concerned that this pace would the US economy into a
recession. Nov's producer price index data (PPI) — which measures wholesale inflation — comes out tomorrow.
Treasury yields climb as investors fret over Fed policy
The number of Americans filing for unemployment benefits ticked higher last week as high inflation & steep interest rates begin to cool the US economy. Figures
released by the Labor Dept show initial claims for last rose to 230K from the upwardly revised 226K
recorded a week earlier. That is above the 2019 pre-pandemic average of
218K claims. Continuing claims, filed by Americans who are
consecutively receiving unemployment benefits, rose to 1.67M for the latest week, up by 62K from the previous week's revised
level. It marked the highest level for recurring unemployment
applications since Feb, indicating that workers who lose their jobs
are struggling to find new ones. A number of notable companies have all announced layoffs in recent weeks. For months, the labor market has remained one of the few bright spots in the economy. The Nov jobs report showed that employers added 263K new jobs last month, a solid figure that suggests hiring remains strong. But
it may not last long. The Federal Reserve is raising interest rates at
the fastest pace in decades as it tries to crush runaway inflation. Although the labor market is still healthy, both the housing &
manufacturing sectors are weakening and inflation remains painfully high.
Jobless claims climb higher to 230,000 as economy cools
Buyers are back, but not in force. They are cautious with all that is going on. Tomorrow's PPI will drive the stock market short term. Again, this gives signals about price increases in coming months.
Dow Jones Industrials
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