Dow went up 186 with buying into the close, advancers over decliners 2-1 & NAZ settled 106 higher. The MLP index stayed in the 224s & the REIT index fell 1 to the 376s. Junk bond funds continued in demand & Treasuries were sold, raising yields. Oil was fractionally higher to the 75s & gold added 3 to 1881 (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)
Federal Reserve Chair Jerome Powell said the central bank will not get involved in issues like climate change that are beyond its congressionally established mandate & vowed the institution will not become a “climate policymaker.” His remarks follow calls from some Dems for the Fed to play a more active role in addressing climate change & ensuring the country’s financial system is prepared for climate-related risks. Powell has reinterred that climate change is not a main consideration for the Fed when developing monetary policy, noting that climate-related issues are more for the federal government than for his institution. “Decisions about policies to directly address climate change should be made by the elected branches of government and thus reflect the public’s will as expressed through elections,” Powell added. “Without explicit congressional legislation, it would be inappropriate for us to use our monetary policy or supervisory tools to promote a greener economy or to achieve other climate-based goals,” Powell continued. “We are not, and will not be, a ‘climate policymaker.” Powell said the Fed's regulatory powers give it a “narrow” role to ensure financial institutions “appropriately manage” climate-related risks & added the Fed should “not wander off to pursue perceived social benefits that are not tightly linked to our statutory goals and authorities.”
Powell reiterates Fed is not going to become a ‘climate policymaker’
Federal Reserve Governor Michelle Bowman said she expects more interest rate increases ahead, with higher rates to prevail for a while until inflation is subdued. “I am committed to taking further actions to bring inflation back down to our goal,” the central bank official said. “In recent months, we’ve seen a decline in some measures of inflation but we have a lot more work to do, so I expect the [Federal Open Market Committee] will continue raising interest rates to tighten monetary policy.” The FOMC has increased the Fed's benchmark borrowing rate 7 times since Mar 2022, for a total of 4.25 percentage points. Last week, minutes from the Dec meeting indicated that most members were on board with additional hikes in 2023, likely taking the fed funds rate slightly above 5%. Reflecting the consensus at that meeting, Bowman said she sees elevated rates holding until there are “compelling signs that inflation has peaked and for more consistent indications that inflation is on a downward path” before easing up on restrictive monetary policy. “I expect that once we achieve a sufficiently restrictive federal funds rate, it will need to remain at that level for some time in order to restore price stability, which will in turn help to create conditions that support a sustainably strong labor market,” she added. Policy will be guided by incoming economic data for indications of how Fed policy is impacting growth, she said. Bowman drew upon past experience, noting the mistakes the Fed made in the 1970s, when it raised rates to address inflation but then lowered them when the economy slowed. She said she understands that Fed policy could slow the economy & in particular the labor market, but insisted that doing nothing carried higher costs. “It’s important to keep in mind that there are costs and risks to tightening policy to lower inflation, but I see the costs and risks of allowing inflation to persist as far greater,” Bowman said.
Fed’s Bowman says there’s ‘a lot more work to do’ to bring down inflation
Microsoft (MSFT), a Dow company, is declining comment on reports the technology company may have closed a deal to buy a stake in artificial intelligence research laboratory OpenAI. "We don’t comment on speculation," a spokesperson said. Semafor,
which first reported the development, said it's unclear if the deal has
been completed. Documents reportedly sent to prospective investors in
recent weeks suggested MSFT was aiming to complete the transaction
by the end of 2022. Semafor, which first reported the development, said it's unclear if the
deal has been completed & added that documents reportedly sent to prospective
investors in recent weeks suggested Microsoft was aiming to complete the
transaction by the end of 2022. Semafor said the deal would give Microsoft
75% of OpenAI’s profits until it recoups its investment. Afterwards the
marker of Windows & Xbox would hold a 49% stake in the AI firm. Other
investors would control 49%, leaving the remaining 2% to OpenAI's
nonprofit parent. MSFT stock rose 93¢.
If you would like to learn more about MSFT, click on this link:
club.ino.com/trend/analysis/stock/MSFT_aid=CD3289&a_bid=6ae5b6f7
Microsoft eyes $10 billion investment in artificial intelligence company
Gold futures gave up early gains to finish with a modest
loss, a day after prices settled at their highest in 8 months.
Federal Reserve Chair Jerome Powell did not discuss the outlook for
the US economy or monetary policy in prepared remarks for a panel
discussion sponsored by the Swedish central bank in Stockholm. The next big move for gold may come after Thurs's
release of the Dec consumer price index reading.
Gold for Feb fell $1 to settle at
$1876 an ounce.
Gold Futures Give Up Gains to Finish with a Slight Loss
Oil futures finished higher, with US prices up a 4th straight session. Crude prices gained as economic optimism grows for not just China, but also the Eurozone. The oil market is digesting a global slowdown that might not be as bad as feared. Moves for oil followed a monthly report from the Energy Information Administration, which showed expectations for record high global consumption in 2024 for liquid fuels, including gasoline, diesel & jet fuel. The US benchmark WTI crude for Feb rose 49¢ (0.7%) to settle at $75.12 a barrel.
Oil futures finish higher, with U.S. prices up a fourth straight session
This was another listless day for the stock market. The chart below shows Dow has been going sideways for a couple of months & remains below highs made a year ago. Recession fears & higher interest rate fears are on the minds of all investors.
Dow Jones Industrials
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