Dow crawled up 28, decliners over advancers 3-2 & NAZ pulled back 163. The MLP index fell 2+ to the 231s & the REIT index was off 1+ to the 402s. Junk bond funds fluctuated & Treasuries had a little selling, raising yields (more below). Oil slid lower in the 79s & gold declined 4 to 1941.
AMJ (Alerian MLP Index tracking fund)
Treasury yields climbed as investors awaited the start of the Federal Reserve's first meeting of the year & considered the outlook for the economy. The yield on the benchmark 10-year Treasury was up 2 basis points to 3.538% & the 2-year Treasury yield was trading over 4 basis points higher at 4.251%. Yields & prices move in opposite directions & olne basis point equals 0.01%. Many investors are expecting a 25 basis point increase at the conclusion of the Fed's latest interest rate decision on Wed. That would be a further slowdown of the pace of rate hikes implemented by the Fed in its battle against inflation. Many investors have been hoping for this as concerns about the central bank leading the US economy into a recession by increasing rates too much & too quickly have spread. Data released earlier this month showed that both consumer & wholesale prices fell on a monthly basis in Dec. On Fri, the personal consumption expenditure index, one of the Fed's favored inflation measures, indicated that though prices are still rising, they are doing so at a reduced pace.
Treasury yields rise ahead of Fed meeting
The Centers for Disease Control & Prevention (CDC) urged people with weak immune systems to take extra precautions to avoid Covid after the dominant omicron subvariants knocked out a key antibody treatment. These precautions include wearing a high quality mask & social distancing when it's not possible to avoid crowded indoor spaces. The guidance comes after the Food & Drug Administration (FDA) pulled its authorization of Evusheld, a combination antibody injection that people with weak immune systems took as an additional layer of protection to prevent Covid infection. The FDA pulled Evusheld because it is not effective against 95% of the omicron subvariants circulating in the US. This includes the XBB subvariants which are now causing 64% of new cases, as well as the BQ family that is responsible for 31% of reported infections. Although most Americans have largely returned to normal life as the Covid pandemic has ebbed, people with weak immune systems remain at higher risk of severe disease because they do not mount as strong of an immune response to the vaccines. Still, it is important for people with weak immune systems to stay up to date on their Covid vaccines by receiving the omicron booster because the shots can slash the risk of severe disease.
CDC urges people with weak immune systems to take extra precautions after Covid knocks out Evusheld
Wealthy Russian oligarchs are likely investing in US commercial real estate & trying to sidestep sanctions imposed after the invasion of Ukraine last year, according to a warning sent to banks by the Treasury Dept's financial crimes & intelligence unit. The Financial Crimes Enforcement Network (FinCEN) told banks to be on the lookout for suspicious commercial real estate (CRE) transactions that may be carried out by sanctioned Russian elites, oligarchs, their family members & entities they use to move their wealth. FinCEN's alert noted that the agency "assesses that sanctioned Russian elites and their proxies are likely attempting to exploit several vulnerabilities in the CRE market in order to evade sanctions." "Thanks to international pressure and the economic restrictions that more than 30 countries have imposed on Russia for its brutal war against Ukraine, sanctioned Russian elites are increasingly left with fewer options for moving and hiding their ill-gotten wealth," FinCEN Acting Director Himamauli Das said. Commercial real estate presents an attractive opportunity to potentially avoid sanctions because they "routinely involve highly complex financing methods and opaque ownership structures that can make it relatively easy for bad actors to hide illicit funds in CRE investments" the alert said.
Russian oligarchs invest in US commercial real estate, bypassing sanctions as feds warn banks
Investors are looking for direction. Earnings reports from major companies are coming & the Fed will give its big report on Wed. That will make for a lot of excitement.
Dow Jones Industrials
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