Dow advanced 241, advancers over decliners better than 4-1 & NAZ went up 101. The MLP index rebounded 4+ to the 217s & the REIT index rose in the 363s. Junk bond funds were higher & Treasuries saw more selling which raised Treasury yields. Oil rose 1 to the high 68s & gold pulled back a very big 27 to 1955.
AMJ (Alerian MLP Index tracking fund)
Treasury Secretary Janet Yellen said the gov is ready to provide further guarantees of deposits if the banking crisis worsens. The former Federal Reserve chair said authorities believe they have taken appropriate actions to stem liquidity problems in the sector, but will do more if needed. “The steps we took were not focused on aiding specific banks or classes of banks. Our intervention was necessary to protect the broader U.S. banking system,” Yellen said. “And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.” The comments come in the wake of several bank failures, most notably Silicon Valley Bank & Signature Bank. Customers worried that liquidity problems caused by duration risk with the banks' holdings could cause similar institutions not to be able to meet deposit requirements. In response, regulators said they would guarantee all deposits, going beyond the previous $250K level for the 2 banks. Yellen's comments indicate that the authorities are prepared to do the same for other institutions that need it. A report Mon indicated that regulators are studying a way to guarantee all deposits. One idea that has been floated has been to offer a tiered pricing system in which depositors would pay extra to guarantee deposits above $250K. “The situation is stabilizing. And the U.S. banking system remains sound,” Yellen said. “The Fed facility and discount window lending are working as intended to provide liquidity to the banking system. Aggregate deposit outflows from regional banks have stabilized.” Yellen noted that regulators will be looking at whether stronger regulations will be needed to prevent a similar situation in the future.
Treasury Secretary Yellen says the government could backstop more deposits if necessary
Sales of previously owned homes rose 14.5% in Feb compared with Jan, according to a seasonally adjusted count by the National Association of Realtors. That put sales at an annualized rate of 4.58M units. It was the first monthly gain in 12 months & the largest increase since Jul 2020, just after the start of the Covid-19 pandemic. Sales were, however, 22.6% lower than they were in Feb of last year. These sales counts are based on closings, so the contracts were likely signed at the end of Dec & throughout Jan, when mortgage rates had fallen sharply. The average rate on the popular 30-year fixed loan hovered in the low 6% range throughout Jan after reaching a high of 7% last fall. The relative drop caused a jump in sales of newly built homes, before rates jumped back toward 7% in Feb. They now stand at 6.67%, according to Mortgage News Daily. “Conscious of changing mortgage rates, home buyers are taking advantage of any rate declines,” said Lawrence Yun, chief economist for the Realtors. “Moreover, we’re seeing stronger sales gains in areas where home prices are decreasing and the local economies are adding jobs.” “Inventory levels are still at historic lows,” Yun added. “Consequently, multiple offers are returning on a good number of properties.” This could start to heat prices again, but with mortgage rates now higher than they were in Jan it will be harder for some buyers to compete.
Home sales spike 14.5% in February as the median price drops for the first time in over a decade
Sen Joe Manchin put the Biden administration on blast yesterday after Pres Biden carried thru with his promise to veto bipartisan legislation that would have killed a regulation that encourages private retirement plan fiduciaries to consider environment, social & governance (ESG) factors when making investment decisions for over 150M Americans. Manchin, who was 1 of 2 Senate Dems to vote with Reps to nullify the proposed Dept of Labor (DOL) rule, issued a heated statement condemning the Biden administration for, in his view, prioritizing politics over securing the best financial returns for Americans. The other was Sen Jon Tester. "This Administration continues to prioritize their radical policy agenda over the economic, energy and national security needs of our country, and it is absolutely infuriating," Manchin said. "West Virginians are under increasing stress as we continue to recover from a once in a generation pandemic, pay the bills amid record inflation, and face the largest land war in Europe since World War II," his statement continued. "The Administration’s unrelenting campaign to advance a radical social and environmental agenda is only exacerbating these challenges." "This ESG rule will weaken our energy, national and economic security while jeopardizing the hard-earned retirement savings of 150 million West Virginians and Americans," Manchin added. "Despite a clear and bipartisan rejection of the rule from Congress, President Biden is choosing to put his Administration’s progressive agenda above the well-being of the American people." The White House had given Congress notice that Biden intended to veto the nullification resolution after it passed 216-204 in the House & 50-46 in the Senate. In a statement accompanying his veto, Biden defended the rule, arguing that it allows retirement plan fiduciaries to make "fully informed" investment decisions.Dow Jones Industrials
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