Dow went up 81, advancers over decliners 3-1 & NAZ gained 108. The MLP index rose 4 to the 365s & the REIT index was up about 1 taking it near 221. Junk bond funds were mixed & Treasuries fluctuated keeping yields flattish (more below). Oil was up almost 1 to the high 73s & golden added 4 to 1988.
AMJ (Alerian MLP Index tracking fund)
Initial filings for unemployment insurance ticked higher last week but remained generally low in a tight labor market. Jobless claims for last week totaled 198K, up 7K from the previous period & a bit higher than the 195K estimate, the Labor Dept reported. Though the number was slightly higher than expectations, the total indicates that companies are slow to lay off workers despite expectations that the unemployment rate will rise thru the year. Continuing claims, which run a week behind, edged up 4K to 1.69, below the estimate for 1.694M. The 4-week moving average of weekly claims, which smooths volatility in the numbers, rose slightly to 198K, but has been below 200K since mid-Jan. The relatively benign claims numbers come despite aggressive Federal Reserve efforts to slow down inflation. In large part, the central bank is targeting a labor market beset by a sharp supply-demand imbalance in which there are nearly 2 open jobs for every available worker. According to estimates last week, central bankers expect the unemployment rate to rise to 4.5% this year, from its current 3.6% level. Doing so would require the loss of more than 540K jobs, according to an Atlanta Fed calculator.
Jobless claims edge up to 198,000, higher than expected
Treasury yields were little changed as investors looked
to economic data that could provide fresh hints about the outlook for
the economy and inflation. The yield on the 10-year Treasury added 6 basis points to 3.568% & the 2-year Treasury was last trading at 4.132% after rising by around 3 basis points. Yields & prices move in opposite directions & one basis point equals 0.01%. Investors assessed the state of the economy as recent market turmoil led by the banking sector settled. Regional & global banks have been under pressure since the collapse of Silicon
Valley Bank earlier this month, prompting fears about a financial
crisis. Both stock & bond markets have since been highly volatile. One of the Fed's favored inflation measures, the personal consumption expenditures price index, is due tomorrow.
Treasury yields hold steady as investors assess the state of the U.S. economy
Brazil & China have reportedly struck a deal to ditch the $ in favor of their own currencies in trade transactions. The deal will enable China & Brazil to carry out trade & financial transactions directly,
exchanging yuan for reais, or vice versa, rather than first converting
their currencies to the $. The Brazilian Trade & Investment Promotion Agency (ApexBrasil) said
the new arrangement is expected to "reduce costs" & "promote even
greater bilateral trade and facilitate investment." China is
Brazil's largest trading partner, accounting for more than a 5th of
all imports, followed by the US. China is also Brazil's largest export market, accounting for more than a 3rd of all exports. China overtook the US as Brazil's top trading partner in
2009. Today, Brazil is the largest recipient of Chinese investment in
Latin America, driven by spending on high-tension electricity
transmission lines & oil extraction. Officials from both
countries reached a preliminary agreement to ditch the $ in
Jan & the deal was announced after a high-level China-Brazil
business form in Beijing. Brazilian Pres Luiz da Silva, sworn in on Jan, has moved to
strengthen ties with Beijing after a period of rocky relations under his
predecessor, Jair Bolsonaro, who used anti-China rhetoric on the
campaign trail & in office.
China, Brazil strike trade deal to phase out US currency
The trade deal between China & Brazil is important but is not getting much attention. China has been telling the rest of the world for years that America is a declining power that is over the hill.. Many countries are believers & that carries negative implications for the US.
Dow Jones Industrials
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