Dow climbed 187, advancers over decliners 3-2 & NAZ was up 19. The MLP index gained 2+ to 240 & the REIT index crawled up 1 to 385. Junk bond funds were slightly lower & Treasuries fluctuated with yields about even (more below). Oil added 1+ to the 78s & gold slid back 2 to 1963.
AMJ (Alerian MLP Index tracking fund)
The Federal Reserve raised interest rates 10 times since Mar 2022
in order to lower inflation. But the move has taken a toll on the
wallets of many Americans, according to a survey by the Allianz Life Insurance Company of North America. 
61% of Americans said they took a financial hit due to rising
interest rates in the past 12 months, Allianz reported. Rising interest
rates could make it more expensive to take out a mortgage, finance a
vehicle & perform other financial transactions. It could also impact the interest rates consumers pay on credit cards & other forms of debt. In Q1, Americans' collective debt hit a record of more than $17T. In particular, credit card debt was at a near-record high of $917B, according to TransUnion. "Credit
cards are one of the most common financial products in our country,
providing the bulk of short-term credit for families," the CFPB said. "Interest rates on credit cards have risen substantially, with average
interest rates going over 20%. Given the trends for the 175 million
Americans with credit cards, the CFPB estimates that outstanding credit
card debt may continue to set records and could even hit $1 trillion." After the Fed met in Jun, Fed Chair Jerome Powell expressed that the
central bank could raise interest rates again in order to bring
inflation down to its target range. "Looking ahead, nearly all
Committee participants view it as likely that some further rate
increases will be appropriate this year to bring inflation down to 2
percent over time," Powell said. "And I will have more to say about monetary policy after briefly reviewing economic developments." 64% of Americans worry that recession is around the
corner, according to the Allianz survey. That marked an increase from
57% in Q1. Baby Boomers are particularly concerned as 67%
said they're worried about a recession, as opposed to 63% of
millennials. "Many Americans worry that rising interest rates are
a harbinger of a recession," Kelly LaVigne, VP of consumer
insight at Allianz Life, said. While there's no official definition of a recession, many economists
suggest it represents an economic downturn marked by 2 consecutive
qtrs of loss in GDP. However, GDP increased at an annual rate of 2%
in Q1, according to the 3rd & final estimate
released by the Bureau of Economic Analysis (BEA). GDP increased by
2.6% in the final qtr of 2022. Still, an economic slowdown could be possible.
High interest rates take a toll on America's finances: Allianz
Treasury yields were mostly lower, ahead of the Federal
Reserve's meeting this week to discuss its monetary policy plans &
announce its latest interest rate decision. The yield on the 10-year Treasury was down by more than 3 basis points to 3.802% & the 2-year Treasury yield declined more than 1 basis point at 4.831%. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Federal Reserve policymakers will meet on Tues-Wed &
are expected to announce another interest rate increase at the
conclusion of their meeting. Guidance issued alongside the rate
decision & comments from Fed Chair Jerome Powell in the
post-meeting press conference will also be key for investors. They will
likely provide clues about what is next for monetary policy & how the
Fed views the state of the economy, including the outlook for inflation. Elsewhere, the ECB is due to announce an interest rate
decision on Thurs & the Bank of Japan will meet at the end of the
week.
Treasury yields fall slightly as investors prepare for Fed meeting
China is ramping up measures aimed at boosting its economy ahead of a key Politburo meeting this week which will review the country's H1 economic performance. In the past week, authorities have announced a series of pledges targeted at specific sectors or aimed at reassuring private & foreign investors of a more favorable investment environment, but they were largely broad measures, with some lacking concrete details. Chinese leaders have also signaled in recent weeks they are likely to be judicious & targeted in their policy support. Today, China's economic planning agency announced a series of measures to promote private investment. This follows a rare joint pledge on Wed, between the Chinese gov & the Communist Party, which vowed to treat private companies the same as state-owned enterprises. Beijing also pledged to ensure fair treatment in areas ranging from intellectual property & land rights to financing & labor supply. In a 17-point statement today, the National Development & Reform Commission pledged to attract more private capital to participate in the construction of major national projects & key industrial chain supply chain projects. The agency is also encouraging private investment projects to issue real estate investment trusts (REITS) in the infrastructure sector to promote asset diversification & further broaden investment & financing channels for private investment. Business sentiment has generally soured amid lackluster economic growth after China's initial recovery following its exit from “zero Covid” faltered. The last 3 years have also seen heavy-handed crackdowns on internet platform companies, the education & gaming sectors as well as real estate developers. The NDRC vowed last Tues to “restore and expand” consumption in a wide-ranging plan to bolster growth that includes boosting household income, improving business environment for private firms & stabilizing youth employment.
China has announced a slew of measures to bolster its economy
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