Dow rose 153, advancers over decliners only 5-4 & NAZ gained 125. The MLP index added 2+ to 247 & the REIT index inched up 1 to the 336s. Junk bond funds fluctuated & Treasuries had modest buying which reduced yields (more below). Oil rebounded 1 to the 76s & gold sold off 23 to 1946.
AMJ (Alerian MLP Index tracking fund)
Pres Joe Biden said that all autoworkers deserve contracts like the ones recently won by the United Auto Workers (UAW) from General Motors (GM), Ford Motor (F) & Chrysler-parent Stellantis STLA). Biden, wearing a red UAW T-shirt given to him by a local union leader, said the deals won by UAW negotiators are “game changers” that set a “new standard” for blue-collar workers. The deals include 25% wage increases, including 11% upon ratification; reinstatement of cost-of-living adjustments; additional contributions for retirees; Bs in new investments & other benefits. The tentative deals must still be ratified by union members, voting is ongoing. “I’m a little selfish, I want this type of contract for all autoworkers,” Biden said during a visit with UAW Pres Shawn Fain. “And I have a feeling the UAW has a plan for that.” Biden said he personally spoke with STLA North America COO Mark Stewart regarding a plant in Belvidere that the company had indefinitely idled earlier this year & was expected to potentially close. “I told my team, ‘Make Stellantis know Belvidere is a priority,’ so I got on the phone and let him know personally I thought it was a priority,” Biden added. Under the UAW’s tentative agreement with STLA, the plant is expected to reopen to produce a midsize pickup truck in 2027, followed by Bs in new battery cell operations at or near the plant a year later.
Biden says all autoworkers deserve deals like those the UAW won from Detroit
Treasury yields were lower as investors considered what could be ahead for inflation & monetary policy following comments from Federal Reserve Chair Jerome Powell. The yield on the 10-year Treasury was trading 3 basis point higher at 4.60% & the yield on the 2-year Treasury was last down by 1.9 basis points at 5%. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Yields had risen yesterday after a 30-year bond auction was met with muted demand that was at the lowest level in around 2 years, with the yield on the 10-year Treasury climbing by as many as 13 basis points. Investors also assessed the outlook for the economy & how this could impact monetary policy after Fed Chair Powell said yesterday that the central bank is “not confident” it has done enough to bring inflation back to the 2% target range. Powell noted that inflation remains too high, adding that despite the progress being made in lowering it, there is still “a long way to go.” Oct's consumer & producer price index readings are expected next week.
Treasury yields fall as investors consider inflation outlook
The number of Americans filing new claims for unemployment benefits edged down last week, signaling that layoffs remain low even as the still-strong job market shows some signs of cooling. Initial claims for state unemployment benefits fell 3K to a seasonally adjusted 217K last week from an upwardly revised 220K in the prior week, the Labor Dept said. The forecast had expected 218K claims. Meanwhile, the rolls of those receiving benefits after an initial week of aid, a proxy for hiring, rose for a 7th straight week to 1.83M during the latest week, the highest level since Apr. Some economists contend the rise in continuing claims reflects difficulties adjusting the data for seasonal fluctuations. Others, however, say the persistence of the recent rise indicates that while new layoffs remain subdued, those out of work are experiencing a harder time finding a new job. That would be consistent with the latest hiring data showing the job market is cooling. The claims data adds to the case for the Federal Reserve to keep interest rates on hold for now.
New US jobless claims edge down; continued claims on the rise
Powell said in a speech yesterday before the International Monetary Fund, if it becomes appropriate to tighten policy further we will not hesitate to do so. Other Fed officials have suggested this week that they believe the central bank needs to implement more tightening. More speeches are coming today. Meanwhile volume is light on this semi-holiday.
Dow Jones Industrials
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