Dow jumped 383 with more of the upbeat mood, advancers over decliners a solid 4-1 & NAZ gained 101. The MLP index wobbled in the 304s & the REIT index advanced 5+ to the 534s on lower interest rates. Junk bond funds were higher & Treasuries had heavy buying in bonds which caused yields to tumble. Oil fell back 2 as prices consolidated to the 69s & gold plunged 78 to 2634.
Dow Jones Industrials
As Pres-elect Donald Trump prepares to retake the White House in Jan, the National Association of Business Economics (NABE) is more optimistic on the outlook for the US economy. "NABE panelists’ forecasts for economic growth in 2024 and 2025 are higher than their previous projections," said NABE Pres Emily Kolinski Morris, global chief economist at Ford (F), in the group's Nov outlook, which was surveyed from Oct 29 - Nov 8. Ford is part of the 38 professional forecasters from companies that see GDP rising by 2.7% this year, a jump from Sep expectations of 2.6%. For 2025, growth estimates rose to 2.0% from the initial 1.8% Sep estimate. A combination of moderating inflation, more balanced risks & a Federal Reserve in easing mode are driving the improved economic sentiment. "Panelists look for the Committee to gradually but consistently lower its target for the federal funds interest rate, cutting the target by a quarter-percentage point in December, followed by a full percentage point in 2025," they noted. Policymakers expect interest rates to end the year around 4.4%, falling to 3.4% by 2025, according to the Federal Reserve's Sep projections. As for GDP, their estimate is for 2% growth for this year & next. Another momentum driver is the Tax Cuts & Jobs Act (TCJA), implemented by Trump during his first term & set to expire in 2025. 78% expect an extension while none expect an expiration. Many corps & business leaders see Trump's tax cuts as pro-growth & pro-business, including Scott Bessent, who the pres-elect nominated for Treasury secretary. He said these are critical to revive the US economy & should become permanent.
US economists more upbeat, see Trump tax cuts extended: NABE
Stubbornly high inflation is continuing to strain the budgets of American households this Thanksgiving, as a new report by LendingTree finds that the costs are up 19% from a year ago. LendingTree's survey found that on average, Thanksgiving dinner hosts plan to spend $431 on food, drinks & decor for the celebration. That includes an average of $265 for food & drinks, plus an additional $166 on Thanksgiving decor for the festivities. Those Thanksgiving hosts expect an average of 11 guests to attend the holiday party, the same number as last year. Inflation was on the minds of 60% of respondents, who said it has impacted their plans for celebrating the holiday – with 27% saying they'll change food choices, 26% turning to coupons more & 9% declining to host due to costs. Over one-third said they may reconsider opening their homes next year because of the cost. "What we found is that inflation is still having a really big impact on peoples' budgets when it comes to their Thanksgiving plans," LendingTree chief credit analyst Matt Schulz said about the 19% increase from a year ago. "Prices aren't rising as much as they have in the last couple of years, but it's still around and it's clearly still an issue that people are wrestling with this Thanksgiving." About 36% of potential hosts said that the amount they're planning to spend on Thanksgiving festivities will create a financial strain, while 14% said they regret their decision to host & 34% say they'll use credit cards to pay Thanksgiving costs. With inflation squeezing household budgets, there is an expectation that guests will help shoulder some of the burden either thru chipping in with cash or bringing an item to contribute to the feast. About 6 in 10 potential Thanksgiving hosts said they expect guests to help offset expenses in that way & 25% say they may reconsider extending an invitation next year if a guest arrives empty-handed.
Americans hosting Thanksgiving to spend 19% more than last year
The power needs of artificial intelligence & cloud computing are growing so large that individual data center campuses could soon use more electricity than some cities, & even entire US states, according to companies developing the facilities. The electricity consumption of data centers has exploded along with their increasingly critical role in the economy in the past 10 years, housing servers that power the applications businesses & consumers rely on for daily tasks. Now, with the advent of artificial intelligence, data centers are growing so large that finding enough power to drive them & enough suitable land to house them will become increasingly difficult, the developers say. The facilities could increasingly demand a gigawatt or more of power, 1B watts, or about twice the residential electricity consumption of the Pittsburgh area last year. Technology companies are in a “race of a lifetime to global dominance” in artificial intelligence, said Ali Fenn, pres of Lancium, a company that secures land & power for data centers in Texas. “It’s frankly about national security and economic security,” she said. “They’re going to keep spending” because there’s no more profitable place to deploy capital. Renewable energy alone won’t be sufficient to meet their power needs. Natural gas will have to play a role, developers say, which will slow progress toward meeting carbon dioxide emissions targets. Regardless of where the power comes from, data centers are now at a scale where they have started “tapping out against the existing utility infrastructure,” said Nat Sahlstrom, chief energy officer at Tract, a Denver-based company that secures land, infrastructure & power resources for such facilities. And “the funnel of available of land in this country that’s industrial zone land that can fit the data center use case — it’s becoming more and more constrained,” said Sahlstrom, who previously led Amazon's (AMZN) energy, water & sustainability teams.
Artificial intelligence data centers may use more electricity than entire cities
Stocks jumped after optimism when Trump picked Scott Bessent for Treasury. Investors also looked ahead to Federal Reserve-favored inflation data. Markets will shut on Thurs for the Thanksgiving holiday & close early on Fri.
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