Dow went up 192, advancers over decliners about 2-1 & NAZ rose 191. The MLP index added 4 to the 296s & the REIT index was even in the 397s. Junk bond funds were mixed & Treasuries saw a little selling which brought higher yields. Oil gained 1+ to go over 70 & gold slid 2 to 2626.
Dow Jones Industrials
A group of banks & business groups are suing the Federal Reserve over the annual bank stress tests. The Bank Policy Institute, which represents big banks is joining the American Bankers Association, the Ohio Bankers League, the Ohio Chamber of Commerce & the US Chamber of Commerce to file the suit, which they said aims to "resolve longstanding legal violations by subjecting the stress test process to public input as required by federal law." The groups said they don't oppose stress testing, but that the current process falls short & "produces vacillating and unexplained requirements and restrictions on bank capital." The Fed's stress test is an annual ritual that forces banks to maintain adequate cushions for bad loans & dictates the size of share repurchases & divs. The Federal Reserve announced that it is looking to make changes to the bank stress tests & will be seeking public comment on what it calls "significant changes to improve the transparency of its bank stress tests and to reduce the volatility of resulting capital buffer requirements." The Fed said it made the determination to alter the tests because of "the evolving legal landscape," pointing to changes in administrative laws in recent years. It didn't outline any specific modifications to the framework of the annual stress tests. While the big banks will likely view the changes as a win, it may be too little too late. Also, the alterations may not go far enough to satisfy the banks' concerns about onerous capital requirements. "These proposed changes are not designed to materially affect overall capital requirements," according to the Fed.
Biggest banks sue the Federal Reserve over annual stress tests
Native-born American men have been fleeing the workforce in droves in a decades-long trend that coincides with a rise in immigration, according to a new analysis sounding the alarm on the issue. The Center for Immigration Studies (CIS) released a study showing the share of working-age (16-64), US-born men not participating in the labor force has soared since the 1960s, going from 11.3% neither working nor looking for work in April 1960 to 22.1% as of Apr of this year. "This is relevant to the immigration debate because one of the arguments for allowing in so many legal immigrants, or even tolerating illegal immigration, is that there are not enough workers," CIS said in a blog post detailing its findings. "But this ignores the enormous increase in the number of working-age people not in the labor force. "Further, being out of the labor force is associated with profound social problems such as crime, overdose deaths, and welfare dependency," the authors wrote. "Policy-makers should consider encouraging work among the millions on the economic sidelines rather than ignoring the problem by bringing in ever more immigrants." The report said the total number of US-born men & women of working age who are not in the labor force was 43M as of Apr 2024, which is an increase of 8.5M since 2000. The number of working-age US-born men not in the labor force increased by 13.2M from 1960 to 2024. Over the same time period, the number of working-age immigrant men participating in the labor force increased by 14.1M. The trend of US-born workers leaving the workforce while foreign-born workers replace them does not show any signs of stopping. According to The Heritage Foundation economist EJ Antoni, Bureau of Labor Statistics data shows the net job growth in America over the past year can be attributed entirely to laborers born outside the US. "There are now 1.1 million fewer native-born Americans employed than a year ago," Antoni wrote on X. "[A]ll net job growth has gone to foreign-born workers, totally just over 400k since Nov '23."
New study shows alarming impact of immigration on US workforce
The roughly $1000 monthly price tag of Eli Lilly's (LLY) weight loss drug Zepbound put the blockbuster treatment out of reach for Willow Baillies, 29, whose insurance does not cover it. Baillies,
a human resources specialist based in Milwaukee, Wisconsin, has been
attempting to lose weight & dealing with chronic autoimmune issues for
years, so she turned to a cheaper alternative: a compounded, off-brand
version of tirzepatide. Tirzepatide
is the active ingredient in Zepbound & in LLY's diabetes
counterpart Mounjaro, which are part of a class of highly popular
medications called GLP-1s. She
said compounded tirzepatide has helped change her life dramatically
since she began taking it in Jun, alleviating pain from her autoimmune
issues & helping her lose about 52 pounds. She said it costs her
around $350 per month. But soon, compounded versions of
tirzepatide could become inaccessible to Baillies & other patients who
rely on them. Patients & health-care experts said that could force
some consumers to stockpile doses, switch to other treatments, or stop
receiving care altogether due to financial constraints. Others could
turn to a potentially unsafe method of mixing vials themselves. That's because the Food & Drug Administration (FDA) on Thurs announced that branded tirzepatide is no longer in short supply, a decision that will largely prevent compounding pharmacies from
making & selling cheaper versions of the drug in the next 2-3
months. During FDA-declared shortages,
pharmacists can legally make compounded versions of brand-name
medications. But drugmakers & some health experts have pushed back
against the practice because the FDA does not approve compounded drugs,
which are essentially custom-made copies prescribed by a doctor to meet a
specific patient's needs. The
FDA's decision, based on the agency's comprehensive analysis of data,
could mean that more patients with insurance coverage will be able to
access Zepbound after months of limited supply. It also suggests that LLY's multibillion-dollar effort to ramp up manufacturing for tirzepatide is starting to pay off. But
it will also leave other patients in limbo, closing a niche, lucrative
market for compounded tirzepatide that patients say helped fill a gap in
care for those who can't afford to pay out of pocket for Zepbound. The stock fell 3.04.
The major averages are seeing muted gains in a holiday-shortened trading session. The equity markets will close at 1 p.m. ET today & will be closed tomorrow. Best holiday wishes to all. 😀
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