Dow advanced 74 (but off early highs), advancers slightly ahead of decliners & NAZ was up 17. The MLP index added 2+ to the 155s & the REIT index fell 3+ to the 286s. Junk bond funds fluctuated & Treasuries were weak. Oil rose to almost 60 & gold pulled back 10 to 1812.
AMJ (Alerian MLP index tracking fund)
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St Louis Federal Reserve pres James Bullard said that he doesn't see a bubble in asset prices & doubts the central bank needs to start tightening policy anytime soon. With prices surging in the stock market & in alternative assets like bitcoin, Fed officials have faced repeated questions about whether low rates & Ts in bond buying have helped create dangerously high valuations. But Bullard said that there aren't clear signs of excesses though he conceded that stocks are “highly valued on the whole.” “The biggest thing in equities is really these tech firms and how high are you going to value these guys,” he added. “They’ve got great technology, they’ve got great revenues, business models [where] the sky is the limit. So, where investors want to value those is really driving a big chunk of the market.” “I’m not really sure you want to call that part a bubble,” he continued. “That’s just normal investing, trying to get your head around what those companies are really worth.” In its response to the pandemic, the Fed has slashed its benchmark short-term borrowing rate to near zero & is buying at least $120B of bonds each month in an effort to keep liquidity flowing into the economy. With growth seemingly back on solid footing & concerns rising over inflation, markets have worried over when the Fed might start pulling back on its highly accommodative actions. But he said that day isn't imminent even though the Fed is “monitoring very closely to see if this does get out of control.” He noted that signs are pointing to a strong economic rebound this year. “Let’s be clear. Wall Street thinks the U.S. economy might grow faster than China this year” with a “roaring U.S. economy fueled by fiscal stimulus and monetary policy.”
Fed’s Bullard doesn’t see asset bubble and doubts policy will tighten soon
China dethroned the US last year to become Europe's top trading partner for the first time, data from the European statistics office has shown. EU exports to China grew by 2.2% last year & imports rose by 5.6%. In comparison, exports to the US dropped by 8.2% & imports fell by 13.2%. The figures showed that China now has an even bigger role in how European economies perform. China, where the first Covid-19 cases were reported, has not gone thru severe social restrictions for a 2nd time as has been the case in many European nations. As a result, the Chinese economy is performing slightly closer to pre-Covid levels in comparison with other parts of the world, where restrictions are still taking a toll on activity. China is expected to register the 2nd-highest growth rate globally in 2021, according to forecasts from the IMF.
China overtakes U.S. as Europe’s main trading partner for the first time
Caterpillar (CAT), a Dow stock, is one of the world’s leading industrials companies, & it is poised
for some growth in the next few years, industry analysts say. Rising
commodity prices, expected construction activity growth & possibly
new infrastructure legislation in DC are all positive signs for the compay in the near future. It is good news for a company that
has experienced some tough times in recent years. The company bet
heavily on expanding its mining equipment business about a decade ago
when commodity prices were sky high, only to watch prices fall again. But sales fell along with them. Since then, the firm known
for its big yellow iron equipment has been restructuring & is
developing some new products & solutions that could contribute to its
growth, including self-driving vehicles, remotely operated equipment &
telematics software. In the meantime, analysts say rising
commodity prices are a sign at least some parts of the world are ready
to get back to work again. The stock rose 4.39.
If you would like to learn more about CAT, click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar has hit record highs in recent months. Here’s how it’s recovering from the pandemic
Even with he Texas storm, buyers are attracted to stocks. As usual, there is a lot going on in DC although investors are not greatly disturbed.
Dow Jones Industrials
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