Dow climbed 290, advancers over decliners 2-1 & NAZ gained 84, The MLP index was about even in the 149s & the REIT index went up 2 to the 383s. Junk bond funds fluctuated & Treasuries were sold. Oil was steady in the 55s & gold plkunged 47 to 1787 (along with a decline in silver).
AMJ (Alerian MLP index tracking fund)
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The number of Americans filing for first-time unemployment benefits last week edged down but remained elevated as the coronavirus pandemic continues to trigger a high number of layoffs. Figures released by the Labor Dept show that 779K Americans filed first-time jobless claims last week, lower than the 830K forecast. The number has been stubbornly high for months, hovering around 4 times the pre-crisis level, although it's well below the peak of almost 70M that was reached when stay-at-home orders were first issued in Mar. Almost 7M Americans (40% of the labor force) have filed for unemployment benefits during the pandemic. Continued claims, the number of Americans who are consecutively receiving unemployment benefits, fell to 4.59M, a decline of 193K from the previous week. The report shows that roughly 17.8M Americans were receiving some kind of jobless benefit thru Jan 16, a decrease of 486K from the previous week. Many more Americans are receiving jobless aid from & federal programs that Congress established with the passage of the CARES Act in Mar: One extends aid to self-employed individuals, gig workers & others who typically aren't eligible to receive benefits & the other provides aid to those who have exhausted their state benefits.
Another 779,000 Americans filed for unemployment benefits last week
Cleveland Federal Reserve Pres Loretta Mester said top regulators should be looking at the GameStop (GME) trading saga & how it is impacting markets. However, she said the situation isn't impacting how she approaches monetary policy & doesn't see the Fed making any adjustments in reaction to the uproar. “I don’t think it’s something that’s influencing my monetary policy views right now,” Mester said. “I do think that we need to ensure that it’s a fair marketplace, because as you know financial markets are important for the economy,” she added. “I’m glad that Janet Yellen is getting all the regulators together to look at what happened.” Yellen, the newly appointed Treasury secretary, has called for a summit of regulatory agencies including the Fed &d its New York district, the Securities & Exchange Commission, the Commodity Futures Trading Commission & others. The meeting is in response to market tumult that began with traders on Reddit buying up shares of companies — including GameStop (GME) — that big investors had been betting against. Those shares have swung wildly since then & the matter has raised questions about market stability & the possibility that manipulation played a role. Questions also have been raised about whether easy Fed policy has been creating instability. The central bank has kept interest rates anchored near zero for nearly a year & is buying at least $120B of bonds a month. That has created a massive influx of liquidity, with money searching for places to go. But Mester said she doesn't see Fed policy as a direct cause of the market issues & doesn't anticipate changes. “We certainly understand that financial stability is a necessary thing in order to reach our dual mandate goals of price stability and maximum employment,” she added. “You’re going to get volatility in the market from various sources. I don’t think this should influence what our monetary policy is.”
Fed’s Mester doesn’t see policy changes coming from GameStop saga
The productivity of American workers fell by 4.8% in Q4 — the biggest decline in 39 years — as the coronavirus cast another dark shadow over the economy. The decline in productivity in the final 3 months of 2020 capped off a chaotic year. Although productivity rose by 2.6% last year, it only did so because hours worked fell even faster than output. Output, or the amount of goods & services produced, slid 4.2% in 2020. Hours worked sank by an even larger 6.6%, the gov said. Productivity is determined by the difference between output & hours worked. Last year the pandemic destroyed Ms of jobs & disrupted every walk of life, making it hard to take at face value the normal measures of the economy such as productivity. Analysts say it will take awhile for the economy to regain some sense of normalcy & render productivity data useful again. In Q4, companies increased output by 5.3%, but hours worked tumbled at an annual 10.7% pace. Both are extremely high. As a result, unit-labor costs jumped by a 6.8% annual pace in Q4. They rose by 4.3% for the full year, another extremely high number that reflects the distortions caused by the pandemic.
U.S. productivity falls 4.8% in the 4th quarter to mark biggest drop since 1981
Investors were encouraged by the data for jobless claims. The Dow is near its recent highs & hopes for another stimulus package are bringing out stock buyers. However DC is an extremely uncertain place these days.
Dow Jones Industrials
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