Markets drift lower after economic data disappoints

Dow declined 81 with selling in the PM, decliners over advancers about 2-1 & NAZ was off 4.  The MLP index was off 2+ to the 187s & the REIT index added 1+ to the 432s.  Junk bond funds continued higher & Treasuries remain in strong demand.  Oil climbed to 66 & gold went up 14 to 1898 (more on both below).

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A group of Senate Reps plans to send Pres Biden an infrastructure counteroffer worth about $1T this week, according to a GOP source familiar with the negotiations.  The 8-year proposal – which is much closer in line to the Biden administration's target – would be paid for with unused coronavirus relief money & would not include any tax hikes.  The White House has said it would like to see progress on a bill by Memorial Day & has indicated that it wants to send the measure to Biden's desk before the Aug recess.  The chance of a deal between the 2 parties appeared to crumble over the weekend after the Biden administration cut its offer from $2.3T to $1.7T & a key Rep negotiator said it was still "well above the range of what can pass Congress with bipartisan support." 

Senate Republicans prepping $1T infrastructure counteroffer

The 7-day average of daily Covid cases in the US is below 25K for the first time since last Jun, data from Johns Hopkins University shows, as the pace of new infections continues a downward trend.  The country is reporting about 25K daily cases, down 22% from a week ago.  According to the Centers for Disease Control & Prevention (CDC), the US is averaging 1.8M vaccinations per day over the past week & about 49% of the US population has received at least one dose.  Nearly 26K cases were reported yesterday, bringing the 7-day average of daily new infections to just below 25K.  Average daily case counts have declined by at least 5% in 41 states & DC over the past week.  The US is seeing an average of 570 Covid deaths per day over the last week, according to Hopkins data.  About 49% of the US population has had at least one shot, according to the CDC, with more than 130M Americans, or 39%, fully vaccinated.  For those ages 18 & older, about 62% have received at least one dose of a vaccine.  Pres Biden's goal is to get that number to 70% by Jul 4.  The White House announced today that ½ of the adults in the US will be fully vaccinated by the end of the day.  CDC data shows the 7-day average of vaccinations administered in the US is 1.8M per day over the past week, down about 3% from one week prior.

130 million in U.S. fully vaccinated, average daily Covid cases dip below 25,000

These days, it can feel like there are very few issues Dems & Reps agree on.  That is, of course, unless someone’s proposing a bill aimed at challenging Beijing's growing global influence.  The US Innovation & Competition Act of 2021, a wide-ranging piece of legislation expected to cost about $200B, seeks to do just that.  Assembled by Senate Majority Leader Chuck Schumer, the bill has united senators on both sides of the political aisle behind a bundle of provisions to boost American research & technology manufacturing deemed critical to US economic & national security interests.  The scope of the bill, the end result of input from at least 6 Senate committees, reflects the many fronts in the US-China rivalry, as well as the urgency of a global semiconductor shortage that has clobbered automakers, home appliance manufacturers & phone producers.

Democrats, GOP team up on bill targeting China as U.S. suffers microchip shortage

Gold futures climbed, hitting a high near $1900 an ounce, a key price resistance level, as data showed monthly declines in US consumer confidence & new home sales, boosting the precious metal's appeal as a haven investment.  US consumer confidence survey slipped to 117.2 in May from a revised 117.5 in the prior month, according to the Conference Board.  The forecast was to decline slightly to 119.5.  New home sales, meanwhile, fell by nearly 6% in Apr to 863K annual rate, Census Bureau reported.  The forecast called for 959K.  However, the S&P CoreLogic Case-Shiller national house price index showed a rise of 13.2% in the year to Mar for existing homes, the highest annual gain since 2005.  Jun gold rose $13 (0.7%) to settle at $1898 an ounce.  Shortly after the settlement, prices in electronic trading touched a high of $1899.  Based on the most-active contracts, prices marked another settlement at the highest since Jan 7.

Gold settles near key resistance of $1,900 on drop in U.S. consumer confidence

Oil futures posted a modest gain, with US prices holding ground at their highest in about a week, as traders kept an eye on developments in talks aimed at reviving the Iran nuclear deal.  West Texas Intermediate crude for Jul rose pennies to settle at $66.07 a barrel.  Front-month contract prices were up a 3rd session in a row & ending at the highest since May 17.  Front-month Jul Brent tacked on 19¢ at $68.65 a barrel.  Aug Brent crude, the most actively traded contract, added 12¢ at $68.49 a barrel.  Crude finished sharply higher yesterday as doubts emerged over the timing of any agreement that would see the US return to the nuclear deal & lift sanctions against Iran, which would allow the country's crude exports to return to the market.  Secretary of State Antony Blinken yesterday said the US hasn't yet seen whether Iran is “ready and willing to make a decision to do what it has to do” to have sanctions removed.  Despite today's softer tone in the crude oil market, bullish analysts said the market would be likely to take in stride a return of Iranian barrels & continued tapering of production cuts by OPEC & its allies (OPEC+).  The group of producers will hold their next on Jun 1.

Oil prices post a modest gain as traders eye Iran nuclear talks

Stocks continue to plod along, looking for direction.  There is new hope for a revised  infrastructure bill, although that is targeted for Aug (along way off).  The overall economy looks fairly good which should bring significant growth for the full year if sluggish data does not get in the way (as was reported today).  The Dow continues to stay near 34K, unable to make a meaningful advance.

Dow Jones Industrials