Dow tumbled 599, decliners over advancers about 6-1 & NAZ lost 78. The MLP index retreated 3+ to the 181s & the REIT index went up 5+ tgo the 529s. Junk bond funds declined & Treasuries were sold, raising yields. Oil slid lower in the 65s & gold was off 7 to 1830.
AMJ (Alerian MLP index tracking fund)
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Senate Minority Leader Mitch McConnell suggested that he would support an infrastructure
package that costs as much as $800B, a price tag that's higher
than the existing counteroffer from his fellow GOP lawmakers. McConnell reiterated his opposition to the $2.3T tax & spending proposal put forward by Pres Biden earlier this year. That measure, known as the American Jobs Plan,
includes Bs in new funding for traditional infrastructure needs
such as roads, bridges, transit systems & broadband, but also
allocates money to issues such as long-term care for the elderly &
disabled. McConnell
said any package should focus solely on "traditional" infrastructure,
including roads, ports, bridges, water lines & broadband. "The
proper price tag for what most of us think of as infrastructure is
about 6 to $800 billion," he continued, adding: "What we've got here is what
can best be described as a bait and switch." McConnell's
comments precede a set of White House meetings this week – tomorrow
with congressional leaders & Thurs with key Reps – as Biden
seeks to find a middle ground with GOP lawmakers on his sweeping
infrastructure plan. A group of moderate Senate Reps
introduced a scaled-back $568B proposal last month, an opening
salvo in the long-shot bid to compromise on infrastructure. The 4-year plan from Sens Shelley Moore Capito, Roger Wicker, Pat Toomey & John Barrasso focused on roads, bridges & other traditional forms
of infrastructure.
McConnell says $800B infrastructure package would be acceptable
The US economy is trying to restart its engine after tumbling into its deepest recession in generations, but a variety of supply chain constraints are threatening the country's rebound. The country faces major shortages in everything from labor to semiconductors, lumber & packaging materials. Not even swimming pools can be counted on this summer with the US running low on chlorine. The scarcity left & right is not only preventing the economy from reaching its full potential, but it's also raising fears of higher inflation as companies are forced to hike prices amid the low supply. The labor force participation rate remains well below pre-pandemic levels as many Americans have yet to go back to work. This is partly due to generous unemployment benefits & childcare duty. Meanwhile, manufacturers are struggling to catch up with a jolt in demand amid supply crunches in components & raw materials. This has stalled the rebound across broad swaths of the economy from housing to services, tech, autos & leisure. While the labor market is ready to snap back, there appears to be a lack of available workers to keep powering the grand recovery. Hiring was a huge letdown in Apr, with nonfarm payrolls increasing by just 266K, compared to the estimate of 1M jobs. Companies are struggling to hire workers at a time when Covid infection risk persists. Federal jobless benefits, as well as child care obligations with many schools still closed, could be preventing many Americans from re-entering the labor force.
As the U.S. economy restarts from the pandemic, parts of it are severely broken
The rate of new Covid cases in the US fell to an average of 39K per day yesterday, according to Johns Hopkins University, the first time daily case counts have been below 40K since Sep. It is down 22% from a week ago & 46% from the most recent high, when the country was seeing about 71K daily cases in mid-Apr. Federal data found the country is averaging 2.1M daily reported vaccinations over the past week, down 37% from its peak level but showing signs of steadying in recent days. Average daily cases are at their lowest level since Sep 15. Case counts have declined by 5% or more over the past week in 41 states & DC. Outbreaks continue to grow elsewhere in the world, particularly in India, which has reported an average of 387K new cases per day over the past week. The latest 7-day average of daily Covid deaths in the US is 635, according to Hopkins data. The US is averaging 2.1M reported vaccinations per day over the past week, according to Centers for Disease Control & Prevention data. The daily pace is down significantly from its high point of 3.4M shots per day in Apr but has shown signs of steadying in recent days, with the 7-day average bouncing between 1.9M & 2.2M for a week. About 35% of the US population are fully vaccinated, according to the CDC, & 46% have received one shot or more.
Average daily U.S. Covid cases below 40,000 for the first time since September
There is massive selling today. OK, the Dow is very oversold as shown in the chart below. It's up 10% in the last 2 months (not a bad run for an entire year). The bulls are in hiding while investors take profits. May has a reputation for not being a good month in the stock market. However with a little buying in recent minutes, the Dow is still up 400 in May.
Dow Jones Industrials
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