Dow shot up 447 to another record, advancers over decliners about 4-1 & NAZ gained 142. The MLP index rose 3+ to the 195s & the REIT index jumped 7+ to 460 (close to record highs). Junk bond funds were bid higher & Treasuries continued to be sold today. Oil added 1+ to the 74s & gold went up 11 to 1811 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Shortages of materials & "difficulties in hiring" are holding back the US economic recovery from the coronavirus pandemic and have driven a "transitory" bout of inflation, the Federal Reserve said. "Progress on vaccinations has led to a reopening of the economy and strong economic growth," the central bank said in its semiannual report to Congress on the state of the economy. However, "shortages of material inputs and difficulties in hiring have held down activity in a number of industries." The
report will be the subject of hearings in Congress next week, including
testimony from Fed Chair Jerome Powell about the outlook for the
economy, inflation, & the transition of monetary policy as the impact of the pandemic recedes. The
report released is largely backward-looking, but
it documents the central bank's view that the recovery remains on track
as firms & families navigate a complicated economic reopening. Prices
have risen faster than expected, for example, & while the supply
bottlenecks & other factors driving the price hikes are expected to
ease over time, "upside risks to the inflation outlook in the near term
have increased," the Fed said. Hiring
has also slowed for an unexpected reason: Companies want to bring on
more employees, but not enough workers are ready to take those jobs as they cope with ongoing health & family concerns & can rely on continued federal unemployment benefits to help pay the bills. "Many of these factors should have a diminishing effect on
participation in the coming months," the Fed said, though the speed &
strength of that labor market recovery also remains uncertain. The central bank, however, said available data suggest "a further robust increase in demand" occurred from Apr thru Jun. "Against
a backdrop of elevated household savings, accommodative financial
conditions, ongoing fiscal support, and the reopening of the economy,
the strength in household spending has persisted," while the financial
system remains "resilient," the Fed added.
Fed says shortages of materials, hiring problems holding back recovery
Senate Majority Leader Chuck Schumer said that Dems may work into Aug in order to pass both a bipartisan infrastructure package & a separate reconciliation bill that would dramatically expand the gov-funded safety net. In a letter to his Dem colleagues, Schumer reaffirmed his support for the 2-track approach to Pres Biden's "Build Back Better"
economic agenda & said the Senate Budget Committee is working to turn a
$1.2T bipartisan framework into legislation. The
committee is simultaneously creating a 2nd package that would
include provisions on combating climate change, expanding health care & bolstering care for elderly & disabled Americans & would be
funded by drastically raising taxes on the wealthy & corps. He said his plan is for the Senate to consider the
bipartisan infrastructure package & a budget resolution that could be
passed using the procedural tool known as reconciliation, which would
allow Dems to bypass a 60-vote filibuster by Reps. The party
used the method earlier this year to muscle thru the $1.9T
American Rescue Plan without any GOP votes. "Please be advised
that time is of the essence and we have a lot of work to do," Schumer
wrote. "Senators should be prepared for the possibility of working long
nights, weekends, and remaining in Washington into the
previously-scheduled August state work period." Both houses of
Congress are out of town for the Fourth of July recess. The Senate is
slated to return next week, giving it just a few weeks to
complete the herculean task before Aug recess begins. With their
incredibly slim majorities in the House & Senate, Dems face a
delicate balancing act in pursuing both a bipartisan deal & a larger
bill that could cost several T $s. Dem leaders, who
need to ensure that both measures receive the support of moderate &
progressive members in order to pass, have indicated they will make the
passage of the smaller bill contingent on the success of a larger bill.
Schumer says Senate may work into August to pass infrastructure plan, reconciliation bill
Gold futures booked a gain for the session, helping the commodity mark its 3rd straight weekly advance, as choppiness in stocks, a tepid $ & rapidly receding yields proved a bullish cocktail for bullion in a holiday-shortened week. The precious metal's moves come as trade in the $ have been subdued, with the buck down 0.2% today & off slightly to flat for the week, as gauged by the ICE U.S. Dollar Index. Aug gold traded $10 (0.6%) higher to settle at $1810 an ounce, with a weekly advance of 1.5%. The weekly gain was the metal's 3rd in a row & the sharpest since May 21 underscoring an uptrend taking hold in the yellow metal. Long-dated Treasury yields, the & 30-year Treasuries, which touched their lowest levels since Feb, have been a part of the upbeat narrative for the yellow metal. Lingering concerns about the economic outlook, amid the spread of COVID-19’s delta variant & lofty valuations in equities have helped to buttress values for precious metals. The positive finish for gold on Fri came even amid a rebound in the Dow, the S&P 5 & the NAZ which all registered their worst day in 3 weeks yesterday, but were rebounding impressively to end the week. Doubts about the Federal Reserve’s monetary-policy strategy, including scaling back its $120B-a-month asset-purchase program, also have influenced trading in gold & other precious metals.
Gold settles up Friday, marks sharpest weekly rise in 7 weeks, despite stock market rebound
Oil futures ended sharply higher, continuing a bounce began the previous session after a sharp fall in US crude & gasoline inventories, but were unable to fully erase a weekly loss as a spat between key OPEC members remained unresolved & worries mounted over the spread of the delta variant of the coronavirus that may slow energy demand in some countries. West Texas Intermediate (WTI) crude for Aug rose $1.62 (2.2%) to end at $74.56 a barrel a barrel. Sep Brent crude, the global benchmark, gained $1.43 (1.9%) to finish at $75.55a barrel. WTI & Brent futures each suffered a 0.8% weekly decline. Crude maintained gains in the PM after oil-field-services company Baker Hughes said the number of US oil rigs rose by 2 from last week to 378 & natural-gas rigs rose by 2 to 101.
Oil ends sharply higher, trimming weekly drop as OPEC worries linger
Today was a strong rebound for stocks after yesterday's major decline. After hovering near records highs for weeks, while the other popular indices were setting new record, the Dow closed at a new record. It's close to 35K & the bulls will be looking to take it over that milestone on Mon.
Dow Jones Industrials
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