Dow sank 492, decliners over advancers better than 5-1 & NAZ dropped 209. The MLP index fell 1+ to the 191s & the REIT index was off 1 to the 452s. Junk bond funds were flattish & Treasuries continued to be heavily purchased, taking the yield on the 10 year Treasury down a big 5 basis points to 1.27% (not seen since Feb). Oil fell to the 71s & gold rose 3 to 1805.
AMJ (Alerian MLP index tracking fund)
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The number of Americans filing for first-time unemployment benefits last week unexpectedly rose off the lowest levels since the outbreak of the COVID-19 pandemic. Data showed 373K Americans filed for first-time jobless benefits last week, up from an upwardly revised 371K filings the week prior. The forecast expected a decline to 350K filings. Despite last week's small increase the number of initial jobless claims have been more than halved this year after reaching a peak of 904K in Jan. Almost 6M people filed jobless claims in late Mar 2020 as lockdowns were put in place to slow the spread of COVID-19. The number of jobless claims is expected to fall further in the weeks ahead as 26 states have already ended or announced the end of the $300 per week in supplemental benefits. The benefits will run out for the remaining states in Sep. Continuing claims for the latest week fell to 3.34M filings from the previous week's upwardly revised 3.5M. The forecast expected a decline to 3.34M filings.
Initial jobless claims unexpectedly rise off pandemic lows
The total number of quits declined to 3.6M, according to the
Labor Dept's Job Openings & Labor Turnover Survey (JOLTS). 4M workers quit their jobs in Apr. Total separations fell to
5.3M, a drop of 485K from the prior month. Quits
decreased across a number of industries with the biggest declines
occurring in professional & business services (-181K);
transportation, warehousing & utilities (-46K) & durable goods
manufacturing (-25K). The Northeast & South regions saw a drop
in the number of quits. This
comes as the number of job openings held little changed at 9.2M.
Openings hit a record high of 9.3M in Apr. The job openings rate was unchanged at 6%. Job
openings grew in other services (+109K), state & local gov
education (+46K) & educational services (+35K). There was a drop
in the number of job openings in arts, entertainment & recreation
(-80K); state & local gov, excluding education (-56K) & federal gov (-17K).
Pace of workers quitting falls from record high
As the highly transmissible delta variant continues to spread rapidly across the US & elsewhere around the world, scientists & other health experts are warning that indoor mask mandates & other public health measures will likely make a return in this US this fall. The country, which just celebrated the Fourth of July with some of its first large gatherings in more than a year, is headed toward a “dangerous” fall season when delta is expected to cause another surge in new cases, health experts say. Already the dominant variant in the US, delta will hit the states with the lowest vaccination rates the hardest — unless those states & businesses reintroduce mask rules, capacity limits & other public health measures that they've largely rolled back in recent months, experts say. With new mutations discovered every few weeks, many scientists now predict that Covid will continue circulating around the world for at least the next 2-3 years, requiring nations to reinstitute public health measures on an ad hoc basis for the foreseeable future. Authorities in Australia, South Africa and& Asia have recently reintroduced curfews or other measures to curb rising delta outbreaks. Japan just declared a coronavirus state of emergency in Tokyo & banned spectators at the Olympics. High vaccination rates in the US & the warm summer months have bought the country some extra time, but outbreaks across the world are giving Americans a preview of what may come this fall. The warning from scientists & other health experts comes as many businesses & offices across the US have largely done away with their mask requirements, social distancing & other pandemic-related restrictions.
U.S. heading for ‘dangerous fall’ with surge in delta Covid cases and return of indoor mask mandates
Including today's selling, the Dow is still up a massive 12% YTD! That qualifies as vastly overbought. Selling is in order even though the economy is doing well. Those guys at the Fed are thinking about increasing interest rates & reducing their bond buying program. The virus is still active & fighting back, mentioned yesterday. As a result gold & especially Treasuries are in heavy demand. Over 2+ months, the Dow has been largely going sideways, although staying close to its record highs.
Dow Jones Industrials
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