Dow rose 98, advancers barely ahead of decliners & NAZ was off 6. The MLP index fluctuated near 91 & the REIT index hardly budged at 480. Junk bond funds experienced selling & Treasuries declined. Oil slid lower, holding above 50, & gold fell 5 to 1863.
AMJ (Alerian MLP index tracking fund)
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After months of trying to force their massive social spending bill onto Pres Biden's desk, congressional Dems are confronting the reality that the effort will drag past
Thanksgiving & collide with other major issues that could put its
passage in doubt. A
major reason for this is that the Congressional Budget Office (CBO) is
likely to take at least a few more days & potentially into next week,
to produce a score for the nearly $2T bill. House
moderates say they won't vote on the bill without enough information
from the CBO on it – it is not clear how much is enough, though they
said they intend to vote on the bill this week. And the Senate cannot
even take up the bill without a CBO score because of its rules under
budget reconciliation, the process Dems are using to circumvent a
GOP filibuster. "Timing of consideration of the [Build Back
Better Act] in the Senate will largely depend on when the House sends us
the bill and when CBO finalizes their scores for all of the committees,
which are needed to complete the ‘Byrd Bath’ process," Senate Majority
Leader Chuck Schumer told Senate Dems. Schumer previously said he wanted the Senate to work on passing the
bill this week, but it is now clear that will be impossible. That means
after the holiday, both chambers will face down a crush of high-stakes
issues that could make or break Biden's presidency, buoy or tank the
economy & potentially keep lawmakers in the Capitol deep into the
holiday season. "I ask that you please keep your schedule
flexible for the remainder of the calendar year. As you can see, we
still have much work to do to close out what will be a very successful
year of legislative accomplishments," Schumer added.
Biden’s spending bill facing hurdles – potentially putting its passage in doubt
Treasury Secretary Janet Yellen claimed that the end of inflation will depend on the pandemic & whether there is a "successful" response to COVID-19 by the Biden administration. In an interview, she was asked whether she is confident that the inflation rate will be back to normal levels by next Nov, prompting her to say the "pandemic has been calling the shots for the economy and for inflation." "If we want to get inflation down, I think continuing to make progress against the pandemic is the most important thing we can do," Yellen said. "I think it's – it's important to realize that the cause of this inflation is the pandemic." After listing many grocery items that are facing skyrocketing prices, including milk, eggs & coffee, as well as gas, she was asked, "When does it get better? When do those spikes abate?" "When the economy recovers enough from COVID that demand patterns – people go back to eating out, traveling more, spending more on services, and the demand for products, for goods begins to go back to normal," Yellen responded. "Labor supply has been impacted by the pandemic. Labor force participation is down. It hasn't recovered." Yellen went on to reiterate that if they are "successful" with the pandemic response then she expects prices to go back to "normal."
Yellen says end of inflation depends on… the pandemic
Pres Biden's China policy, a mix of confrontation & cooperation, will face a stress test
when he meets virtually this evening with Pres Xi Jinping, as
the leaders attempt to build on signs of easing hostility. The bilateral conversation will be their 3rd since Biden took office in Jan & comes as the Chinese leader extends his rule over
the world's most populous nation. The sides set modest expectations &
don't anticipate concrete outcomes. Broadly, Biden & his team
have settled on a strategy of managing the relationship through what
they call "intense diplomacy." "The Biden administration is not
trying to change China through bilateral engagement—we don’t think
that’s realistic," a senior administration official said. "We’re trying
to shape the international environment in a way that is favorable to us
and our allies and partners." Building off a surprise joint declaration in
Glasgow last week pledging cooperation on a transition to cleaner
energy, Biden is expected to seek accord on issues including nuclear
proliferation & health amid the Covid-19 pandemic. The White House
views him as entering the meeting with a strong hand. Earlier in
the day, Biden is scheduled to sign a nearly $1T bipartisan infrastructure bill that he views as essential in keeping up with China's own domestic investments. Xi, meanwhile, is focusing his US strategy on damage control rather
than resetting the relationship, according to the people with knowledge
of Beijing's thinking. Xi's priority is to ensure that the road is
smooth & he is willing to reopen channels of communication with Biden to prevent military conflict, they say.
Biden and Xi Jinping set modest expectations for today's meeting
Traders are twiddling their thumbs ahead of retail sales information which could be affected by the high inlfation numbers. The virtual meeting with China should be a non event.
Dow Jones Industrials
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