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Post by thelivyjr » Tue Jan 26, 2021 1:40 p


"Time to pause? Wall St. grows wary of some stock bubbles"

By Thyagaraju Adinarayan

January 25, 2021

LONDON (Reuters) - Wall Street is abuzz about stock market bubbles as surges in the share prices of some loss-making firms, red-hot public markets and amateur investors chasing stocks at frothy valuations spark fears of a pullback.

A flood of money supply, ultra-low or zero interest rates and COVID-19 vaccine rollouts have sparked a ‘buy everything’ rally, helping world stocks add a whopping $33 trillion in value from their lows of last March.

The euphoria is evident in the small cap Russell 2000 index where its component companies with a negative operating profit outperformed the wider index by nearly 50 percentage points over the last year, a Reuters analysis of Refinitiv data showed.

“Pockets of the market have recently demonstrated investor behavior consistent with bubble-like sentiment,” Goldman Sachs analysts led by David Kostin wrote in a note.

Goldman noted the outperformance of negative earners was still a far cry from the 140 percentage points clocked during the dotcom boom of 1999-2000 and more in line with that of the immediate aftermath of the 2008 financial crisis.

While that might be of some comfort to investors, JPMorgan equity strategist Mislav Matejka expects “hot” areas of financial markets could be subject to bouts of profit taking which could spread to equity indices.

However, he said, those dips could be buying opportunities.

Stock valuations have soared to levels not seen since the early 2000s, but this has not caused investors major concern as interest rates are at record lows backed by pledges to keep them there until a recovery is firmly established.

For examples of these selective bubbles, look at electric vehicle-related stocks - Tesla is up 8-fold and electric vehicle charging equipment maker Blink Charging by 2000% in the last 52 weeks, while an IPO index has surged 200% since last March versus a mere 57% for the benchmark S&P 500 index.

Elevated retail participation has contributed to soaring prices.

Retail broker eToro told Reuters it registered more than 380,000 new users in the first 11 days of 2021.

U.S. videogame retailer GameStop’s 50% jump on Monday, on top of 250% year-to-date, was attributed by traders to short-sellers quickly buying back into the stock to cover potential losses, defined as a short-squeeze, and retail investors piling in to benefit from the surge.

Ninety percent of the respondents in a recent survey by Deutsche Bank said they saw price bubbles in some parts of markets, with a majority expecting Tesla to halve in value by the end of 2021.


However, not all the major banks see bubbles.

“Everyone’s asking us about bubbles... even the frothiest equity indices still lag well behind performance during previous bubbles,” said Robert Buckland, Citi equity strategist.

For example, the S&P trades at 22 times 12-month forward earnings, below the peak of 25 times seen ahead of the dotcom crisis.

Citing premia over rock-bottom bond yields, Citi believes equity markets have a long way to go yet.

At just over 1%, the yield on the Bloomberg Barclays Multiverse index of 10-year government and corporate bonds worldwide is the lowest in the 22-year history of the index - less than half the rate of just two years ago and compared with 6.2% at the height of the dotcom bubble.

A rollback of U.S. Federal Reserve easing is seen as a threat to markets but there is no signal of that yet from the central bank.

“Equity bubbles are not delicate,” Buckland added.

“They don’t burst on the first hint of tightening from central banks."

"They are run-away trains that misallocate capital, reshape the investment industry and end careers."

"They take some stopping.”

What’s more, for all the signs of speculative excess from hedge fund and investor sentiment surveys - cash stashed in money market funds or in household or corporate savings is still far higher than before the pandemic emerged.

“The picture is nuanced – heavy activity in certain stocks and options, but less extreme overall investment flows,” Morgan Stanley’s cross-asset strategist Andrew Sheets told clients.

“Hedge funds appear optimistic, but many businesses and individuals are still keeping cash on the sidelines given the uncertainty.”

Reporting by Thyagaraju Adinarayan; Editing by Kirsten Donovan ... SL1N2K01NM

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Post by thelivyjr » Tue Jan 26, 2021 1:40 p


"Stocks lag, dollar advances on COVID-19 concerns"

By Matt Scuffham

January 25, 2021

NEW YORK (Reuters) - Global stocks lagged and the dollar advanced in volatile markets on Monday, with sentiment hit by increasing COVID-19 cases, delays in vaccine supplies and uncertainty over a $1.9 trillion U.S. stimulus plan.

Equity markets have scaled record highs in recent days on bets vaccines will start to reduce infection rates worldwide and on a stronger U.S. economic recovery under President Joe Biden.

However, investors are wary about towering valuations amid questions over the efficacy of the vaccines in curbing the pandemic and as U.S. lawmakers continue to debate a coronavirus aid package.

“The risk for these markets is that, after a bumper couple of months, investors may start to wonder whether they’re looking a little frothy,” said Craig Erlam, senior market analyst at OANDA Europe.

U.S. stocks were mixed.

The Nasdaq index hit a record high on hopes of bumper earnings later this week from mega-cap technology companies but the Dow Jones Industrial Average index struggled to keep pace.

The Dow Jones Industrial Average fell 36.98 points, or 0.12%, to 30,960, the S&P 500 gained 13.89 points, or 0.36%, to 3,855.36 and the Nasdaq Composite added 92.93 points, or 0.69%, to 13,635.99.

European shares closed at two-week lows as a slump in German business morale underscored the damage from tighter COVID-19 restrictions.

The pan-European STOXX 600 index reversed early gains and finished 0.8% lower.

The German DAX fell 1.7%, France CAC 40 was down 1.6% and the UK’s FTSE 100 declined 0.8%.

The MSCI world equity index, which tracks shares in 49 nations, rose 1.46 points or 0.2%, to 668.15.

All eyes were on Washington, D.C., as U.S. lawmakers agreed that getting COVID-19 vaccines to Americans should be a priority even as they locked horns over the size of the pandemic relief package.

Financial markets have been eyeing a massive package, though disagreements have meant months of indecision in a country suffering more than 175,000 COVID-19 cases a day with millions out of work.

“The immediate question now is when stimulus aid will be approved and how much?” asked Christopher Grisanti, chief equity strategist at MAI Capital Management.

The dollar advanced to a near one-week high against a basket of currencies, as volatility in stock markets around the globe sapped investors’ appetite for riskier currencies.

The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.12 points or 0.1%, to 90.358.

The euro was last down 0.3% at $1.2140

Gold prices pared gains on Monday as the dollar edged higher.

Spot gold prices rose $2.7261 or 0.2%, to $1,855.28 an ounce.

U.S. gold futures settled 0.1% lower at $1,855.20 per ounce.

As global COVID-19 cases inched toward 100 million, with more than 2 million dead, investors digested mixed news on the progress of vaccine roll-outs.

Moderna Inc said it believes its COVID-19 vaccine protects against new variants found in Britain and South Africa.

Moderna shares rose 10.3%.

AstraZeneca is not doing enough to try to resolve a dispute over delayed COVID-19 vaccine deliveries to the European Union, the bloc’s top health official said, as news emerged the drugmaker is also facing supply problems elsewhere.

U.S. investors were also awaiting a busy earnings week, with tech giants Apple Inc, Facebook Inc, Tesla Inc and Microsoft Corp all due to report results.

Sentiment in Asia was boosted by a report that China had surpassed the United States as the largest recipient of foreign direct investment in 2020, with $163 billion in inflows.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 9.21 points or 1.3%.

In commodity markets, Brent crude settled at $55.88 a barrel, up 47 cents or 0.9%.

U.S. crude ended 50 cents, or 1%, higher at $52.77 a barrel.

Reporting by Matt Scuffham; Additional reporting by Devik Jain and Shreyashi Sanyal in Bengaluru; Editing by Marguerita Choy ... SL1N2K02F4

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Post by thelivyjr » Tue Jan 26, 2021 1:40 p


"Capitol rioter Garret Miller says he was following Trump’s orders, apologizes to AOC for threat"

Dan Mangan @_DanMangan

Published Mon, Jan 25 2021

Key Points

* A man charged with invading the Capitol and threatening Rep. Alexandria Ocasio-Cortez said he was effectively following then-President Donald Trump’s orders.

* Garret Miller also apologized to Ocasio-Cortez for writing “Assassinate AOC” in a Twitter post and said he would be willing to testify to Congress or in a trial about the riot.

* Miller, who is being held without bail, is one of dozens of people charged with participating in the riot, which began shortly after Trump urged supporters to pressure Congress to reject Joe Biden’s election.

A Texas man charged with invading the Capitol and threatening Rep. Alexandria Ocasio-Cortez said Monday that he was effectively following then-President Donald Trump’s orders when he joined a mob that stormed Congress on Jan. 6.

Garret Miller also apologized to Ocasio-Cortez, D-N.Y., for writing “Assassinate AOC” in a Twitter post.

He said he would be willing to testify to Congress or in a trial about the riot.

Miller, 34, had on a social media account also threatened a Capitol Police officer who fatally shot a fellow rioter, saying he planned to “hug his neck with a nice rope,” authorities have said.

The Richardson resident’s apology came as a federal judge in Dallas ordered him detained without bail pending trial, after finding he was both a danger to the community and a flight risk, according to the U.S. Attorney’s Office for the Northern District of Texas.

MIller is one of dozens of people charged with participating in the riot, which began shortly after Trump held a rally outside the White House, where he urged supporters to pressure Congress to reject the election of Joe Biden as president.

In a statement released by defense attorney Clinton Broden, Miller said he had been motivated by Trump’s false claims about having been cheated out of reelection by ballot fraud and said, “I am ashamed of my comments.”

“I was in Washington, D.C. on January 6, 2021, because I believed I was following the instructions of former President Trump and he was my president and the commander-in-chief."

"His statements also had me believing the election was stolen from him,” Miller said.

“Nevertheless, I fully recognize Joe Biden is now the President of the United States and that the election is over."

"Donald Trump is no longer president and I would not have any reason to continue to follow his lead.”

“While I never intended to harm Congresswoman Ocasio-Cortez nor harm any members of the Capitol police force, I recognize that my social media posts were completely inappropriate."

"They were made at a time when Donald Trump had me believing that an American election was stolen,” he said.

Miller said: “I want to publicly apologize to Congresswoman Ocasio-Cortez and the Capitol police officers."

"I have always supported law enforcement and I am ashamed by my comments.”

He also said in the statement that he was not armed when he entered the Capitol and stayed in its rotunda.

He said he left Washington and headed back to Texas “immediately after President Trump asked us to go home.”

Miller, who was arrested last Wednesday, said that “until very recently,” he had not been interested in or involved with politics.

“Nevertheless, what Donald Trump had been saying about the election really got to me and I felt I had to support him."

"Still, I recognize that I am solely responsible for my actions and that there are no excuses for what I did,” he added.

“I come from a good and supportive family."

"My parents and brothers do not deserve the pain I have caused them."

"I accept full responsibility for my actions and I am prepared to testify at any trial or Congressional proceeding,” Miller said.

Miller is charged in U.S. District Court in Washington, D.C., with: knowingly entering or remaining in any restricted buildings or grounds without lawful authority; violent entry and disorderly conduct on Capitol grounds; obstructing or impeding any official proceeding; certain acts during civil disorder, and threats in interstate commerce.

Ocasio-Cortez had responded to Miller being charged with threatening her by writing on Twitter, “On one hand you have to laugh, and on the other know that the reason they were this brazen is because they thought they were going to succeed.”

Ocasio-Cortez has said that she feared for her life during the riot and members of Congress were “nearly assassinated.”

“I did not know if I was going to make it to the end of that day alive, and not just in a general sense but also in a very, very specific sense,” she said on an Instagram Live video on Jan. 12, without giving more details.

Trump has been impeached by the House of Representatives for inciting the riot.

He is due to go on trial next month in the Senate, where he faces being banned from ever being president again.

Data also provided by Reuters ... o-aoc.html

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Post by thelivyjr » Thu Jan 28, 2021 1:40 p


"Stocks rise on strong earnings; IMF boosts sentiment"

By Matt Scuffham

January 25, 2021

NEW YORK (Reuters) - Global stocks rose on Tuesday, helped by strong corporate earnings in the United States and Europe, while sentiment was boosted by the International Monetary Fund raising its forecast for global growth in 2021.

Wall Street’s main indexes all rose.

Impressive results from a slew of companies, including General Electric and Johnson & Johnson, pushed the S&P 500 to a record high.

By 2:41 p.m. ET, the Dow Jones Industrial Average rose 33.43 points, or 0.11%, to 30,993.43, the S&P 500 gained 2.15 points, or 0.06%, to 3,857.51 and the Nasdaq Composite added 19.79 points, or 0.15%, to 13,655.78.

European stocks also advanced, shrugging off political upheaval in Italy, as strong earnings from wealth manager UBS and auto parts maker Autoliv added to a string of upbeat corporate updates.

The pan-European STOXX 600 index closed up 0.6%, with a rally in automakers, industrial companies and SAP helping the German DAX outperform.

Europe’s broad FTSEurofirst 300 index added 0.64 percent at 1,573.47.

The IMF raised its forecast for global economic growth in 2021 and said the coronavirus-triggered downturn in 2020 would be nearly a full percentage point less severe than expected.

Italy’s FTSE MIB rose 1.2% after Prime Minister Giuseppe Conte handed in his resignation to the head of state, hoping he would be given an opportunity to put together a new coalition and rebuild his parliamentary majority.

The MSCI world equity index, which tracks shares in 49 nations, fell 1.06 points, or 0.16 percent to 667.02.

After a “buy everything” rally over several months supported by money-printing pandemic stimulus packages, near-zero interest rates and the start of COVID-19 vaccination programs, some investors are worried markets may be near “bubble” territory.

They point to rocketing prices of assets such as bitcoin or, on Monday, the soaring stock of short-squeezed videogame retailer Gamestop.

“There is room for some consolidation,” said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners.

Investors were watching as the Federal Reserve kicked off its two-day policy meeting.

“Investors don’t expect the Fed to give any reason to think they are getting closer to talking about when they will consider scaling back QE, but nervousness is brewing on Wall Street,” said Edward Moya, senior market analyst at OANDA in New York.

Mounting coronavirus cases and uncertainty over the timing and size of fiscal stimulus also tempered sentiment.

Disagreements have meant months of indecision in the United States, where new cases have been above 175,000 a day and millions of people are out of work.

Democrats in the U.S. Senate will act alone to approve a fresh round of stimulus if Republicans do not support the measure, Majority Leader Chuck Schumer said.

U.S. Treasury yields were narrowly mixed in choppy trading, after hitting three-week lows on the long end of the curve, as investors remained cautious about the size of a U.S. stimulus package and the slow global roll-out of coronavirus vaccines.

Benchmark 10-year notes last fell 1/32 in price to yield 1.0414%, from 1.04% late on Monday.

The dollar index, which tracks the greenback versus a basket of six currencies, fell 0.226 points, or 0.25 percent, to 90.165.

MSCI’s broadest index of Asia-Pacific shares outside Japan fell 11.47 points or 1.58% in Asia overnight.

South Korea and Hong Kong topped losers, each falling more than 2%.

The sell-off also caused Japanese stocks to slip 1% and Chinese blue-chips to tumble 2%, their biggest one-day loss since Sept. 9.

All had touched milestone highs earlier this month.

Gold prices edged lower.

Spot gold fell $-5.4215, or -0.29 percent, to $1,849.57 an ounce.

U.S. gold futures settled down 0.2% at $1,850.90.

U.S. crude oil futures settled at $52.61 a barrel, down 16 cents or 0.30%.

Brent crude futures settled at $55.91 a barrel, up 3 cents or 0.05%.

Reporting by Matt Scuffham; Editing by Dan Grebler/Mark Heinrich ... SL1N2K12BY

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Post by thelivyjr » Thu Jan 28, 2021 1:40 p


"TREASURIES-U.S. yields mixed as caution on stimulus package persists"

By Gertrude Chavez-Dreyfuss

January 26, 2021

* U.S. yield curve steepens modestly

* Near term, 10-year yield likely between 1.75%-2%-BofA

* U.S. 5-year note auction shows mixed results

NEW YORK, Jan 26 (Reuters) - U.S. Treasury yields were narrowly mixed in choppy trading on Tuesday, after hitting three-week lows on the long end of the curve, as investors remained cautious about the size of a proposed U.S. stimulus package and the slow global roll-out of coronavirus vaccines.

The U.S yield curve steepened modestly after flattening on Monday.

The spread between U.S. two-year and 10-year yields widened slightly to 91.30 basis points.

U.S. Senate Majority Leader Chuck Schumer said late Monday he and his fellow Democrats may try to pass much of President Joe Biden's $1.9 trillion coronavirus relief bill using a process that would bypass a Republican filibuster and could allow it to pass with a majority vote.

Mike Chang, interest rates strategist at Citi in New York, said his firm believes the stimulus package would be much smaller, around $600 billion to $1 trillion.

"Timing is another issue, not just the size - how long it will take to get the whole thing through," he added.

In addition, there have been coronavirus vaccine delivery problems globally, especially in Europe.

For instance, AstraZeneca, which developed its vaccine with Oxford University, told the European Union that it could not meet agreed supply targets by the end of March.

In early afternoon trading, the benchmark 10-year yield slipped to 1.036%, from 1.04% late on Monday.

It earlier slid to 1.026%, its lowest since Jan. 6.

"We are clearly in the early expansion phase of the cycle," said BoFA Securities in a note on Tuesday.

"With the (Federal Reserve) squarely on hold, the expectation is for a bear-steepening dynamic for the curve."

"The bearish momentum at the back-end of the curve is supported by improved fundamentals, while the front-end continues to be anchored by the Fed."

In the early stage of the cycle, the bank said the 10-year yield is likely to trade in a range of 1.75-2%, while the two-year/10-year yield curve could widen to 150 basis points.

U.S. 30-year yields were up at 1.801% from Monday's 1.799%, after earlier dropping to a three-week low of 1.786%.

On the front end of the curve, U.S. two-year yields slipped to 0.123% from 0.127% on Monday.

Also on Tuesday, the Treasury auctioned a record $61 billion in 5-year notes, with mixed results.

A high yield of 0.424% - slightly lower than the "when-issued" or consensus forecast of 0.427% - suggested that investors were willing to buy the paper even at a lower yield than the consensus estimate.

But the bid-to-cover ratio was 2.34, below last month's 2.39 and the 2.47 average, and the weakest since July largely due to the increased issue volume, Action Economics said in its blog after the auction.

Post-auction, U.S. five-year note yields were slightly down at 0.408%.

The Federal Reserve began its two-day policy gathering on Tuesday and will announce the results of its meeting on Wednesday.

Analysts expect the Fed to stick to its dovish tone amid a persistent surge in virus cases. ... SL1N2K12E4

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Post by thelivyjr » Thu Jan 28, 2021 1:40 p


"Oil Prices Mixed Amid Fledgling Recovery"

by Bloomberg | Andres Guerra Luz

Tuesday, January 26, 2021

(Bloomberg) -- Oil edged lower as the worsening near-term coronavirus outlook raised concerns over the obstacles still facing crude’s fledgling recovery.

Futures in New York fell less than 1% Tuesday after flipping between gains and losses earlier in the session.

While much of the world awaits a wider distribution of the vaccine, oil prices have struggled to sustain their rally.

In China, a coronavirus flare-up is threatening fuel demand during the Lunar New Year period, with the government encouraging millions not to travel.

“There’s a lot of demand destruction-type events in the market, and it’s weighing on crude,” said Bob Yawger, head of the futures division at Mizuho Securities.

The market is “giving the impression we’re running out of momentum here.”

Oil has surged almost 50% since the end of October, but the rally has started to falter with obstacles still facing the recovery in global fuel demand.

Vaccine coverage won’t reach a point where it will stop the transmission of the virus in the foreseeable future, the World Health Organization said on Monday.

Meanwhile, the U.K. exceeded 100,000 Covid deaths, serving as a stark reminder of the long road ahead before countries emerge from the pandemic.

“The fundamental oil picture is firmer for mid-year, but it’s not really that tight” compared to other years, said Rick Joswick, head of oil pricing analytics at S&P Global Platts.

The risk that shale producers may eventually increase production also “puts a cap on the back-end of the forward price curve.”


West Texas Intermediate for March delivery fell 16 cents to settle at $52.61 a barrel.

Brent for March settlement rose 3 cents to end the session at $55.91 a barrel.

Despite the day-to-day fluctuations in headline crude prices, the market’s structure has been firming.

Brent’s prompt timespread was 27 cents a barrel in backwardation on Tuesday, where near-dated contracts are more expensive than later-dated ones.

The spread is at the strongest level since late February.

About 1.7 billion trips are expected across China over the Lunar New Year period, down 40% from 2019, although 15% higher than last year.

The travel rush, which starts on Jan. 28 this year, runs for 40 days and is normally the biggest mass movement of people around the globe as hundred of millions of Chinese jump on planes, trains and automobiles to see their extended families.

In the U.S., analysts expect crude inventories to have risen last week, according to a Bloomberg survey.

The industry-funded American Petroleum Institute will report its figures later Tuesday ahead of a U.S. government tally on Wednesday.

Other oil-market news:

Big Oil suffered a fresh setback after one of the most influential rating companies warned it may cut the credit score of Exxon Mobil Corp., Royal Dutch Shell Plc and a plethora of other major energy companies due to “greater industry risk” associated with climate change.

Libya’s oil production recovered to around 1.25 million barrels a day after a major pipeline was fixed, while efforts continued to end a strike that could halt exports at three of the OPEC country’s ports.

The U.S. is trying to seize around 2 million barrels of what it thinks is Iranian oil, according to people familiar with the matter, in Washington’s latest attempt to block the Islamic Republic’s energy exports.

Energy Transfer LP’s infamous Dakota Access oil pipeline suffered another blow Tuesday when a judge upheld a decision to scrap a key permit, threatening a system that has already been up and running for more than three years.

--With assistance from Grant Smith. ... 1-article/

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Post by thelivyjr » Thu Jan 28, 2021 1:40 p


"Schumer Wants Biden to Bypass Congress on Climate"

by Bloomberg | Ari Natter & Jennifer A. Dlouhy

Tuesday, January 26, 2021

(Bloomberg) -- Senate Majority Leader Chuck Schumer called for President Joe Biden to declare a climate emergency, a controversial move that would give the new administration sweeping authority to circumvent Congress to combat global warming.

Declaring a climate emergency could unlock new powers for Biden, including the ability to redirect funding for clean energy projects, shut down crude oil exports, suspend offshore drilling and curtail the movement of fossil fuels on pipelines, trains, and ships.

Former President Donald Trump used the tactic in February 2019 to divert billions of dollars to start construction on the wall along the southern border after Congress refused to appropriate the funding.

“Now, Trump used this emergency for a stupid wall, which wasn’t an emergency,” Schumer said in an interview with MSNBC’s Rachel Maddow that aired on Monday night.

“But if there ever was an emergency climate is one."

"So I would suggest that they explore looking at climate as an emergency, which would give them more flexibility.”

Any such move would almost certainly face court challenges -- just as Trump’s wall funding maneuver did.

In July 2019, the Supreme Court cleared his administration’s plan to use disputed Pentagon funds to construct more than 100 miles of fencing along the Mexican border.

Schumer also said he thought his party could advance major parts of a climate agenda -- even a ban on conventional, gas-powered cars -- through budget reconciliation, a process that allows easier passage of some tax and spending legislation on a simple majority vote.

Republicans used the process in 2017 to mandate the sale of Arctic drilling rights.

The Senate is now divided 50-50, with Vice President Kamala Harris giving the Democrats a tie-breaking vote.

That makes it difficult to enact sweeping new programs through traditional legislation.

On most major bills, Democratic leaders will have to navigate around moderates in their own party -- including Senator Joe Manchin of coal-rich West Virginia -- and lure 60 votes including some Republicans to overcome a filibuster.

Schumer emphasized that Democrats could use reconciliation to enact a ban on the manufacture of internal combustion engines powered by oil- and plant-based fuels.

He has previously said that if Democrats won control of the Senate he would put an ambitious $454 billion plan on the floor to remove gas-powered vehicles from American roads by 2040.

Biden has vowed to decarbonize the electricity sector by 2035 as part of his goal to reach zero net emissions by 2050, though many elements of his plan would require Congress to act.

The White House had no immediate comment on Schumer’s suggestion of declaring a climate emergency.

But a White House official said the president understands the magnitude of the climate crisis and cited his climate proposal calling for a whole-of-government approach.

Opponents of declaring an emergency have warned it could radicalize climate protection and alienate moderate Democrats whose support is needed to pass other major legislation, such as infrastructure spending, that could contain climate-related provisions.

Still, some environmentalists were heartened by the New York Democrat’s idea.

“Declaring a national emergency isn’t just symbolic,” said Brett Hartl, government affairs director at the Center for Biological Diversity.

“It unlocks additional powers to take on the climate crisis, and we can’t afford to wait any longer to muster the full powers of the federal government to combat this existential crisis.”

--With assistance from Steven T. Dennis and Mario Parker. ... 5-article/

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Post by thelivyjr » Thu Jan 28, 2021 1:40 p


"Oil Rises As Physical Market Tightens"

By Tsvetana Paraskova

Jan 26, 2021, 10:45 AM CST

Oil prices rose early on Tuesday amid signs that the physical supply of crude will tighten over the first quarter and counter concerns about slow vaccine rollouts and Chinese lockdowns.

As of 10:14 a.m. ET on Tuesday, WTI Crude prices were trading up 0.23 percent at $52.90, and Brent Crude was up 0.30 percent at $56.13.

Oil prices largely shrugged reports of an explosion in Riyadh, the capital of the world’s top oil exporter, Saudi Arabia.

The cause for the blast, which occurred around 1 p.m. local time, or 10 a.m. GMT, was not immediately known.

Lower oil exports from Russia and Iraq next month, as well as the Saudi extra cut of 1 million bpd for February and March is giving market participants hope that the physical market is tightening at a time when the immediate prospects for global oil demand are not bullish.

According to Bloomberg, the seaborne crude oil exports of Russia’s flagship Urals grade are set to decline by nearly 20 percent next month compared to this month.

Moreover, Iraq, OPEC’s second-largest producer after Saudi Arabia, has pledged to pump less oil this month and next to make up for excess production last year.

For both January and February, Iraq plans average daily output of 3.6 million barrels, Ali Nizar, the deputy chief of SOMO, the oil marketing company of Baghdad, told Bloomberg in an interview.

This would compare with 3.85 million bpd for December.

Iraq’s crude oil exports will also fall, to some 3 million bpd from 3.3 million bpd for December, as long as the Kurdistan Regional Government agrees to cut its oil output as well, Nizar said.

“A flare-up in virus cases in China is threatening fuel demand during the upcoming Lunar New Year period while the market also fret a potential delay of the US stimulus package,” Saxo Bank said early on Tuesday.

“The physical market meanwhile continues to tighten supported by lower February shipments from Iraq and Russia on top of the planned cuts from Saudi Arabia."

"As a result, the front month Brent spread is signaling the tightest market conditions in a year,” Saxo Bank’s strategy team noted.

By Tsvetana Paraskova for ... htens.html

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Post by thelivyjr » Thu Jan 28, 2021 1:40 p


"Fed will need to reassure the market it’s not thinking about dialing back its support"

Jeff Cox @jeff.cox.7528 @JeffCoxCNBCcom

Published Tue, Jan 26 2021

Key Points

* The Federal Reserve concludes its two-day policy meeting Wednesday.

* One big issue for the markets is the prospects for “tapering,” or reducing asset purchases.

* Investors will look to Chairman Jerome Powell for clarity at his post-meeting news conference.

* Most market participants expect little change from the Fed’s position, despite some inflation pressures cropping up.

Federal Reserve Chairman Jerome Powell has a few nerves to quell among market participants wondering when the central banks will start tapping the brakes on all the help it’s been providing.

The big buzzword surrounding the Fed now is “tapering.”

It’s a reference to pulling back on the monthly bond purchases that have helped keep the financial system flush with cash and have encouraged investors to continue to take on risk despite stock market valuations that are their highest since at least the dotcom bubble of the early 21st century.

Markets figure that as long as the Fed keeps pumping, then it’s safe to keep buying.

Powell and other central bank officials say they’re committed to keeping the bond purchases going — and short-term borrowing rates anchored near zero — until the economy shows that it’s strong enough to run on its own.

One key element to that is inflation, which the Fed wants to run consistently around a 2% level that it’s missed for most of the last decade.

Should inflation heat up, however, it eventually will force the Fed to tighten its policy.

Part of that tightening would include reducing the $120 billion-plus pace of asset purchases – hence, the “taper” talk, and, more specifically, worries over a “taper tantrum.”

The market experienced just such a reaction back in 2013, when former Fed Chairman Ben Bernanke first raised the idea for the program that was happening then.

Powell will be looked at Wednesday to provide reassurance that the Fed isn’t contemplating a taper, even with some inflation pressures starting to build in the system.

Most Fed watchers are expecting him to do just that.

“Powell is very good at accentuating the negative i.e. ‘We’re not even thinking about thinking about raising interest rates,’” said Vincent Reinhart, chief economist at Mellon, repeating Powell’s pledge in June.

“He’ll push back, presumably hard, about the notion that they have any near-term idea about tapering, and that will be the negative,” he said.

The market, though, likely will take that as a positive.

Investors have ridden a Fed liquidity river since late-March 2020 to push the stock market up about 72% as measured by the S&P 500, despite the death grip of the Covid-19 pandemic and the damage it has caused to parts of the economy.

One key has been an accommodative Fed that now has said it will allow the economy to run hotter than it would have historically, in the interest of achieving “inclusive” economic benefits.

Powell will be looked at to continue that kind of talk.

“The personal dynamic is what’s going to be interesting, how hard he pushes back against tapering,” Reinhart said.

“He was there during the taper tantrum, and the message he always gives is you’re supposed to listen to the chair."

"He’s got to make that pretty clear.”

The rise of inflation fears

There have been a few factors that have incited the tapering question.

One goes back to Reinhart’s statement about listening to the chair.

While Powell has been clear about keeping policy accommodative, some of the regional presidents have been expressing concern that inflation could rise up sooner than expected and force a change in policy as soon as this year.

Others have been market indicators themselves.

One popular benchmark, the 5-year breakeven, is projecting inflation to rise to 2.15%, tied for the highest it’s been in almost eight years.

(The breakeven compares 5-year Treasury yield to TIPS of the same duration.)

There also are clear price pressures building in the economy.

The Case-Shiller home price index released Tuesday showed an increase of 9.5%, one of the biggest monthly gains in history.

And there’s always asset price inflation, which besides the stock market has included the meteoric rise of bitcoin.

Copper, a traditional economic yardstick, is up more than 32% over the past year and nearly 3% in January alone.

On top of that, there already is more than $3 trillion of stimulus coursing through the U.S. economy, with President Joe Biden wanting to add $1.9 trillion soon and untold amounts later in infrastructure and other spending.

Still, Powell is likely to shake off those indicators and focus on a more macro-based look.

What could change

“While a fiscal boost means the economy should run faster, it still needs to cover a lot of distance towards its goals before any adjustments take place, and the Fed will adopt a posture of strategic patience to allow these improvements – particularly in inflation expectations – to unfold,” wrote Krishna Guha, head of global policy and central bank strategy at Evercore ISI.

The chairman also has been clear about wanting to give the markets plenty of notice about when tapering will begin, which Guha thinks won’t happen until 2022 and then take a year before the Fed stops growing its $7.5 trillion balance sheet.

Consequently, the post-meeting statement likely will see little change, while Powell, at his news conference afterwards, will keep the message simple.

“We expect no substantive changes in the post-meeting statement,” wrote Citigroup economist Andrew Hollenhorst.

“Later this year, the statement may be substantially revised to reflect an improving public health outlook, which would involve changing or removing the sections of text related to downside risk related to COVID-19.”

That means more zero interest rates and more bond buying, despite what future indicators are saying now.

“The market has been on a veritable treasure hunt to find anything that suggests the Fed is thinking of actually moving,” said Quincy Krosby, chief market strategist at Prudential Financial.

“Why would he deviate now from what he’s been saying?”

Data also provided by Reuters ... pport.html

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Post by thelivyjr » Thu Jan 28, 2021 1:40 p


"Treasury yields rise slightly after Yellen’s confirmation as Treasury secretary"

Maggie Fitzgerald @mkmfitzgerald Vicky McKeever @vmckeevercnbc

Published Tue, Jan 26 2021

Key Points

* Former Federal Reserve Chair Janet Yellen was confirmed as Treasury secretary on Monday evening.

* Treasury yields rose slightly on Tuesday, despite concerns about the potential opposition in Congress to President Joe Biden’s proposed $1.9 trillion stimulus package.

U.S. Treasury yields edged slightly higher on Tuesday morning, after former Federal Reserve Chair Janet Yellen was confirmed as Treasury secretary on Monday evening.

The yield on the benchmark 10-year Treasury note rose to 1.048% at 4:00 p.m. ET, while the yield on the 30-year Treasury bond advanced to 1.807%.

Yields move inversely to prices.

Treasury yields rose slightly on Tuesday, despite concerns about the potential opposition in Congress to President Joe Biden’s proposed $1.9 trillion stimulus package.

Traders will be watching for the International Monetary Fund’s world economic outlook, which is published twice a year and is due out at 8 a.m. ET.

Home prices rose 9.5% nationally in November year-over-year, the strongest annual pace in more than six years, according to S&P CoreLogic Case-Shiller Home Price Indices.

Weekly API stock change data for crude oil is then due out at 4:30 p.m. ET.

Auctions will be held Tuesday for $34 billion of 52-week bills, $30 billion of 119-day bills, $30 billion of 42-day bills and $61 billion of 5-year notes.

Data also provided by Reuters ... ation.html

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