Dow climbed 216, advancers over decliners better than 3-1 & NAZ went up 69.  The MLP index added 2+ to the 229s & the REIT index went up 4+ to the 396s as yields declined.  Junk bond funds rose along with the stock market & Treasuries saw heavy purchases of bonds, sharply reducing yields.  Oil was up 1 to the 78s & gold jumped 21 to 1900 (more on both below).

AMJ (Alerian MLP Index tracking fund)

Unprecedented government Debt Limit close to maxing out

The number of new applications for unemployment benefits slightly rose to 205K last week, the Labor Dept reported.  Low jobless claims are a sign the labor market is remaining resilient despite the Federal Reserve's historic effort to tighten monetary policy to slow economywide spending & drive down inflation.  The weekly jobless claims number has been closely watched over the past year or so, given the Fed’s aggressive pace of rate hikes.  The report comes after the central bank raised rates by ½ of a percentage point in Dec & is likely to increase the rate again at the end of this month.  For a stretch in the late summer, jobless claims defied expectations & remained low, even despite the Fed's aggressive rate hikes.  Since the start of Oct, though, they have been above 200K.  While the number of new jobless claims has remained low enough to avert fear that the country is already in the throes of a recession, most economists anticipate that the US economy will enter a Fed-induced recession at some point in the new year.  That is because rate hikes can take a while to filter thru the broader economy & create recessionary conditions & job losses.  It is expected that as the rate hikes begin to ripple across the economy, jobless claims begin to tick up, & then monthly jobs reports will begin to turn negative.

Jobless claims remain low in reassuring sign for economy

Mortgage rates fell for the first time in 3 weeks.  The 30-year fixed-rate mortgage averaged 6.33%, down from 6.48% last week, according to mortgage buyer Freddie Mac.  A year ago, the 30-year FRM averaged 3.45%.  The 15-year fixed-rate mortgage averaged 5.52%, down from last week when it averaged 5.73%.  A year ago, the 15-year FRM averaged 2.62%.  "While mortgage rates have resumed their decline, the market remains hypersensitive to rate movements, with purchase demand experiencing large swings relative to small changes in rates," said Sam Khater, Freddie Mac's Chief Economist.  "Over the last few weeks latent demand has been on display with buyers jumping in and out of the market as rates move."  The Fed is expected to raise the federal funds rate again when its policy-setting Federal Open Market Committee concludes a 2-day meeting on Feb 1.  Fed officials have signaled that they may raise the central bank's main borrowing rate another 3-qtrs of a point in 2023, which would be 5-5.25%.  Fed officials will weigh the latest read on inflation.  At its final meeting of 2022, the Federal Reserve raised its rate 0.50 percentage points, its 7th increase last year.  That pushed the central bank’s key rate to 4.25-4.5%, its highest level in 15 years.  Fed officials will weigh the latest read on inflation.  A report today on consumer prices showed that inflation at retail-level eased to 6.5% in Dec, a 6th straight monthly decline.

Mortgage rates dip after two-week climb

Gold futures climbed to settle at their highest since late Apr after data revealed that the US cost of living in Dec fell for the first time since the onset of the pandemic in 2020.  The data raised expectations for slower Federal Reserve interest-rate hikes & pressured the $, providing support for precious metals.  Gold for Feb rose $19 (1.1%) to settle at $1898 an ounce, the highest most-active contract finish since Apr 29.

Gold Futures Settle at their Highest Since Late April

Oil futures tallied a 6th straight session climb, their longest streak of gains since Feb.  Prices extended their gains after posting a loss last week, helped by the weakness in the $ & optimism that a more benign inflation outlook will help to mitigate concerns over a sharp slowdown in the coming months.  The US benchmark WTI crude for Feb rose 98¢ (1.3%) to settle at $78.39 a barrel. 

U.S. oil futures log longest streak of session gains since February

Dow Jones Industrials