Dow slid back 25, advancers over decliners about 5-4 & NAZ declined 20.  The MLP index was off a fraction to 231 & the REIT index gained 2+ to the 396s.  Junk bond funds were a little lower & Treasuries climbed higher, reducing yields.  Oil fell 1 to 80+ & gold added 6 to 1935, another high since Apr.

AMJ (Alerian MLP Index tracking fund)

• Eliminating virtually all defense & non-defense discretionary spending;
• Cutting Medicaid spending in ½ while eliminating all other mandatory spending programs aside from Social Security & Medicare;
• Eliminating all nondefense discretionary spending while ending the Medicaid program;
• Repealing Medicare, all income security programs, & all refundable tax credits; or
• Discontinuing all Social Security retirement & survivors' benefits.

The CRFB produced a "Blueprint for Reducing Debt and Inflation" as a framework to inform fiscal policy discussions which would achieve an estimated $7T reduction in debt over a decade thru a series of reforms.  Those yielded $1.5T in healthcare savings, $1T of income tax revenue, $1.5T in savings from reduced discretionary spending, $1T from Social Security solvency measures, $500B of savings from other reforms & $1T of interest savings.

Big spending cuts required to balance federal budget: CRFB

The Food & Drug Administration (FDA) is squaring off with anti-abortion physicians in an unprecedented legal challenge to its more than 2-decade-old approval of a pill used to terminate early pregnancies.  The Alliance for Hippocratic Medicine asked a federal district court in Dallas late last year to declare the FDA approval unlawful and completely remove the abortion pill from the US market.  The case has thrust the FDA in the middle of the fierce national battle over abortion access in the wake of the Supreme Court's decision to overturn Roe vs Wade last Jun.  If the lawsuit prevails, women across the US would lose access, at least temporarily, to the most commonly used abortion method.  The FDA's powers to approve drugs would also be weakened.  The court could issue a ruling as soon as Feb 10 when it will be fully briefed.  The Alliance for Hippocratic Medicine is represented by the Alliance Defending Freedom, a Christian organization that played a central role in the Dobbs vs Jackson Women's Health Organization case that ultimately resulted in the Supreme Court abolishing federal abortion rights.  Judge Matthew Kacsmaryk is hearing the challenge to the FDA's approval of the abortion pill.  Kacsmaryk was appointed by former Pres Trump to the US District Court for the Northern District of Texas in 2019.  The FDA approved mifepristone in 2000 for use in combination with misoprostol as a safe & effective way to end early pregnancies.  The drug regimen is currently approved for use up to the 10th week of pregnancy.  ½ of abortions in the US are performed with mifepristone & misoprostol.

FDA faces sweeping challenge in lawsuit seeking to pull abortion pill from U.S.

Treasury yields traded flat as investors awaited economic data releases & earnings reports that could provide hints about the state of the US economy.  The yield on the benchmark 10-year Treasury rose about a basis point to 3.543% & the 2-year Treasury  yield was last trading at around 4.251% after rising by a basis point.  Yields & prices have an inverted relationship & one basis point is equivalent to 0.01%.  S&P Global's flash purchasing managers' index report, which indicates whether economic activity in the manufacturing & services sectors is slowing or contracting, is expected today.  Further data points, including the personal consumption expenditure price index which is one of the Fed's favored inflation gauges, are due later in the week.  Many investors are concerned that the pace of rate hikes implemented by the Federal Reserve in an effort to curb persistent inflation could drag the US economy into a recession.  Uncertainty about whether the central bank will announce the 2nd 50 basis point increase in a row, or slow the pace to a 25 basis point hike at its next meeting on Jan 31 - Feb 1 has spread in recent weeks.

The problem of balancing the budget is being talked about again.  While this is a long term problem, it remains important.  Meanwhile markets are wavering, looking for direction.  Recession thoughts are everywhere & numerous reports about layoffs worry investors.

Dow Jones Industrials