While investors are focused on the prospects for inflation and economic growth, during his testimony to Congress Powell highlighted how far the U.S. labor market is from maximum employment.  Jobless claims fell sharply last week despite brutal winter storms that swept across Texas and other parts of the South, the Labor Department reported Thursday.  First-time filings for unemployment insurance totaled 730,000 for the week ended Feb. 20, well below the Dow Jones estimate of 845,000. 

Rich countries’ governments borrowed $18 tril¬lion from bond markets in 2020—more than ever before—but their borrowing costs hit a record low, due to a big rise in bond purchases by central banks, as well as a lack of concern about public debt levels among private investors.  In contrast to the years that followed the collapse of Lehman Brothers in Sep¬tember 2008, there was no rise in bond yields in 2020, and governments faced a lower interest bill than they did before the financial crisis, the OECD said.

The FCC has announced the winners of a wireless airwave auction it conducted over the past few months which racked up a record $81B in bids. The mid-band spectrum, sometimes called the "Goldilocks band," is well-suited for 5G networks because it is able to transmit large amounts of data on a wavelength that can travel long distances. The 280-megahertz spectrum is also especially important to wireless giants who have been trying to fill out their spectrum portfolios.  Verizon captured the lion’s share for $45B.

The volatility in global bond and equity markets is easing today after Fed Chair Jerome Powell's reassuring comments to the Senate Banking Committee yesterday. He signaled that the central bank is nowhere near pulling back its economic support measures, saying there was still a long way to go to reach their inflation and employment goals. Powell will give testimony to the House Financial Services Panel today. 

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The global bond market is suffering its worst start to a year since 2015 as investors grow increasingly confident that the rollout of Covid-19 vaccines will boost economic growth and fan serious inflationary pressures for the first time in decades. The Bloomberg Barclays Multiverse index tracking $70tn worth of debt has lost 1.9 per cent since the end of last year, in total return terms that account for price changes and interest payments. If sustained this would be the worst quarterly performance since mid-2018 and the sharpest first-quarter setback for the broad fixed income gauge in six years.

Continued fiscal and monetary support, coupled with the rapid rollout of vaccines, mean investors are increasingly confident in a strong economic recovery over the horizon. For the oil market this means forecasts of $100 a barrel crude are emerging, less than a year after the commodity traded in negative territory. Goldman Sachs Group Inc. strategists said that the recovery in demand will outpace supply when they increased their third-quarter forecast for the commodity to $75 a barrel.

 The stock market’s highest flyers remain under pressure this morning. Futures for the tech-heavy Nasdaq 100 dropped 1.5%, after the index slumped 2.6% in trading yesterday on a selloff in some of the hottest pandemic buys such as Peloton Interactive Inc. which sank 10%. Tesla Inc. shares are set to tumble again at the open with futures trading well south of $700. CEO Elon Musk's bet on Bitcoin also took a hit with the cryptocurrency dropping significantly again this morning. 

Get ready for Fed Chair Jerome Powell's semiannual monetary policy testimony before Congress, which will take on additional importance this time around as investors size up the recent run-up in bond yields. Powell will answer questions from the Senate Banking Committee today and appear before the House Financial Services Committee tomorrow. He's expected to reaffirm his commitment to an ultra-easy monetary policy, as well as the need for more fiscal stimulus, to support the economy as it emerges from the COVID-19 pandemic.

In earnings news, Home Depot, home improvement retailer beat quarterly estimates with earnings of $2.65 per share. Revenue came in above estimates as well. Comparable store sales jumped 24.5% during the fourth quarter, more than the 19.2% consensus estimate of analysts polled by FactSet. Home Depot is not providing 2021 guidance, however, due to pandemic-related uncertainty. 

While the S&P 500 is coming off its first losing week in three, the market is going into the final week of February with solid gains. The Dow and S&P 500 have already climbed more than 5% this month, the Nasdaq advanced 6.2% and the small-cap Russell 2000 outperformed with a gain of 9.3%. The 10-year Treasury yield jumped 14 basis points last week to 1.34%, close to its highest level since February 2020. It even touched 1.37% overnight, meaning the benchmark rate has moved up 28 basis points so far this month.

Saudi Arabia and Russia are at loggerheads as they head into an OPEC+ meeting that's renewing the debate on global oil supply. Riyadh is said to prefer keeping output steady while Russia wants to proceed with an increase. Iran is also set to take part as the Islamic Republic engages in a diplomatic back-and-forth that could eventually lift sanctions on its crude exports. Attention will also remain on Texas as the state tries to recoverfrom the extreme weather.

The first real-world indication that immunization will curb transmission of the coronavirus comes from Israel, which is leading the world in the vaccine race. There, the Pfizer Inc. and BioNTech SE Covid-19 vaccine appeared to stop the vast majority of recipients becoming infected.

U.S. stocks were lower yesterday as investors were discouraged by a worse-than-expected jobless claims reading as well as a weak forecast from Walmart.

Another 861,000 workers filed for unemployment benefits for the first-time last week, according to the Labor Department. That's nearly 100,000 more claims than economists had predicted and the highest number in a month. It was also an increase from the week before -- which was revised higher as well. America's jobs recovery has really lost steam and last week's initial claims were four times higher than in the same period last year.

Walmart shares dropped after their fourth-quarter earnings fell short of Wall St estimates. The big-box retailer sees sales growth slowing this year as the pandemic momentum ebbs. Walmart also raised wages for store workers in digital and stocking positions to $13-$19 an hour, though their minimum starting wage will remain $11/hr.

The cost to build a new house is going significantly higher. Lumber prices are now at an all-time-high of $1,004 per 1,000 board feet, which is double the price just 3 months ago.

U.S. stocks hovered near record levels yesterday as rising bond yields kept investor sentiment in check.  Many on Wall Street believe that surging interest rates could make the high-flying stock market less attractive, while posing a threat to sectors like technology that have benefited from the low-rate environment.

St. Louis Federal Reserve president James Bullard said that he doesn’t see a bubble in asset prices and doubts the central bank needs to start tightening policy anytime soon.  With prices surging in the stock market and in alternative assets like bitcoin, Fed officials have faced repeated questions about whether low rates and trillions in bond buying have helped create dangerously high valuations.  The Fed has stated that still don’t see any clear signs of excesses in the US economy.

Buying nutritious food is getting costlier as hunger in the country remains at elevated levels during the pandemic.  The consumer price index (CPI) for food increased by 0.4% in December 2020 from the previous month, with food prices ending the year 3.9% higher than 2019, according to recent data from the Department of Agriculture. The year-over-year jump outpaced the 20-year average of 2.
 

The price of Oil is 25% higher so far in 2021 and prices are headed higher after frigid temperatures in Texas over the weekend shuttered oil refineries and forcing restrictions on Natural Gas operators. The price of West Texas Crude is now over $60/barrel, which is the highest since the start of the pandemic.

Pessimism about financial security, especially among middle- and lower-income Americans, grew in early February and fewer expect the economy to show much improvement by the summer. The first of two readings of consumer sentiment this month fell 3.5 points to 76.2 in early February and touched a six-month low, according to an index produced by the University of Michigan. The index registered 79 in January.

Japan’s stock market set a new 30-year high, continuing the rally in global stocks amid stronger-than-forecast corporate earnings. The Nikkei 225 rose 1.9% to 30,084.15 after a stronger-than-forecast 3% rise in fourth-quarter gross domestic product for Japan. Markets more broadly have been boosted this year by the so-called reflation trade where an economy is resuscitated after a period of duress. The rollout of vaccines and the proposed $1.9 trillion stimulus plan from the Biden administration have stoked enthusiasm that the global economy will accelerate later this year.

Fed Chair Jerome Powell yesterday said that the U.S. jobs market remains a long way from a full recovery, and that monetary policy would remain very accommodative until there was "substantial further progress" on employment and inflation. There was little sign of that progress in yesterday's slower-than-expected data on price growth, and today's initial jobless claims number 

totaled 793,000 last week as declining Covid-19 cases provided little relief for the jobs market. The total for the week ended Feb. 6 was above the 760,000 forecast from economists surveyed by Dow Jones but a slight decrease from the previous week’s upwardly revised total of 812,000 

Another glitzy IPO will begin trading today as a strong streak continues for stocks and the public markets. Bumble, the hot app which requires women to reach out first in hetero dating situations, will open on the Nasdaq under ticker symbol "BMBL." It's worth more than $8B, based on a higher-than-expected share price of $43, while the company increased the number of shares it sold to as many as 57.5M.

General Motors became the latest automaker yesterday to warn about a chip shortage, saying the semiconductor crunch could cut its earnings by $1.5B-$2B in 2021. It's not alone. Many companies across multiple industries have been flagging the problem in recent months, such as AMD and Qualcomm, which sell chips to most of the top electronics firms, or Sony, which blamed the shortage for why it's so hard to get a PS5.

Nearly 6,000 employees at an Amazon warehouse just outside of Birmingham, Alabama, called BHM1, began a vote this week to unionize their facility, marking the first such significant effort by Amazon workers in the U.S. The retail giant has been fighting hard against the endeavor with anti-union posters, a dedicated website launch and holding mandatory meetings during work hours, but a group of more than 70 investors has written a letter asking the company to stop interfering with the vote and remain neutral. They have cited worker rights to unionize, as well as possible negative effects on Amazon's reputation among customers. 

Global shares hit a record high on Wednesday, with sentiment boosted by optimism about the latest data on the efficacy of Covid-19 vaccines.  Investors will look for clues on how the Federal Reserve plans to respond to brighter economic prospects when its chairman Jay Powell speaks later on Wednesday, at the Economic Club of New York, about the state of the US labour market.

U.S. consumer prices rose moderately in January and underlying inflation remained benign as the pandemic continues to be a drag on the labor market and services industry.  The Labor Department said on Wednesday its consumer price index increased 0.3% last month after climbing 0.4% in December. In the 12 months through January the CPI rose 1.4% after a similar gain in December. 

US Stocks posted their fourth positive day in a row yesterday trading at a record high as investors assessed a new batch of corporate earnings and solid economic data.

According to the Labor Department the US economy added 49,000 jobs in January and the unemployment rate dropped to 6.3%.  Job gains were concentrated in professional services and local government education.  The job gains were in line with economists expectations.

New orders for U.S.-made goods rose more than expected in December and business spending on equipment was solid, pointing to continued strength in the manufacturing industry in the near term.  The Commerce Department said that factory orders increased 1.1% after surging 1.3% in November.

Shares of Ford are higher after the company reported better than expected 4th quarter earnings.   During their conference call they announced they are significantly cutting production of their highly profitable F-150 pickup trucks due to an ongoing semiconductor chip shortage plaguing the global automotive industry.

U.S. stocks ripped again yesterday, building on a strong rally in the previous trading session as concerns about a speculative retail trading frenzy continued to ease.

Many of the stock picks popularized on Reddit’s wallstreetbets forum last week extended Monday’s losses, giving back more of last week’s sharp gains. GameStop sank more than 40% following a 31% slide on Monday, bringing the stock down below $100 per share at session lows from a peak of $483 last week. 

Amazon reported another round of record-setting quarterly results, as consumers still under stay-in-place restrictions turned in droves to the e-commerce platform, especially over the holiday shopping season.  Amazon had revenue of $125 Billion in the 4th quarter.  The company also announced that their founder Jeff Bezos will be stepping down as CEO.  Andy Jassy their head of web services will take over Bezos’ role.

Google’s parent company, Alphabet, reported 4th quarter earnings that beat analysts’ expectations.  Revenue grew by 23% propelled higher by their advertising business.

Stocks traded higher yesterday, the first session of February, as Wall Street appeared to shake off concerns about a speculative retail trading mania that largely drove the market’s worst weekly sell-off since October last week.

A measure of U.S. manufacturing remained robust at the start of the year, though pandemic-related supply chain disruptions are restraining production and driving up prices. The Institute for Supply Management’s gauge of factory activity eased to a still-elevated 58.7 in January from 60.5 a month earlier. Readings above 50 indicate manufacturing is expanding. The group’s index of prices paid for raw materials rose to the highest since April 2011.

U.S. construction spending raced to a record high in December as historically low mortgage rates powered outlays on private projects. The Commerce Department said that construction spending increased 1.0% to $1.5 trillion, the highest level since the government started tracking the series in 2002.

US Stocks suffered their worst sell-off since October last week as investors took some risk off the table.

This week investors will be watching another busy week of earnings with 99 S&P companies set to report. Alphabet, Amazon, Alibaba, Snap, Exxon, Biogen, Pfizer and Chipotle are among the names set to report this coming week. Thursday is the busiest day of the earnings season.

According to the National Association of Realtors the index of pending home sales dropped 0.3% in December, marking the fourth consecutive month of declines. The index measures real-estate transactions in which a contract is signed, but the sale had not yet closed. Compared to 2019, pending sales were still up 21%, a sign of how strong the market is right now despite the recent weakness. Pending sales didn’t fall across all regions, as was the case in November. In fact, the Midwest was the only region to experience a decline, with a 3.6% drop. Pending sales were flat in the West and rose by 3.1% in the Northeast and 0.1% in the South.

Futures contracts for silver surged higher as the Reddit-fueled boom in highly shorted stocks appears to be spilling over into the metals market. Silver Futures are up over 8%, marking the biggest move in Silver futures since at least 2013.