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Dow rises 220 factors to new report after inflation report is just not as unhealthy as feared

Dow rises 220 points to new record after inflation report is not as bad as feared

The Dow Jones Industrial Average and the S&P 500 rose on Wednesday after inflation jumped, but not by quite as much as investors feared when stripping out volatile food and energy prices.

The 30-stock Dow gained 220.30 points, or 0.6%, to 35,484.97 to close at a new record. The index was lifted by names like Caterpillar and Home Depot. The S&P 500 traded up 0.2% to 4,447.70, also notching an all-time high. The technology-heavy Nasdaq Composite traded over 0.1% lower to 14,765.14.

July’s Consumer Price Index released Wednesday showed prices jumped 5.4% since last year, compared to expectations of 5.3%, according to economists surveyed by Dow Jones. The government said CPI increased 0.5% in July on month-to-month basis.

But investors were concentrating on the core rate of inflation, which could signal inflation will remain tempered and the economy will remain strong. CPI, excluding energy and food prices, rose by 0.3% last month, below the 0.4% increase expected. Core prices still jumped 4.3% on a year-over-year basis.

“It’s encouraging to see the pace moderating a bit month over month supporting the notion that recent price increases are transitory and reopening related,” said Mike Loewengart, managing director of investment strategy at E*TRADE Financial. “So while inflation continues to run hot, it’s likely that investors are already pricing it in.”

Used car prices, which investors have been watching as one sign of out-of-control inflation, rose just 0.2% in July after surging more than 10% in the prior month.

The data “should help assuage investor fears that the Fed is too laid-back about inflation pressures, ” said Seema Shah, chief strategist at Principal Global Investors. “The details of the data release suggest some easing in the reopening and supply-shortage driven boost to prices, and tentatively suggests that inflation may have peaked. Investors in the transitory camp will feel slightly vindicated.”

The inflation reading supported the Federal Reserve’s belief that high price pressures are “transitory” as the economic recovers from the pandemic-triggered recession.

The 10-year Treasury yield dipped amid the inflation report and a strong auction. The decline in rates accelerated after Dallas Fed President Robert Kaplan told CNBC that the Fed should start tapering its bond-buying programs in October.

Oil prices dropped and then recovered after the White House called on OPEC and its allies to increase oil production to support the global recovery from the pandemic.

On Tuesday, the Dow and S&P 500 closed at record highs following the Senate passing the $1 trillion infrastructure bill. The legislation earmarks $550 billion in new spending for areas including transportation and the electric grid. The Nasdaq Composite slid nearly 0.5% on Tuesday, registering its second negative session in the last three.

The march to record highs for stocks comes despite Covid case numbers rising in the U.S. and around the world.

“Widespread vaccine distribution and distancing measures have helped limit the variant’s impact, but we could still see some drag on economic growth as some restrictions are reintroduced and consumers potentially become more cautious,” said Barry Gilbert, asset allocation strategist at LPL Financial. “While we may see an increase in market volatility due to the delta variant, we believe the S&P 500 is still likely to see more gains through the end of the year.”

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— with reporting from CNBC’s Yun Li.

Categories
World News

Extra Than 100 Migrants Are Feared Lifeless as Boat Capsizes in Mediterranean

More Than 100 Migrants Are Feared Dead as Boat Capsizes in Mediterranean

CAIRO – More than 100 migrants traveling to Europe are feared dead in a shipwreck off Libya, according to independent rescue groups.

The Libyan Coast Guard searched for the boat but could not find it due to limited resources, a service official said.

The humanitarian group SOS Méditerranée, which operates the rescue ship Ocean Viking, announced late Thursday that the capsized rubber boat, which originally carried around 130 people, had been sighted in the Mediterranean northeast of the Libyan capital Tripoli. The ship did not find any survivors, but the helpers were able to see at least 10 bodies near the wreck.

“We think of the life that has been lost and the families who may never be sure what happened to their loved ones,” the group said in a statement.

Migrant traffic has raised questions in the countries of the European Union and in Libya as to who is responsible for rescuing those at risk at sea.

SOS Méditerranée said the missing were expected to have died, adding to the 350 people who have drowned in the sea so far this year. She accused the governments of failing to conduct search and rescue operations.

In the years since the 2011 NATO-backed uprising, in which longtime Libyan leader Colonel Muammar el-Qaddafi was overthrown and killed, the war-torn country has become the dominant transit point for migrants escaping war and poverty in Africa and flee in the Middle East. Smugglers often pack desperate families on poorly equipped rubber boats that stop and sink on the dangerous Mediterranean route.

Eugenio Ambrosi, chief of staff of the International Organization for Migration, said in a tweet: “These are the human consequences of policies that fail to respect international law and the most basic humanitarian requirements.”

AlarmPhone, which provides a crisis hotline for migrants in need in the Mediterranean, said it had close contact with the distressed boat for almost 10 hours before it capsized.

A Libyan Coast Guard spokesman, Cmdr. Masoud Ibrahim Masoud said the service searched the sea for more than 24 hours, adding, “The waves were very rough.”

Mr Masoud said the Coast Guard received rescue alerts around noon on Wednesday from two different rubber boats in distress east of Tripoli. A patrol ship was dispatched immediately and rescued 106 migrants, including women and children, who had been on board one of the two boats.

Two bodies were also pulled out of the water near the capsized vessel. He said the coast guard ship finally returned to port so that rescued migrants could receive medical assistance.

In the meantime, the Libyan authorities have asked three merchant ships and the Ocean Viking to search for the other missing boat until the Libyan patrol ship can join them again.

In recent years the European Union has teamed up with the Libyan Coast Guard and other local groups to contain such dangerous crossings. However, right-wing groups say these guidelines are at the mercy of migrants to armed groups or imprisoned in miserable prisons where abuse occurs.

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World News

Blasts Hit Army Barracks in Equatorial Guinea, With Many Feared Useless

Hong Kong Website Doxxing Police Gets Blocked, Raising Censorship Fears

A series of explosions rocked the city of Bata in the central African nation of Equatorial Guinea on Sunday, killing at least 20 people.

Reuters news agency quoted a local television broadcaster, TVGE, as saying that at least 20 people had been killed. A local news agency, TVGE, said hospitals reported up to 400 injuries.

The cause of the explosions, which were reported to have occurred near a military barracks in the west coast oil producing nation, was not immediately apparent.

The country’s Ministry of Health and Welfare declared a health emergency and said many were missing under the rubble. The video shows scenes of people digging for victims while thick smoke billowed across the rubble-strewn landscape. Others fled through the streets, some with suitcases and children in hand, under a dark sky.

The ministry said rescue workers took the injured to at least three hospitals in the city. Officials appealed for blood donations. Pickups were loaded with survivors, reported Reuters, and drove in front of a hospital – where some saw victims lying on the ground.

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Business

Virus Did Not Deliver Monetary Rout That Many States Feared

Virus Did Not Bring Financial Rout That Many States Feared

In his survey, Peter DeGroot, director of community research and strategy at JP Morgan, found a handful of states, including Idaho, South Dakota and New Mexico, that made even more money last year than they did in 2019. The survey also found several states where tax revenues have not yet declined because they depend heavily on tourism, oil and gas, or coal mining – including Hawaii, Nevada, Florida, Texas, and West Virginia.

Ms. Sheiner’s analysis found that Idaho had the largest revenue recovery of any state. She did research with Byron Lutz, a Federal Reserve economist.

Idaho financial management director Alex J. Adams said in an interview that the boom took officials by surprise and that they held a reason for the influx of new California residents to escape the high cost of this state’s life – a trend that started before the pandemic but accelerated over the past year. Mr Adams also said Idaho did not pause construction when the lockdowns were in place, which helped economic activity.

Idaho Republican Governor Brad Little said in his January speech to the state that 2020 revenue was strong enough to send $ 295 million back to taxpayers and still enough to move into better highways, Investing in bridges and broadband access. He also wrote to the Idaho Congressional delegation last year calling on them to oppose the use of non-binding federal dollars to rescue badly governed states.

With some states now “enjoying gusts of wind” and others still struggling, Mr. White said a smaller amount of money, more targeted towards the states that need it most, would be the most efficient approach for Congress. But getting help to those governments who really need it, without sending unnecessary aid to those who don’t, requires “exceptional creativity,” he said.

To some extent, the surprising rallies in states reflect the timing of events over the past year. The pandemic began when many state lawmakers were reviewing initial budget proposals for the coming fiscal year. The proposals worked out weeks before the shock forecast a year of heavy tax rises.

Then, within a few weeks, millions of people lost their jobs. State officials view unemployment as a major driver of their tax affairs; Research from previous recessions suggests that a single percentage point increase in the unemployment rate could cause the state budget to suffer $ 45 billion.