* Biden ordered missile strike on Iran-backed militia groups in Syria
* Proposal for federal minimum wage proposal hits roadblock in Senate ruling
* Today’s consumer spending report for January expected to show solid growth
* 10-year Treasury yield briefly topped 1.6% on Thursday–highest in over a year
* Inflation will remain contained, predicts Pimco’s chief investment officer
* US GDP growth revised up slightly to 4.1% for Q4
* Durable goods orders for US rose sharply in January — +3.4%
* US economic growth revised up via Philly Fed’s ADS Index
* US jobless claims fell sharply last week but remain unusually high:

The reflation trade remains in high gear. For the moment, it’s reasonable to view this trend as a return to the pre-pandemic period, before the coronavirus crisis roiled bonds markets and slashed yields. The question is whether the recent rebound in rates has legs and indicates that there’s more to the trend than a return to the pre-pandemic “normal”? Unclear, but the answer is forthcoming in the data, including four key metrics that will likely provide early signals of things to come.

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* Senate may revise $1.9 trillion covid aid bill in days ahead
* Worrisome mutation of coronavirus spreading in New York, report finds
* Moderna set to test modified vaccine to treat coronavirus variant
* Fed’s Powell tells Congress central bank’s in no rush to raise rates
* Rising 10-year Treasury yield is headwind for risk assets
* Bull market is reversing two-decade slump in supply of new public companies
* Eurozone economic confidence improves on optimism for vaccine rollout
* Risk factors to watch for booming housing market
* New US home sales rose more than expected in January, near 13-year high:

In this issue:

• Is big oil the new tech? No, but it’s doing a pretty good imitation so far in 2021
• Floating-rate bonds are having a good year
• Will commercial real estate recover from the pandemic? It’s off to a good start

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The bond market is reeling from firmer reflation expectations, or at least some corners of the market are taking a hit. But in the reordered world of fixed income in 2021 there are also winners, based on year-to-date returns for a set of exchange traded funds through yesterday’s close (Feb. 23).

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* Biden: US and Canada to work toward zero emissions by 2050
* Fed Chairman Powell: recovering lost jobs will take years
* Fed’s easy money policy will continue until economy recovers, says Powell
* Value investing’s old rules are history, say academics
* Exports and construction boost German GDP in fourth quarter
* Mid-Atlantic manufacturing activity continues to expand in February
* US Consumer Confidence Index continues to rise in February
* US home prices increased 10.4% in Dec vs. year ago–fastest pace in 7 years:

Evidence is mounting that the disinflationary dive following the onset of the coronavirus crisis in the spring of 2020 is fading, giving way to a run of reflation. There’s a popular narrative that equates reflation with inflation, and that the former is destined to lead to the latter. Maybe, but maybe not.

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* Fed and Treasury officials say US jobless rate is near 10%–well above official rate
* Price tag for severe weather blowback in Texas: $50 billion
* US factories struggling to keep up with snap-back in consumer demand
* Bond yields rise ahead of Fed Chairman Powell’s testimony in Congress
* Eurozone core consumer inflation rebounds to 5-year high in January
* UK unemployment rate at 5-year high in 2020’s fourth quarter
* US Leading Economic Index rose in January, pointing to firmer growth outlook
* Texas manufacturing sector growth accelerates in February
* US economic activity strengthened in January via Chicago Fed Nat’l Activity Index:

Commodities and foreign junk bonds were the only winners last week for the major asset classes, based on a set of exchange traded funds. Otherwise, red ink dominated results for the US trading week through Friday, Feb. 19.

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* House set to pass Biden’s $1.9 trillion coronavirus relief package this week
* Huge protests in Myanmar continue despite threats from military
* Boeing 777s grounded after Denver engine failure
* Global cases of coronavirus peaked in January, according to latest data
* Americans may still need to wear masks in 2022, Fauci says
* Will the US economic recovery accelerate and bring years of strong growth?
* Will firmer inflation create trouble for Wall Street? Maybe not
* Brent crude oil rebounds–Goldman predicts price will top $70/barrel
* German business sentiment rose far more than expected in February
* US business activity near 6-year high in February via PMI survey data: