Seven-Year Note Auction Attracts Below Average Demand

The Treasury Department finished off this week’s series of announcements of the results of its long-term securities auctions on Wednesday, revealing this month’s auction of $56 billion worth of seven-year notes attracted below average demand.

The seven-year note auction drew a high yield of 1.480 percent and a bid-to-cover ratio of 2.21.

Last month, the Treasury sold $59 billion worth of seven-year notes, drawing a high yield of 1.588 percent and a bid-to-cover ratio of 2.42.

The bid-to-cover ratio is a measure of demand that indicates the amount of bids for each dollar worth of securities being sold.

The ten previous seven-year note auctions had an average bid-to-cover ratio of 2.28.

Earlier this week, the Treasury revealed this month’s auction of $56 billion worth of two-year notes and $57 billion worth of five-year notes both attracted modestly above average demand.

Oil Prices See Further Upside Amid Drop In Inventories

Crude oil prices moved to the upside during trading on Wednesday, extending the advance seen over the past several sessions.

After rising $0.41 or 0.5 percent to $75.98 a barrel in the previous session, crude oil for February delivery climbed $0.58 or 0.8 percent to $76.56 a barrel.

The continued increase in oil prices came after a report from the Energy Information Administration showed U.S. crude oil inventories fell by more than expected last week.

The report showed crude oil inventories slid by 3.6 million barrels in the week ended December 24, exceeding economist estimates for a decrease of 3.1 million barrels.

Gasoline inventories also fell by 1.5 million barrels last week, while distillate fuel inventories declined by 1.7 million barrels.

A separate report released by the American Petroleum Institute on Tuesday showed crude oil inventories decreased by 3.1 million barrels last week.

Oil prices also continued to benefit from easing concerns about the impact of the Omicron variant of the coronavirus.

While the Omicron variant has contributed to a surge in new coronavirus cases around the world, traders seem optimistic that the milder symptoms associated with the new strain will not lead to a significant economic slowdown.

FULL SHOW 12/22/2021: The roller coaster ride on Wall Street isn't over

New York (CNN Business)Stocks set new records on Wednesday, as both the Dow (INDU) and the S&P 500 (SPX) finished at all-time highs.

Although the S&P hit a record as recently as Monday, the Dow hasn’t reached a new high since early November.
The Dow finished up 91 points, or 0.3%, while the S&P closed 0.1% higher.

The Nasdaq Composite (COMP) finished down 0.1%.

Although the gains were broad-based, travel-related stocks, including American Airlines (AAL) and United Airlines (UAL), didn’t fare so well Wednesday, amid sweeping cancellations and worries about the Omicron variant.

The rise of Covid infections due to the highly infectious Omicron variant continues to be a concern as pandemic restrictions returned across various European countries. The new variant could take its toll on the already battered supply chain, which would be bad news for consumers, the recovery and the market as well.

Still, it’s a quiet final week of the year for Wall Street with little in the way of economic data and many market participants out of the office. This is helping stocks broadly stay on course.
Stocks rise in the last, thinly traded week of the year so often that there’s a name for it: It’s known as a Santa Claus rally.

Government may find it hard to meet fiscal deficit target, says RBI

Gross borrowing to stay elevated: RBI

The Reserve Bank on Wednesday expressed doubt over the government’s ability to contain fiscal deficit at the budgeted 6.8% this fiscal after it moved the second supplementary demand of grants worth ₹3.73 lakh crore which came in spite of a massive 83% jump in net tax revenue so far this year to ₹10.53 lakh crore.

The government has budgeted for total expenditure of ₹34.83 lakh crore or 6.8% of GDP.

While the net tax revenue rose from ₹5,75,697 crore in October 2020 to ₹10,53,135 crore till October 2021, total expenditure rose only by 9.95%, led by infra spending to ₹18,26,725 crore from ₹16,61,454 crore during the period, the RBI said in the financial stability report.

Total expenditure grew 9.9%, with capital outlay expanding 28.3%, the RBI said.

“But with the second supplementary demand of grants worth ₹3.73 lakh crore, presented in December, the budgeted fiscal deficit of 6.8% of GDP may come under strain,” the central bank warned.

Though the size of gross government borrowing has proceeded at a pace that suggests that budget estimates would be adhered to, RBI said the Centre’s repayment obligations indicate a significant uptrend going forward, implying that gross borrowing is likely to remain elevated, notwithstanding fiscal consolidation.

Income-Tax department eases norms for ‘faceless’ appeal scheme

Commissioner (Appeals) to allow hearing via video

The Income Tax department has brought in changes to the existing faceless appeal scheme, easing the process for taxpayers wanting a personal hearing through video conference while appealing against a tax demand by the department.

The Central Board of Direct Taxes (CBDT) on December 28, notified the ‘Faceless Appeal Scheme, 2021’ and said that the Commissioner (Appeals) shall allow the request for personal hearing via video conference and communicate the date and time of hearing to the appellant via the National Faceless Appeal Centre.

“Such a hearing shall be conducted through video conferencing or video telephony, including use of any telecommunication application software which supports video conferencing or video telephony, to the extent technologically feasible,” said the ‘Faceless Appeal Scheme, 2021’.

However, a person would not be permitted to appear before the Income-Tax authority either personally or through an authorised representative in connection with any proceedings under this scheme.

Under the previous ‘Faceless Appeal Scheme, 2020, a taxpayer’s request for a personal hearing for making oral submissions, required the approval of the Chief Commissioner or the Director General of I-T, in charge of the Regional Faceless Appeal Centre.