Dow finished up 38, advancers ahead of decliners 5-4 & NAZ went up 34. The MLP rose 2+ to the 198s & the REIT index inched up 1 to 488. Junk bond funds remained mixed & Treasuries were purchased. Oil gained 1+ to the 82s & gold added 8 to 1827 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Acting Food & Drug Administration Commissioner Dr Janet Woodcock gave US lawmakers an ominous warning this week: The nation needs to ensure police, hospital & transportation services don't break down as the unprecedented wave of omicron infections across the country forces people to call out sick. “It’s hard to process what’s actually happening right now, which is most people are going to get Covid,” Woodcock testified. “What we need to do is make sure the hospitals can still function, transportation, other essential services are not disrupted while this happens.” Much like last winter when public officials were trying to contain the spread of Covid, public services & businesses across the US are cutting back & limiting hours, some even temporarily shutting down. This year, however, so many workers are out sick with the virus, it/s disrupting services that public officials are otherwise trying to keep open. From New York to Los Angeles, emergency services are struggling to staff enough police, nurses, EMTs & firefighters as more & more workers call out with Covid. Public transit systems in New York & Chicago are suspending or have disrupted some services, airlines are cutting back flights & public officials have been forced to quarantine at home as the highly contagious omicron variant pierces thru vaccine protection & sends large swaths of mostly unvaccinated people to the hospital. The US reported a pandemic record of almost 1.5M new Covid infections on Mon with an average of about 750K new infections every day over the last week, according to Johns Hopkins University. That compares with a 7-day average of about 252K new cases a day a year ago. Hospitalizations are also higher than last winter’s peak — before the widespread distribution of vaccines — & continue to rise. More than 152K people in the US were hospitalized with Covid as of today, up 18% over the last week, according to data tracked by the Dept of Health & Human Services.
Omicron disrupts essential services as workers call out sick: ‘Most people are going to get Covid’
US natural gas futures surged more than 13% today as temperatures drop & forecasts call for more winter weather ahead. The contract for Feb delivery advanced 13.3% to $4.818 per M British thermal units, the highest level since Nov. After surging for much of 2021, natural gas prices dropped 36% during Q4 following warm temperatures & as the omicron
variant sent jitters thru the market. Still, the contract posted a 47% gain for 2021 & is already up nearly 30% for 2022.
Natural gas surges 13% as cold snap ahead is expected to boost demand
A record 15M new Covid-19 infections were reported across the globe in a single week as omicron rapidly replaces delta as the dominant variant across the globe, & “we know this is an underestimate,” World Health Organization Director-General Dr Tedros Adhanom Ghebreyesus said. “The sheer volume of cases is putting a burden on health-care systems,” said Maria Van Kerkhove, WHO's technical lead on Covid-19. “Even though omicron is less severe than delta, it is still putting people in the hospital. It is still putting people into ICU and needing advanced clinical care. It is still killing people.” The US saw the biggest jump in cases with 4.6M new infections reported for the week thru Sun, a 73% increase over the prior week, compared to a 55% global increase in cases over the same period, according to a the WHO’s weekly epidemiology report published Tues. Tedros noted that hospitalizations are not quite as high as seen in previous surges, possibly due to decreased severity of omicron compared to delta & widespread immunity from vaccines & prior infection. But, he added, the death rate is still unsustainably high, with an average of about 48K deaths per week, which hasn't fluctuated much since Oct, Tedros added. “We’re seeing omicron out-compete delta in many populations,” Van Kerkhove said. While delta cases similarly peaked in a few months, it didn't take over the globe as quickly nor were the cases as high as omicron. “This is off the charts,” she said. Among more than 357K cases sequenced in the last 30 days, nearly 59% were omicron. The WHO, the UN's health organization, cautioned that the data may not fully show how far omicron has spread due to reporting delays & limits sequencing in some countries. According to the report, omicron has a shorter doubling time than other variants, meaning the number of days it takes for cases to double & it can more readily evade prior immunity, allowing it an advantage over other variants. While omicron has appeared to rip thru populations where it was detected early & then drop down to lower levels. Van Kerkhove said delta had a similar trajectory at its height, but never peaked at such levels as omicron. But, she emphasized, the direction of omicron can still be influenced by the world's actions, including vaccination & taking steps to minimize spread. “There is no inevitability about this virus and how it circulates,” she added. “We have control, some measure of control, in terms of limiting its spread with tools that we have access to: masks, distancing, ventilation, avoiding crowds.” Van Kerkhove said the WHO expects the virus will continue to evolve to become more fit & either more or less severe, that there will continue to be outbreaks of disease among the unvaccinated & that as different populations mix, outbreaks of other viruses will sometimes occur at the same time as those of Covid.
WHO says omicron cases are ‘off the charts’ as global infections set new records
Gold futures climbed for a 4th straight session, settling at their highest level of the year as the $ & Treasury yields declined in the wake of stronger-than-expected US consumer inflation data. Consumer prices rose 0.5% in Dec to push the increase in the cost of living last year to a nearly 40-year high of 7%, indicating high US inflation is likely to persist well into 2022. The gain in the consumer-price index exceeded the 0.4% forecast. The data also reinforce the view that inflation is running well above the Federal Reserve's annual target of 2%. Feb gold rose $8 (0.5%) to settle at $1827 an ounce, following a 1.1% gain yesterday. Prices for the most-active contract ended at their highest since Dec 31 & notched a 4th straight session gain, the longest string of gains since a 7-session stretch ended Nov 12. The $, based on the ICE US Dollar index, traded 0.7% lower at 94.991, boosting prices for $-denominated gold.traded at 1.724%, down from 1.745% yesterday, raising investment appeal for gold, which offers no yield. The $ weakened yesterday, as the market factored in comments from Federal Reserve Chair Jerome Powell during his confirmation hearing for a 2nd 4-year term. Yesterday, gold prices retained gains after Powell said the central bank’s plans to raise interest rates shouldn’t hurt economic expansion, essentially painting a picture of a “soft landing” rather than a recession. In his comments, Powell also said it would be a “long road” to policy normalization, which “offset to a degree the more hawkish tenor of the recently released FOMC minutes.
Gold logs highest price of 2022 so far because its ‘a rocket ship and inflation is its fuel’
Oil prices climbed, settling at a 2-month high, with US crude inventories posting lasr a decline for a 7th straight week & traders mostly upbeat on the outlook for the economy & oil demand. The Energy Information Administration (EIA) reported a 4.6M-barrel fall in US crude supplies for the week, to 413M barrels, excluding stocks in the Strategic Petroleum Reserve. That was the lowest weekly supply reading since 2018. Crude supplies also marked a 7th-straight weekly decline & came in well above the 1.6M barrel decrease expected. The American Petroleum Institute reported a 1.1M-barrel fall. West Texas Intermediate crude for Feb rose $1.42 (1.8%) to settle at $82.64 a barrel. Mar Brent crude, the global benchmark, climbed 95¢ (1.1%) to $84.67 a barrel. Prices for both front-month contracts finished the session at their highest since Nov 9. The EIA also reported weekly inventory increases of 8M barrels for gasoline & 2.5M barrels for distillates. The forecast expected supply gains of 3M barrels for gasoline & 2M barrels for distillates. The EIA data, meanwhile, showed crude stocks at the Cushing, Okla, edged down by 2.5M barrels for the week, while total domestic petroleum production fell 100K barrels to 11.7M barrels per day. Crude oil stocks at the Strategic Petroleum Reserve fell modestly to 593M barrels, down 300K barrels for the week. Feb natural gas settled at $4.857 per M British thermal units, up more than 14%, with prices at their highest settlement since Nov 26. Analysts expect the EIA tomorrow to report a natural-gas supply withdrawal of 177B cubic feet for last week. That compares with a 5-year average decline of 155B cubic feet.
Oil prices end at a 2-month high with U.S. crude supplies down a 7th week in a row
At the open, the Dow jumped 200. However enthusiasm faded & it spent the rest of the day around break even. Even though the economy seems to be doing well in its recovery, dreary news on inflation & Covid dominate the stories. Not good!!
Dow Jones Industrials
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