Dow dropped 251, decliners over advancers 5-2 but NAZ added 105. The MLP index was off 3+ to the 203s & the REIT index retreated 7+ to the 451s. Junk bond funds retreated & Treasuries were heavily sold, dropping the yield on the 10 year Treasury down 4 basis points to below 2.01%. Oil rose in the 93s & gold surged 28 to 1870 on intl tensions.
AMJ (Alerian MLP index tracking fund)
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The US economy under Pres Biden plunged to an all-time low, according to the Heritage Foundation's annual Index of Economic Freedom. "This year’s Index of Economic Freedom
paints a disturbing picture, both at home and abroad," Heritage
Pres Kevin Roberts said. "The decline of American
economic freedom is serious cause for alarm and has real and tangible
consequences for all Americans, especially low-income families and the
working class." The report determined the US fell 2.7 points from the 2021 Index of Economic Freedom to a record-low score of 72.1. The US also fell to its lowest ranking globally, from the 20th spot in last year’s rating to 25th in 2022. The index, launched in 1995, evaluates countries on rule of law,
gov size, regulatory efficiency & open markets, while also
examining specific categories such as property rights, judicial
effectiveness, gov integrity & tax burden. Americans
are currently dealing with 40-year highs in inflation, with the
consumer price index rising 7.5% in Jan of this year compared to the
same month in 2021. Biden's first year in office also saw a
supply-chain crisis, US consumer confidence plunging to an 11-year low,
industries rocked by vaccine & mask mandates & the US national
debt notching a new record when it surpassed $30T. "Since early 2020, when the Chinese Communist Party unleashed the COVID-19 pandemic on
the world, we have dealt with one of the greatest political, social and
economic upheavals of the past century," Roberts said. The report found that, globally, the economy remains "moderately free,"
though the economic freedom score dropped to 60 this year from 61.6 in
2021.
US drops to last place in economic freedom ranking under Joe Biden
St Louis Federal Reserve Pres James Bullard made his case for a rapid move higher in interest rates, saying that the central bank needs to react to accelerating inflation. “I do think we need to front-load more of our planned removal of accommodation than we would have previously. We’ve been surprised to the upside on inflation. This is a lot of inflation,” Bullard said. “Our credibility is on the line here and we do have to react to the data,” he added. “However, I do think we can do it in a way that’s organized and not disruptive to markets.” Those comments came after Bullard rattled markets last week by saying he thinks the Fed should raise its benchmark short-term borrowing rate a full percentage point by Jul. The position sent stocks on a volatile ride & caused futures markets to price in as many as 7 qtr-percentage-point hikes by the end of 2022. Along with that, markets are now tilting to a 50 basis point, or 0.5% point, increase at the Mar meeting. “I think my position is a good one, and I’ll try to convince my colleagues that it’s a good one,” Bullard continued. While virtually all officials on the FOMC have expressed the desire to start raising rates in Mar, Bullard has been perhaps the most hawkish. Several other officials have said they think a qtr-point move at the upcoming meeting would suffice. “History tells us with Fed policy that abrupt and aggressive action can actually have a destabilizing effect on the very growth and price stability we’re trying to achieve,” San Francisco Fed Pres Mary Daly said yesterday “So, what I would favor is moving in March and then watching, measuring, being very careful about what we see ahead of us and then taking the next interest rate increase when it seems the best place to do that.”
Fed's Bullard says the central bank's 'credibility is on the line,' needs to 'front-load' rate hikes
Russia's foreign minister has reportedly suggested to Pres Vladimir Putin that Moscow use diplomacy to obtain concessions from the West, after US officials warned a Russian attack on Ukraine could happen “any day now.” Sergey Lavrov had said to Putin that the Kremlin should seek a diplomatic route toward procuring the security guarantees it has demanded, as tensions mount over its military activity at the Ukrainian border. Russia is demanding that Ukraine never be permitted to become a NATO member & has said it wants the organization to roll back its presence in Eastern Europe. US national security advisor Jake Sullivan said yesterday that a Russian attack on Ukraine could happen “any day now.” “That includes this coming week,” he said. Security officials in DC, London & Ukraine said that US intelligence officers had briefed allies last week that the invasion may begin on Wed. However, Sullivan said yesterday that officials “cannot perfectly predict the day.” Ukraine yesterday filed a request for a meeting with Russia under the Vienna Document — a treaty signed by 56 member states aimed at maintaining military transparency across Europe.
Russia’s Lavrov calls for more talks as Ukraine crisis escalates
There is plenty for investors to digest & nothing is pleasant. Russia-Ukraine tensions dominate the news. Then there is guessing what the Fed will do next month, US-Canada tensions, China, Covid, consumer confidence, inflation uncertainties along with US debt being aggressively sold. As a result, gold is very popular.
Dow Jones Industrials
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