Dow pulled back 448 with selling into the close, decliners over advancers about 2-1 & NAZ retreated 186. The MLP index went up 1+ to the 204s & the REIT index fell 5+ to the 462s. Junk bond funds remained weak & Treasuries declined as yields rose again. Oil jumped 5+ to the 114s & gold advanced 18 to 1939 (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)
The NATO alliance estimates that up to 40K Russian troops have been killed, injured, captured or gone missing during the first month of the Kremlin's war in Ukraine, an alliance official. Of those, 7-15K Russian troops have died. Russian officials have previously declined to publicly disclose how many of its troops have died while fighting in Ukraine. Yesterday, Kremlin spokesman Dmitry Peskov said that disclosing such figures is the “exclusive prerogative” of Russia’s Ministry of Defense. “On the numbers, we agreed from the very beginning that we do not have the authority to voice them during the special military operation,” Peskov said. The Pentagon has previously denied confirming any reported estimates on the number of Russian troops that have been removed from battle. Earlier this month, the US intelligence community assessed that up to 4K Russian troops have been killed in the Kremlin's then-2-week war in Ukraine. That figure, which was shared during an unclassified Mar 8 hearing with lawmakers, was presented by Lt Gen Scott Berrier, the director of the Defense Intelligence Agency. “With low confidence, somewhere between 2,000 and 4,000. That number comes from some intelligence sources but also open sources,” Berrier said during testimony before the House Intelligence Committee’s hearing on “Worldwide Threats.” Earlier in the day, NATO Secretary-General Jens Stoltenberg said the alliance would approve a “major increase” of its forces. Stoltenberg said the alliance is likely to bolster troops along the alliance's eastern flank, deploying four new battle groups in Bulgaria, Hungary, Romania & Slovakia. “I expect leaders will agree to strengthen NATO’s posture in all domains, with major increases in the eastern part of the alliance on land, in the air and at sea,” Stoltenberg said ahead of the NATO leaders summit in Brussels.
NATO: Up to 40,000 Russian soldiers killed, wounded, captured or MIA in Ukraine
Russia's ongoing invasion of Ukraine & what it means for global growth could soon begin to take its toll on the US. economy as it pushes inflation higher, according to the latest economic outlook from Fannie Mae. The latest Consumer Price Index (CPI), which is a key measure of inflation, increased 7.9% annually in Feb, a new 40-year high. In an effort to fight inflation, the Federal Reserve began raising interest rates at its Mar meeting but said more rate hikes will likely be needed in order to bri'ng it back down. But now, this change in the Fed's monetary policy caused Fannie Mae’s Economic & Strategic Research (ESR) Group to reduce its projections for economic growth in 2022, according to its Mar commentary. The ESR Group now projects real GDP growth of 2.3% in 2022, down from its previous projection of 2.8%. As the Fed continues to raise the federal funds rate to battle inflation that rose during the COVID-19 pandemic, other interest rates will also rise. Fannie Mae raised its predictions for mortgage rates this year & next, forecasting that the average 30-year fixed-rate loan will rise to 3.8% in 2022 & 3.9% in 2023. These annual rates are currently lower than today's interest rates, with the 30-year mortgage averaging 4.16%, according to the latest data from Freddie Mac. "Housing is currently acting as support to an otherwise slowing economy, although it is adding significantly to inflation," Doug Duncan, Fannie Mae senior VP & chief economist, said. "Even as interest rates are rising and reducing affordability, demographics are still strong supports for demand, and the paucity of existing home supply is supporting new construction and sales." "The degree to which monetary ease is capitalized into home values suggests increased risk as rates rise, but this may be offset by some evidence that housing is an intermediate-term hedge against inflation," he continued.
Inflation and Russian invasion of Ukraine to take a toll on US economy, Fannie Mae says
Intel 's (INTC), a Dow stock, CEO Pat Gelsinger likened semiconductors to oil, suggesting that computer chips will play a central role in intl relations in the decades ahead. “Oil reserves have defined geopolitics for the last five decades. Where the fabs [factories] are for a digital future is more important,” Gelsinger said. “Let’s build them where we want them, and define the world that we want to be part of in the U.S. and Europe.” Fabs is shorthand for fabrication plants, which are the factories where semiconductors are manufactured. The vast majority of chips are currently made in Asia, especially in Taiwan. That concentration has raised natural security concerns, particularly as China has scaled up its military presence near the democratically ruled island that Beijing claims as its own. Semiconductors also have been in short supply during the Covid pandemic, as production disruptions clashed with surging demand for the chips that are used in electronics, ranging from smartphones to cars to washing machines. Under Gelsinger's leadership, Intel has made an aggressive push to geographically diversify chip manufacturing. In recent months, INTC has announced massive investments to build new fabs in the US & Europe. INTC also started work last year on 2 chip factories in Arizona. The company — an influential firm in the early days of Silicon Valley — also has been pushing officials in both DC & Brussels to support legislation that would include gov money to assist in semiconductor production. His comments came ahead of his testimony before the Senate in support of a $52B subsidy plan.
Intel CEO says semiconductors are like oil — making more in U.S. can avoid global crises
Gold futures rallied, posting their highest finish in nearly a week as traders kept an eye on an increasingly hawkish Federal Reserve & monitor developments in the Russia-Ukraine war. Gold for Apr rose $15 (0.8%) to settle at $1937 an ounce. Most-active contract prices marked their highest settlement since Mar 17. San Francisco Fed Pres Mary Daly, meanwhile, said that “everything is on the table” in May, including a 50 basis point hike. Gold slipped yesterday as Treasury yields pushed to another round of nearly 3-year highs. Higher yields can raise the opportunity cost of holding nonyielding assets like precious metals. Yesterday, however, Treasury yields eased back. Meanwhile, investors were also watching the 4 week war in Ukraine where Russia is increasingly bogged down in a costly & uncertain military campaign, with untold numbers of dead, encircled by western sanctions that are biting hard on its economy & currency. Pres Biden was slated to hold summit meetings in Brussels tomorrow with NATO allies, Group of 7 leaders & the EU that's likely to produce further sanctions on Moscow.
Gold ends near a 1-week high as Russia-Ukraine war sparks ‘flight to quality’
Oil prices climbed sharply, with prices at their highest
settlement in just over 2 weeks, as supply worries hovered over the
market as the war in Ukraine neared a one-month mark & US crude
inventories posted a weekly decline. West Texas Intermediate crude for May rose $5.66 (5.2%) to settle at $114.93 a barrel. May Brent crude,
the global benchmark, climbed $6.12 (5.3%) to $121.60 a barrel. Brent & WTI marked their highest front-month
contract settlements since Mar 8. Supply concerns linked to Russian's invasion of Ukraine that shows no
signs of letting up, were again helping to drive gains for crude today, with US oil up over 11% & Brent climbing nearly 13% so
far this week. The Energy Information Administration (EIA) reported that domestic crude inventories fell by 2.5M barrels last week. EIA was expected the forecast to show crude inventories unchanged for
the week. The American Petroleum Institute reported a 4.3M-barrel decrease. The
EIA also reported weekly inventory declines of 2.9M barrels for
gasoline & 2.1M barrels for distillates. The survey had
shown expectations for weekly supply declines of 1.7M barrels
for gasoline & 1.4M barrels for distillates. Crude
stocks at the Cushing, Okla, Nymex delivery hub edged up by 1.2M
barrels for the week, while stocks in the Strategic Petroleum
Reserve fell by 4.2M barrels.
Oil prices settle at more than 2-week high as supply worries fester and U.S. inventories decline
Today was a time for profit-taking after the market's recent rally. The big picture is with oil prices & gold rising & a dreary outlook for inflation while GDP estimates for 2022 are being reduced, it's difficult for the bulls to make a case for buying stocks. The chart below shows the Dow has been struggling for almost one year.
Dow Jones Industrials
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