Dow jumped 599 (near the highs), advancers over decliners 2-1 & NAZ shot up 367. The MLP index fell 3+ to the 193s & the REIT index added 2+ to the 457s. Junk bond funds crawled higher & Treasuries saw modest selling. Oil dropped 7+ to the 95s & gold sank 37 to 1923 (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)
Retail sales in the US are expected to grow 6-8% this year, as Americans shift more of their spending to restaurants & trips to cope with sticker shock at the grocery store & gas station, the National Retail Federation (NRF) said. That would total $4.86-4.95T in retail sales, with some of the sales gains coming from inflation-fueled prices. Those sales numbers exclude automobile dealers, gas & restaurants. “Consumers do want to spend and do have the ability to spend, but we expect there will be a shift back to services from goods,” the group's chief economist Jack Kleinhenz said. The NRF delivered its annual outlook as inflation and the Russian invasion of Ukraine send food & gas prices higher & raise questions about whether shoppers will pull back. Retailers are also starting to lap challenging comparisons. A year ago, Americans were receiving stimulus checks from the gov & putting those extra $s toward purchases. The forecast is significantly slower than the 14% annual growth rate in 2021, which was the highest in more than 20 years. Yet the group's 2022 outlook is above the 10-year, pre-pandemic growth rate of 3.7%. Kleinhenz said he does not expect inflation to cool until 2023, but said the retail industry should benefit from declining unemployment & increasing wages. He said longer lasting inflation, additional waves of Covid & an escalating crisis in Ukraine could jeopardize the forecast, however. “Given the recent geopolitical disruptions, we will likely see some resetting of the world economy and these ripples will make their way to the United States,” he added.
Retail sales will grow this year, but at a slower rate than in 2021, trade group says
China's worst Covid-19 outbreak since the initial wave of the pandemic worsened today with a major factory city ordering production halts. Recent outbreaks in 28 provinces have infected more than 15K people & stem primarily from the highly transmissible omicron variant, China's National Health Commission said China has 31 province-level regions. Although the northern province of Jilin accounts for most of the cases, the latest outbreak has hit major cities such as the financial center of Shanghai and technology manufacturing hub Shenzhen. Dongguan city in the southern province of Guangdong ordered employees of businesses to work from home & locked down residential areas, permitting only necessary activities such as buying groceries & taking virus tests. The city took a targeted approach to production halts. In industrial parks that haven't reported cases, businesses can maintain basic production under stringent virus control measures. Factory workers often live in dormitories near their workplace. In areas reporting local cases, businesses must stop production. The measures took effect today & will last for about a week, until Mar 21. Guangdong province produced about 24% of China’s exports in 2020, according to the latest available official data accessed thru Wind Information. The database showed that among cities its size, Dongguan was the 5th-largest contributor to China's GDP last year, with 1.09T yuan ($170B) in output. Dongguan reported nine confirmed Covid cases & 46 asymptomatic cases yesterday. The nearby tech hub of Shenzhen, also in Guangdong province, reported 60 new cases, including asymptomatic ones. The total local case count yesterday in mainland China included 3507 new confirmed Covid cases & 1647 asymptomatic ones, mostly in the northern province of Jilin. That’s more than double from a day earlier. Today China's bureau of statistics spokesperson downplayed the impact of the Covid-related restrictions on economic activity, after reporting better-than-expected data for Jan & Feb.
China’s Covid spike worsens: Dongguan factory center locks down, new cases top 3,500 nationwide
Intel (INTC), a Dow stock, will invest over €33B ($36B) into boosting chipmaking
across the EU as the bloc looks to become more self-reliant
when it comes to semiconductors. The chipmaker will build 2 new factories in Madgeburg, Germany, as part of the
investment. The factories will use the most advanced chip manufacturing
technology as part of an effort to produce chips that are 2 nanometers
or less in width. Construction
is set to begin in H1-2023 & production will come
online in 2027, providing there are no regulatory issues. The
firm said Germany is an ideal place to establish the new “Silicon
Junction” mega-site because of the talent & infrastructure on offer,
as well as the existing ecosystem of suppliers & customers. Some
€17B will be invested in the German facilities, INTC said,
adding that it expects the investment to create 7K construction jobs
over the course of the build & 3K permanent jobs at INTC. Olaf
Scholz, chancellor of Germany, said that the fabs will
help rebalance global silicon capacity & create a more resilient
supply chain. They will be backed with Bs of €s in state aid. The stock rose 41¢.
If you would like to learn more about INTC click on this link:
club.ino.com/trend/analysis/stock/INTC_aid=CD3289&a_bid=6ae5b6f
Intel commits $36 billion to making chips in Europe
Gold futures fell sharply to mark their lowest finish in
nearly 2 weeks as investors assessed the latest US data on inflation & looked to the Federal Reserve which is expected to raise benchmark
interest rates this week. The central bank is expected to announce tomorrow the first
increase in fed fund futures rates since 2018 as policy makers attempt
to combat US inflation at a 40-year-high, even though Russia's
invasion of Ukraine could hurt global economic growth. Russia & Ukraine also continued talks to end their hostilities in
Eastern Europe, after a 4th round of negotiations yesterday ended
without any clear agreement. Apr gold fell $31 (1.6%) to settle at $1929 an ounce, the lowest most-active contract finish since Mar 2. Gold prices continued to trade lower after data today showed that
wholesale prices rose a sharp 0.8% in Feb, but came in below the forecast of a 0.9% gain. Separately, the New York
Fed's Empire State business conditions index plunged 14.9 points to
negative 11.8 in Mar, the regional Fed bank said. Meanwhile, the Fed is widely expected to raise interest rates by 25
basis points tomorrow, commencing what is expected to be a series of
hikes to borrowing costs to quell inflation.
Oil futures tumbled below $100 a barrel to log their lowest settlement since the initial days of the Russian invasion of Ukraine nearly 3 weeks ago, officially entering a bear market with prices suffering a loss of more than 20% from their recent highs. West Texas Intermediate crude for Apr fell $6.57 (6.4%) to settle at $96.44 a barrel. The settlement was the lowest since Feb 28, 4 days after Russia's invasion of Ukraine. May Brent crude the global benchmark, fell $6.99 (6.5%) to end at $99.91 a barrel — the lowest since Feb 25. Both WTI & Brent entered a bear market, down more than 20% from their Mar 8 settlements, which were the highest since 2008. China’s southeastern manufacturing hub of Shenzhen, near Hong Kong, has been locked down due to a COVID outbreak, in addition to a COVID lockdown in the northeast of the country. Negotiations between Ukraine & Russia also continued after no breakthrough was reached yesterday, as Russian forces continued to pound Ukraine. Apart from the humanitarian catastrophe, the conflict has sparked concerns over global economic growth & sent commodities prices surging across the board. OPEC+ said it was leaving its economic forecasts& its estimates of 2022 crude-oil demand & supply growth “under assessment” as it warned that inflation stoked by the Russia-Ukraine war could undercut oil consumption. Oil prices slid yesterday on reports the US could lift sanctions on Venezuelan oil which could ease some supply worries as the war between Ukraine & Russia stretches to a third week.
Oil enters a bear market on China lockdowns, as OPEC leaves demand forecast ‘under assessment’
Dow Jones Industrials
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