Dow dropped 158, advancers over decliners 3-2 & NAZ slid back 37. The MLP index drifted lower by 1 to the 209s & the REIT index added 1+ to the 488s. Junk bond funds rose in price & Treasuries were being purchased again bringing lower yields. Oil sank 5+ to the 102s (more below) & gold went up 6 to 1944.
AMJ (Alerian MLP index tracking fund)
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A key measure of annual inflation that is closely watched by the Federal Reserve is running at the hottest pace in nearly 4 decades as widespread
supply disruptions, extraordinarily high consumer demand & worker
shortages fuel rapidly rising prices. Core
prices, which exclude the more volatile measurements of food &
energy, soared by 5.4% in the year thru Feb, according to the
personal consumption expenditures (PCE) price index data which will be released tomorrow. That measurement is the Fed's preferred gauge to track
inflation; it marks the 11th consecutive month the measure has been
above the central bank's target range of 2%. Including
food & energy, the inflation gauge jumped 6.4% in Feb from the
previous year, the strongest gain since 1982. In the one-month period fro Jan to Feb, core prices soared 0.4%, while the headline gain shot up by 0.6%. The inflation
spike largely reflected surging energy costs, which rose 25.7% from a
year ago, & food costs, which were up 8% over that same time period. The
PCE report was accompanied by data on household spending, which showed
that consumer spending rose faster than expected last month, climbing by
2.7%. The spending increase followed a 2.1% jump in Dec. The
data is further evidence of a spike in prices illustrated by a separate
measure – the Consumer Price Index – which showed inflation rose by
7.9% in Feb from the previous year, a fresh 40-year high.
Key Fed inflation gauge jumps – marking biggest gain since 1983
Oil producer group OPEC+ decided to stick to its strategy of gradually reopening the taps following reports the US is considering the largest ever draw from its emergency oil reserve. The influential energy alliance of OPEC & non-OPEC partners swiftly agreed to raise its output targets by 432K barrels per day from May 1. Energy analysts had widely expected OPEC+ to rubber-stamp another modest monthly increase despite sustained pressure from top consumers calling for the group to pump more to cool soaring oil prices & aid the economic recovery. Oil prices have rallied to a near all-time high on concerns about Russian supply disruptions after the US & intl allies imposed a barrage of economic measures against the Kremlin as a result of its unprovoked onslaught in Ukraine. Russia is the world's 3rd-largest oil producer, behind the US &Saudi Arabia, & the world's largest exporter of crude to global markets. It is also a major producer & exporter of natural gas. It is against this backdrop that the US is considering a plan to cool soaring crude prices by releasing up to 180M barrels from the country's strategic petroleum reserve (SPR). Pres Biden is expected to deliver remarks later today. The move would mark the 3rd time the US has tapped its SPR in 6 months & the 2nd since Russia's invasion of Ukraine on Feb 24. OPEC Secretary-General Mohammad Barkindo encouraged members of the group, which includes Russia, to “stay the course” & “remain vigilant and attentive to ever-changing market conditions.”
OPEC+ sticks to modest oil output hike as U.S. considers unprecedented release of reserves
Russian forces are continuing to hold their positions & carry out shelling strikes around Kyiv, according to British intelligence, despite promises from Moscow this week to scale back its military activity near the Ukrainian capital. The head of the UK's intelligence & security agency said that Russian Pres Vladimir Putin has “massively misjudged” the situation in Ukraine, & that the Russian leader's advisors were afraid to tell him the truth about what was happening on the ground. Meanwhile, Ukrainian officials said that Russia had agreed to allow a humanitarian corridor to open in the besieged city of Mariupol, which has been largely destroyed by Russian shelling & is facing a severe humanitarian crisis. Germany & France rejected demands by Russia that European countries pay for its gas in ruble as an unacceptable breach of contracts, adding that the maneuver amounted to “blackmail.” Germany Economy Minister Robert Habeck said he had not yet seen a new degree signed by Pres Vladimir Putin mandating gas payments in rubles, adding that Germany was prepared for all scenarios, including a stoppage of Russian gas flows to Europe. French Finance Minister Bruno Le Maire said France & Germany rejected Russia’s demand. Russia's attempt to divide Western allies by requiring gas payments in rubles has failed, Habeck said, adding that Western allies are determined to not be “blackmailed” by Russia.
Russia holds onto positions near Kyiv; UK spy chief says Putin ‘massively misjudged’ war
The stock market is holding better than expected after the dreary inflation news. And the war just drags on. Dow is still up 1200 in Mar after a dreary start this year.Dow Jones Industrials
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