Dow was up 96 after starting in the red, advancers modestly ahead of decliners & NAZ went up 9. The MLP rose 1 to 210 & the REIT index was off 4+ to the 487s. Junk bond funds drifted lower & Treasuries continued to be sold. Oil hardly budged in the 96s & gold added 13 to 1936 (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)
Congress sent legislation to Pres Biden's desk to suspend normal trade relations with Russia & Belarus. The Senate voted unanimously, 100-0 & the House followed with a 420-3 vote. A rare issue of agreement between the 2 parties, the bill was initially approved by the House last month, with a vote of 424-8. If Biden signs it into law, it would enable him to impose greater damage to the Russian economy thru higher tariffs on Russian goods like steel & aluminum. The bill allows for the restoration of normal trade relations with either country if Pres Biden certifies to Congress that he has determined that they agreed to withdraw from Ukraine & that there is a cease-fire that Ukraine has accepted. Biden must also certify that the country – Russia and/or Belarus – "poses not immediate military threat of aggression" to any NATO members & that they are recognizing the Ukrainian people's right to have their own independent gov. Should Biden submit such a certification to Congress, lawmakers would have 90 days to respond with a joint resolution of disapproval. Additionally, the bill calls for the US Trade Representative to "use the voice and influence of the United States" at the World Trade Organization (WTO) to condemn the invasion of Ukraine, encourage other countries to suspend trade concessions with Russia & Belarus, contemplate additional measures with the goal of suspending Russia's participation in the WTO & halting Belarus's ability to join the organization.
Congress votes overwhelmingly to suspend normal trade relations with Russia
The UN suspended Russia from its seat on the Human Rights Council as the world calls out atrocities committed in Ukraine. US Ambassador to the UN Linda Thomas-Greenfield introduced the proposal earlier in the week following accusations that Russian troops tortured & killed Ukrainian civilians in Bucha, a suburb near Kyiv. The bodies were discovered after Moscow withdrew its troops from Bucha. Ukrainian Pres Volodymyr Zelenskyy described the aftermath, which he saw firsthand on Mon, as a “genocide” & accused Russia of war crimes. The Kremlin has previously described its military actions in Ukraine as a “special operation” & has denied targeting civilians. Thomas-Greenfield said that Russia's membership on the council hurts its credibility, “undermines the entire U.N. and it is just plain wrong.” The resolution to strip Russia of its seat on the Human Rights Council passed with 93 votes in favor, 24 against & 58 abstentions. Members of the UN Human Rights Council, which are expected to uphold high human rights standards, are elected to serve for 3 years & are not eligible for immediate reelection after 2 consecutive terms.
UN votes to remove Russia from Human Rights Council
The FDA has until the early summer to decide whether vaccine makers need to change existing Covid shots to target different virus variants to avoid another possible surge in cases this fall, according to a top official at the drug regulator. Dr Peter Marks, who leads the Food & Drug Administration (FDA) office responsible for vaccine safety & efficacy, told the agency's advisory committee yesterday that a decision would need to be made by Jun in order to have shots available in the fall. Marks said the US could face another wave of infection at that time because the virus will continue to evolve as immunity from the current vaccines wanes. Robert Johnson, a senior official at the Biomedical Advanced Research & Development Authority, said at the meeting that the biggest challenge in updating the shots will be coordinating across the vaccine makers to make sure they are focusing on the correct Covid variants. Pfizer (PFE), Moderna (MRNA) & other vaccine makers are conducting clinical trials on omicron-based shots. However, the companies aren't currently coordinating on their new vaccine formulas, according to Jerry Weir, head of the FDA's division of viral products. Several FDA advisory panel members said public health authorities need to develop a unified approach across vaccine makers, similar to their work updating the flu vaccine to target new strains every year. Dr Paul Offit, an FDA committee member, said the CDC needs to take the lead in deciding when the vaccines are no longer effective against severe illness, so the FDA & National Institutes of Health can then work with the companies to determine the best path forward on a new shot. “At some level, the companies kind of dictate the conversation here,” Offit said. “You often hear that the company now has an omicron-specific vaccine, or vaccine they can now link with the influenza vaccine. It shouldn’t come from them, it really has to come from us.”
U.S. has until June to decide whether we need new Covid shots for this fall
With inflation threatening to weigh on consumer demand, particularly among low-to-middle-income consumers, Macy's (M) says more shoppers could be faced with a consequential choice: Head to the mall or take a summer vacation. “The
biggest challenge that we’ve had in terms of thinking about managing
through the beginning of 2022, is where is the demand going to come
from,” Macy's CFO Adrian Mitchell said. “We
do believe the demand is out there,” he said. “We do believe that the
consumer is going to be spending. But are they going to be spending on
discretionary items that we sell, or are they going to be spending on an
airline ticket to Florida, or travel, or going out to restaurants
more?” Those questions are creating a level of unpredictability
that Macy's must plan carefully around, Mitchell said. For example, the
retailer doesn't want to order too many beach cover-ups or suitcases, if
that's not what shoppers are going to splurging on during the summer. The department store chain is far from alone in navigating this tricky dynamic, with some signs of a recession emerging. The bond market also
recently flashed a classic recession indicator, in which the 2-year Treasury yield rose above the 10-year note. Those
pressures are spurring expectations that some Americans, especially
those in lower-wage jobs, will be forced to choose between, say, a
long-awaited vacation or concert ticket over a new swimsuit or handbag. The stock fell 77¢.
If you would like to learn more about Macy's click on this link:
club.ino.com/trend/analysis/stock/M_aid=CD3289&a_bid=6ae5b6f
Macy’s warns that inflation-squeezed consumers may choose travel over shopping
Gold futures posted their first gain in 3 sessions to mark their highest settlement in in a week. Gold for Jun rose $14 (0.8%) to settle at $1937 an ounce — the highest most-active contract finish since Mar 31. Prices settled yesterday at $1923, the lowest since Mar 29. Gold ended lower yesterday, then saw volatile electronic trading after minutes from the Federal Reserve's Mar meeting — moving higher, then lower as the minutes offered insight into the central bank's plans to shrink its balance sheet & affirmed that policy makers are prepared to hike interest rates in outsize ½-percentage-point increments in their effort to rein in inflation. Gold suffered as long-dated Treasuries sold off, pushing the yield on the 10-year note to its highest since Mar 2019. Higher yields on gov debt & other bonds raises the opportunity cost of holding nonyielding assets like gold. Overall, gold has held up well despite a backup in yields so far this year. The yellow metal remains up by 5.7% YTD, with support tied in part to demand for haven assets sparked by Russia's invasion of Ukraine, as well as concerns about the war's ability to drive up already surging inflation. Gold is seen as a hedge against inflation.
Gold prices post highest settlement in a week
Total consumer credit increased $41.8B in Feb, up sharply from a rise of $8.9B in the prior month, the Federal Reserve said. That translates into an 11.3% annual rate in Feb, up from a 2.4% gain in the prior month. The forecast expected a $15B gain. Revolving credit, like credit cards, rose at a 20.7% rate in Feb after 4% gain in the prior month. Nonrevolving credit, typically auto & student loans, rose 8.4% after 1.9% growth rate in the prior month. This category of credit is much less volatile. It only fell briefly at the start of the pandemic before returning to steady growth. The Fed data does not include mortgage loans, which is the largest category of household debt. Economists will be watching consumer spending carefully in coming months to see how households fare as the Fed raises interest rates & tries to move away from its easy money policy stance.
U.S. consumer credit growth soars in February
Oil futures suffered a 3rd straight loss, with global Brent crude prices briefly dipping under $100 a barrel for the first time in 3 weeks, a day after the announcement of a coordinated release of crude from strategic reserves by member countries of the Intl Energy Agency. West Texas Intermediate crude for May lost $1.34 (1.4%) to $94.88 a barrel after losing 5.6% yesterday. Jun Brent crude, the global benchmark, was down $1.69 (1.7%) at $99.38 a barrel. Front-month prices haven't touched lows under $100 since Mar 17. The Intl Energy Agency, whose members include most major oil-consuming nations including the US, announced a coordinated release of 120M barrels of crude, ½ of which would come from the US as part of that country's previously announced 180M barrel release over the next 6 months. Uncertainty surrounding energy demand has also been a focus for the market.
Oil prices suffer a third straight decline
After starting the day in the red, buyers returned in the PM to give it a sold gain. Traders are still mulling over the Fed minutes, trying to figure out what their comments mean for the stock market going forward. One thing that is all but certain is that interest rates will rise & that suggests tough going for stocks.
Dow Jones Industrials
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