Dow was off 113 (session low), decliners over advancers 3-2 & NAZ dropped 292. The MLP index was steady in the 218s & the REIT index fell 2+ to the 483s. Junk bond funds continued to be sold & Treasuries were very heavily sold, taking the yield on the 10 year Treasury up an enormous 14 basis points to 2.83%. Oil rebounded 2+ to the 106s & gold retreated 9 to 1974 after a recent run (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)
As Dems continue to blame oil execs for record-high gas pirces thru price-gouging, one CEO is calling them out on their bluff. "Washington keeps working against us, not with us in terms of increasing supply," Canary CEO Dan Eberhart said. "We've got a good economy. Demand is strong," Eberhart continued. "We need more supply to bring the price down, and the administration just keeps putting roadblocks in our way to do that." Both futures for oil benchmarks Brent & US West Texas Intermediate finished yesterday at 4% higher, with the spike in prices coming as worries of more disruptions to global supply continue to rattle the market. But Dems insist surging oil prices are due to price-gouging by Big Oil themselves, calling producers like Chevron (CVX) & Exxon Mobil (XOM), both Dow stocks, to testify on the issue in front of a House committee earlier this month. "I don't think that's true at all," Eberhart countered. "We're bidding for work against our competitors and other companies… We've got all kinds of supply chain issues, and inflation in our supply chain as well." Eberhart argued Pres Biden's outsourcing for natural gas should be reversed, as well as other energy policies, to fix the critical shortage. "The problem is not enough supply, and the administration keeps doing things around that," the CEO scolded, "not working with the industry to increase supply." "The SEC compliance issue on climate disclosure is an additional regulatory burden; moratorium on drilling on federal lands is an additional burden," Eberhart listed, "canceling the pipelines Keystone, Dakota Access and there's six others, it's a regulatory burden." If Biden doesn't give the green light for the expansion of US oil production, Eberhart warned high gas prices will stick around – & Americans will react at the polls. "The Biden administration has sat on, through the Federal Energy Regulatory Commission, six LNG export terminals, which could help us send natural gas to Europe instead of them buying Russian gas," the CEO stressed. "I think the decisions are dumb," he added, "and don't take my word for it. Ask voters in November. I think we're going to see the answer."
Democrats keep working against oil companies, ‘not with us’: Big Oil CEO
Dem Sen Kyrsten Sinema poured cold water this week on Pres Biden's renewed plan to overhaul the nation's tax code & dramatically raise rates on corps & ultra-wealthy Americans. Biden unveiled a budget blueprint in late Mar that included several tax
increases that would largely be borne by wealthy inverters & the top sliver
of US. households, in the form of a steeper corp rate, a modified
wealth tax & a global minimum tax. The proposal came months after his
signature Build Back Better agenda collapsed when Sen Joe Manchin withdrew his support. But
his latest plan has already elicited skepticism from Sinema, who
previously said she would not support a spending package that included
tax increases on corporations & high earners – a stance that she
reiterated this week. "I am unwilling to support any tax policies that would put a break on
that type of economic growth or stall business and personal growth for
America's industries," Sinema said during a speech. "I retain that position. Everyone knows it. Not
everyone's happy about it, but that's my position." The
pres laid out a series of tax increases, including a Billionaire
Minimum Income Tax that would establish a 20% minimum tax on all US
households worth more than $100M, about 0.01% of Americans. Under
the proposal, the top sliver of US households would be required to
pay a tax rate of at least 20% on their full income, or the combination
of wage income & whatever they made in unrealized gains. If a
billionaire is not paying 20% on their income, they will owe a "top-up
payment" that makes up the difference to meet the new minimum. Biden also proposed raising the corp tax rate to 28% from 21% as
part of his budget request & pitched a global minimum tax that's
designed to crack down on offshore tax havens. Synema said that she would once again oppose any increases to the corp tax
rate, almost certainly dooming its prospects in the 50-50 Senate. "If conversations do start again, which I'm not sure if they will or
not, I will be bringing that position back into the negotiations," she added. "You all know, the entire country knows, that I am opposed to
raising the corporate income tax. That was true yesterday, that is true
today." Other parts of Biden's proposal are also likely dead on arrival.
Sinema dashes Biden's hope for major tax overhaul
US consumer sentiment rebounded unexpectedly in early Apr from a decade low with the strong job market lifting the outlook for wage growth & a fall in gasoline prices from the previous month's record high helping to cap expectations for a further acceleration in inflation, a survey showed. The University of Michigan's Consumer Sentiment Index rose to 65.7 on a preliminary basis this month from a final reading of 59.4 in Mar, which had been the lowest since 2011. That topped expectations for a reading of 59 & helped snap a skid of 3 consecutive monthly declines. The increase came almost entirely from a jump in the expectations index to 64.1 on a preliminary basis from a Mar final level of 54.3. Assessments of current conditions were little changed. Consumers' estimates for the rate of inflation over the next year were unchanged at 5.4%, which is the highest since 1981 & signals that consumers have some faith that measured inflation will recede from a 4-decade high of 8.5% hit in Mar. And, for a 3rd straight month, they estimated inflation over the next 5 years at 3.0%. The Federal Reserve last month lifted interest rates for the first time since 2018 & officials there have signaled an aggressive campaign of rate hikes in the months ahead to rein in inflation. The improvement in expectations was powered by a 29.4% jump in the economic outlook for the year ahead & a 17.2% increase in personal financial expectations, survey Director Richard Curtin said. "A strong labor market bolstered wage expectations among consumers under age 45 to 5.3% - the largest expected gain in more than three decades, since April 1990," Curtin added. He also said consumers estimated a negligible change in gas prices in the year ahead after the previous month's prediction that they would rise by nearly 50¢ a gallon a year out.
U.S. consumer mood brightens in early April, survey shows
Gold futures posted their first loss in 6 sessions, but
ended higher for the week with precious metal continuing to find support
a hedge against inflation. Inflows into global gold ETFs totaled 269 metric tons, valued at $17B in Q1 — the highest quarterly total since Q3- 2020, the World Gold Council reported earlier this
month. Gold for Jun fell $9 (0.5%) to settle at $1974 an ounce, after
logging its 5th straight gain yesterday to post its highest close
since Mar 11. The cost of wholesale goods & services jumped 1.4% in Mar & over the past year, wholesale prices have climbed 11.2%, US gov said. Overall, gold has been buoyed by haven-related flows as the
Russia-Ukraine war appears set to drag on. Hot inflation readings in the
US & Europe have also underpinned the metal, though some analysts & economists see signs that price pressures may finally be peaking
after US data showed consumer inflation ran at its hottest since 1981
in Mar. Today, US data showed a bigger-than-expected rise in weekly jobless claims of 18K to 185K. Sales at US retailers rose a mild 0.5% in Mar & the cost of imported goods such as oil & food rose a sharp 2.6% in Mar. The University of Michigan's gauge of consumer sentiment in Apr, meanwhile, rose to 65.7 from the Mar reading of 59.4.
Gold marks first loss in 6 sessions, but posts a gain for the week
Oil futures finished higher after a report said EU officials were drafting a measure to ban Russian oil. Th's gain contributed to a nearly 9% climb in crude prices for the holiday-shortened week. West Texas Intermediate (WTI) crude for May rose $2.70 (2.6%) to settle at $106.95 a barrel. Jun Brent crude, the global benchmark, added $2.92 (2.7%) to $111.70. Both Brent & WTI ended at their highest since Mar 30, based on front-month contracts. A report said that EU officials were drafting a ban on oil imports from Russia. The EU has issued various sanctions on Russia, but has been reluctant to ban Russian oil given that some of its members are highly dependent on those imports. EU officials & diplomats say the EU is moving toward adopting a phased-in ban designed to give Germany & other countries time to arrange for alternative suppliers. The EU took a similar approach to its ban on Russia coal earlier this month. EU member states would negotiate the oil embargo after the final round of the French elections on Apr 24. Oil prices ended the week higher, despite monthly reports from OPEC & the Intl Energy Agency that both cut forecasts for growth in global demand for crude. The IEA also raised its outlook for non-OPEC supply, putting the oil market on track to be balanced in H2-2022 even without the release of strategic reserves. However, analysts said worries about oil supplies remained in focus as traders eyed developments in the Russia-Ukraine war.
Oil futures finish higher on potential for EU ban on imports of Russian oil
The bears had the upper hand today, taking stocks lower. Topping the negative news was the rise of the yield on the 10 year Treasury to go over 2.8%. This is a major kick in the head the economic recovery does not appreciate. Dow finished the week down 270, where it was last May. Have a very good holiday.
😀
Dow Jones Industrials
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