Dow dropped 87, decliners modestly ahead of advancers & NAZ was off 40. The MLP index gained 5+ to the 215s & the REIT index fell 1 to the 481s. Junk bond funds continued in demand & Treasuries were heavily bought, reducing yields. Oil shot up 6+ to go back over 100 & gold jumped 23 to 1968 (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)
Airfare is surging as higher fuel prices & strong travel demand drive up the cost of flights. Consumers spent $8.8B on domestic airline tickets last month, up 28% compared with Mar 2019, before the pandemic, while fares surged 20%, according to data from the Adobe Digital Economy Index. But bookings only rose 12%. Higher fares are one of the latest examples of inflation, which is hitting consumers at gas stations, supermarkets & in the housing market. Airline execs have been confident that they could pass along the bulk in the surge in jet fuel to travelers, who so far appear willing to shell out more for travel after 2 years of Covid lockdowns. Delta Air Lines (DAL) execs will kick off airline reporting season before the market opens tomorrow & provide an outlook on travel demand & fares. For travel from Jun - Aug, online spending is up 8% compared with 2019 & bookings are up 3%.
Airfare surged 20% over pre-pandemic levels in March as inflation hit vacations
Social Security beneficiaries started 2022 with a 5.9% cost-of-living adjustment to their monthly checks, the highest increase in about 40 years. But as inflation climbs with each month, the buying power of those benefit increases has diminished. The Consumer Price Index for all Urban Consumers, or CPI-U, rose 8.5% from a year ago, according to Mar data released by the Bureau of Labor Statistics. Meanwhile, another measure used by the Social Security Administration to calculate the annual cost-of-living adjustment, or COLA — the Consumer Price Index for Urban Wage Earners & Clerical Workers, or CPI-W — shot up 9.4% over the last 12 months. The average retiree benefit in 2022 rose to $1656 from $1564, a $92 boost per month, according to The Senior Citizens League. If those benefits kept up with inflation, the average retiree benefit instead would have to be $1711 based on Mar data, an increase of $147 from the average retiree benefit for 2021, according to The Senior Citizens League. So far this year, average retirement benefits have a shortfall of $162, according to the group's calculations.
Record-high inflation could mean a bigger Social Security cost-of-living adjustment in 2023
Pres Biden is visiting corn-rich Iowa to announce he'll suspend a federal rule preventing the sale of higher ethanol blend gasoline this summer as his administration tries to tamp down prices at the pump that have spiked during Russia's war with Ukraine. Most gasoline sold in the US is blended with 10% ethanol. The Environmental Protection Agency will issue an emergency waiver to allow widespread sale of 15% ethanol blend that is usually prohibited between Jun 1 - Sep 15 because of concerns that it adds to smog in high temperatures. Senior Biden administration officials said the move will save drivers an average of 10¢ per gallon at 2300 gas stations. Industry groups say most of those stations are in the Midwest & the South, including Texas. Biden announced the move at a biofuel company in Menlo, west of Des Moines. Iowa is the country's largest producer of corn, key to producing ethanol.
Biden waiving ethanol rule in bid to lower gasoline prices
Oil futures climbed 6%, with US & global benchmark prices posting their highest finish in a week, as China somewhat eased its COVID-19 lockdown of Shanghai. West Texas Intermediate crude for May rose $6.31 (6.7%) to settle at $100.60 a barrel, following a decline of 4% yesterday. Front-month prices haven't settled above $100 since Apr 5. Jun Brent, the global benchmark, added $6.16 (6.3%) to $104.64 a barrel, the highest finish in a week. Brent crude yesterday closed below $100 for the first time since Mar 16. The recent pullback in crude prices, which on Fri. saw a 2nd consecutive weekly fall, has been blamed in part on a China's lockdown of Shanghai, with a population of more than 25M due to a COVID outbreak. Reports of shortages of food & other necessities have been rising as the strict lockdown continued. However, Shanghai on said it would lift some restrictions on neighborhoods where no new infections had been reported over the past 2 weeks. OPEC+ lowered its forecast for 2022 growth in oil demand to 3.7M barrels a day, down 500K barrels a day from its previous forecast. The cut was “mostly reflecting” the organization's lowered 2022 economic outlook, OPEC said in its monthly report.
Oil settles at highest price in a week as China eases some lockdown restrictions in Shanghai
Gold futures rose for a 4th straight day to their highest
settlement in a month, as US data showed annual inflation climbed
above 8% in Mar for the first time in 40 years. The US rate of inflation in the past year
moved up to 8.5% in Mar from 7.9%, the gov said. The
last time inflation breached 8% was in 1982. The consumer price
index jumped 1.2% last month — the largest monthly gain since Hurricane
Katrina in 2005 — driven by the higher cost of gasoline, food &
housing. Gold for Jun rose $27 (1.4%) to settle at
$1976 an ounce on Comex after eking out a 3rd straight gain yesterday. Based on the most-active contract, prices marked their highest
finish since Mar 16. Gold gained ground yeterday as Treasury yields pulled back, with the
10-year yield trading at 2.708%, after touching highs above 2.8% for
the first time since Jan 2019. A fall in yields can lower the
opportunity cost of holding nonyielding assets like gold.
Gold tallies a 4th straight session gain and highest finish in a month
Dow Jones Industrials
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