Dow went up 178 (200 below early highs), advancers over decliners 4-1 & NAZ gained 142. The MLP index climbed 4+ to the 214s & the REIT index rose 2+ to the 485s. Junk bond funds went up & Treasuries saw more buying bringing lower yields (more below). Oil jumped 6+ to go back over 100 & gold soared 32 to 1977.
AMJ (Alerian MLP index tracking fund)
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Inflation accelerated to a new 4-decade high in Mar as supply chain constraints, the Russian war in Ukraine & strong consumer demand fueled rapid price gains that wiped out the benefits of rising wages for many Americans. The Labor Dept said that the consumer price index – which measures a bevy of goods including gasoline, health care, groceries & rents – rose 8.5% in Mar from a year ago, the fastest pace since 1981, when inflation hit 8.9%. Prices jumped 1.2% in the one-month period from Feb, the largest month-to-month jump since 2005. The forecast expected the index to show that prices surged 8.4% in Mar from the previous year & 1.2% on a monthly basis. Core prices, which exclude more volatile measurements of food & energy, climbed 6.5% in Mar from the previous year – up from the 6.4% increase recorded in Feb. It was the steepest 12-month increase since 1982. Price increases were widespread: Energy prices rose a stunning 11% in Mar from the previous month & are up 32% from last year. Gasoline, on average, costs 48% more than it did last year after rising 18.3% in Mar on a monthly basis as the Russian war in Ukraine fueled a rapid increase in oil prices. The Mar inflation data is the first to capture the full effect of the European war, which sent gas prices in the US to the highest since 2008. Food prices have also climbed 8.8% higher over the year & 1% over the month, with the largest increases in cereal & bakery products (10%), poultry, fish & meat (13.8%), fresh fruits & vegetables (8.1%) & eggs (11.2%). Rising inflation is eating away at strong wage gains that American workers have seen in recent months: Real average hourly earnings decreased 0.8% in Mar from the previous month, as the 1.2% inflation increase eroded the 0.4% total wage gain, according to the Labor Dept. On an annual basis, real earnings fell 2.7% in Mar.
Inflation hits 40-year high as gas and food prices surge
Covid-19 cases are rising again in the Northeast, due in part to the omicron’s highly contagious BA.2 subvariant — but the White House's new Covid czar isn’t too worried about it just yet. “I am not overly concerned right now,” Dr. Ashish Jha said. Jha, the dean of Brown University's School of Public Health, was named the White House’s Covid-19 response coordinator last month. He acknowledged the growing number of Covid cases in parts of the country: 27 states, plus DC have experienced a jump in new cases over the past 7 days, according to data from Johns Hopkins University. But, Jha said, the data doesn't point toward another full-on Covid surge because hospitalizations are currently “the lowest they have been in the entire pandemic.” The US is currently averaging just over 1300 hospitalizations per day, which is indeed a pandemic-era low point. Of course, that’s not a guarantee: Jha urged people to remain “careful,” & watch how the subvariant evolves as it spreads. But, he said, he doesn't think “this is a moment where we have to be excessively concerned.” Some experts say the US is well-suited to handle a rise in Covid cases right now because a majority of Americans currently have some level of Covid antibodies in their systems. According to a Centers for Disease Control & Prevention survey of blood donor samples, conducted in Dec & updated in Feb, an estimated 95% of Americans ages 16 & older have developed identifiable Covid antibodies.
White House Covid czar Dr. Jha: 'Not overly concerned' about rising BA.2 cases
The 10-year Treasury yield retreated from a 3-year high as investors digested the latest inflation report. The yield on the benchmark 10-year Treasury note dropped 6 basis points to 2.70% after the rate topped 2.82%, its highest point since 2018 earlier in the session. The yield on the 30-year Treasury bond moved 6 basis points lower to 2.79%. The consumer price index, which measures a wide-ranging basket of goods & services, jumped 8.5% from a year ago on an unadjusted basis, slightly above the estimate for 8.4%. Investors seemed to take solace from the core CPI, excluding food & energy, which increased 6.5% year over year, in line with the expectation. Month to month, core CPI rose 0.3%, lighter than the 0.5% expectation. These inflation readings are key in determining how aggressive the Federal Reserve will be in tightening monetary policy. Rising prices & a more hawkish Fed have given rise to investor fears that a recession may be on the horizon, as seen in the inversion of bond yields. Investors have been selling out of shorter-dated Treasuries in favor of longer-dated debt, indicating their concerns about the near-term strength of the economy, though rates had reverted today.
10-year Treasury yield pulls back from 3-year high after core CPI comes in lighter than expected
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