Dow finished up 249, but below early highs, advancers over decliners 2-1 & NAZ dropped 166. The MLP index went up 4+ to the 225s & the REIT index jumped again, up 8+ to 501. Junk bond funds were little changed & Treasuries saw significant buying, reducing yields. Oil was flattish in the 102s & gold slid back 4 to 1954 after recent strength (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)
2 mutated strains of the highly transmissible omicron variant of Covid-19 are the main culprits behind a “rising tide” of infections in New York, Gov Kathy Hochul said. “We did identify two subvariants of omicron, which is driving the current spike in cases,” Hochul added. “We’re taking this very seriously,” the governor said. “You don’t know, every single variant that comes, is it going to be worse than the last one?” But Hochul stressed that state health experts have seen no evidence that the new strains are more severe than others & so far they are not expecting a repeat of the massive, omicron-fueled surge in cases last winter. “We’re not panicking about this, we’re not changing, but we also want to make sure that we’re smart about this,” she continnued. New York's data currently shows 40 Covid cases per 100K people, which Hochul said is a more informative measure to follow than the total infection rate. The governor noted that while that figure was “quite a bit lower” in recent weeks, the current level is significantly below the winter peak of 461 cases per 100K people. “We’re a long way from that peak, but I don’t even want to get close to that peak,” she said. Across the US, cases are nowhere near the pandemic peak of 808K new cases a day that were reported in mid-Jan. New infections are currently averaging about 35K a day, according to Johns Hopkins University. While that is a fraction of the peak, cases have started edging up nationwide in recent weeks & some areas of the country are seeing localized surges. Statewide, there are about 1400 people hospitalized with Covid, Hochul said. Near the pandemic’s peak, 12K people in New York were hospitalized with the virus. The number of hospitalizations, which have been a key data point in the state's response to the health crisis, are even more crucial to monitor, with the prevalence of at-home testing for Covid clouding total testing figures. She added that about ½ the cases of people hospitalized with Covid are people who were admitted for other reasons & then tested positive once they arrived.
NY Gov. Hochul warns of ‘rising tide’ of Covid cases as omicron subvariants drive infection surge
The Treasury Dept announced that it expanded its wide raft of sanctions to include businesses & individuals that are helping Russia blunt the impact of economic penalties imposed on Moscow. Treasury officials said the department is now targeting Russian commercial bank Transkapitalbank, as well as a network of more than 40 people including oligarch Konstantin Malofeyev it believes are helping the Kremlin skirt a wave of economic punishments. The Biden administration also said it's cracking down on companies operating in Russia's virtual currency mining industry, including Bitriver, that help the country monetize its exports & other natural resources. “Treasury can and will target those who evade, attempt to evade, or aid the evasion of U.S. sanctions against Russia, as they are helping support Putin’s brutal war of choice,” Under Secretary for Terrorism & Financial Intelligence Brian Nelson said. “The United States will work to ensure that the sanctions we have imposed, in close coordination with our international partners, degrade the Kremlin’s ability to project power and fund its invasion,” he added. As a Russian, privately owned bank, Transkapitalbank has offered to help Moscow avoid detection and sanctions-derived restrictions through a proprietary internet-based banking system, known as TKB Business. That system, Treasury officials said, is an alternative communication channel to the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network, including for the purpose of processing $ payments for sanctioned clients.
U.S. sanctions individuals, entities helping Russia blunt effects of economic penalties
People concerned about getting Covid can still protect themselves by properly wearing masks, like an N95 or KN95, even if nobody else around is, Dr Scott Gottlieb said. Gottlieb's comments come 2 days after a federal judge in Florida nullified the Biden administration’s Covid mask mandate for public transportation, including airlines. Many mask rules for other settings have already been relaxed. “If you have a good-fitting mask, a high-quality mask on and you’re wearing it well, you’re going to afford yourself a high degree of protection,” he added. “So people who feel vulnerable, if they continue to do that, are going to be able to protect themselves in that setting even if other people aren’t wearing masks,” argued Gottlieb. In response to the Florida ruling, the Transportation Security Administration indicated it will not enforce the pandemic policy; major US airlines also said they'd no longer require masks.
Dr. Scott Gottlieb: Covid masks work even if others around you aren’t wearing one
Gold futures ended lower for a 2nd straight session, extending their pullback from the 5-week high seen earlier this week. Gold for Jun fell $3 to settle at $1955 an ounce, the lowest most-active contract finish since Apr 11. Analysts said talk of peak US inflation & slowing economic growth may be taking some steam out of precious metals, which have benefited from their reputation as an inflation hedge. The IMF yesterday cut its forecast for global growth to 3.6% in 2022 from its Jan estimate of 4.4%, citing inflation and the Russia-Ukraine war as factors.
Gold ends lower, extending its pullback from 5-week high
Oil futures ended on a mixed note, with US prices up slightly & global prices down for the session. West Texas Intermediate crude for May rose 19¢ to end at $102.75 a barrel on the
contract's expiration day. The new
front month Jun contract settled at $102.19 up 14¢. Concerns over a slowdown in energy demand & uncertainty over if &
when Europe will ban Russian oil pressured prices, but the market also
found support from an 8M-barrel weekly drop in US crude
supplies. US oil prices settled higher as the Energy Information
Administration (EIA) reported that US crude inventories
fell by 8M barrels last week. That was the
largest weekly decline in a year. The EIA was expected to show crude inventories up by 2.2M barrels.
The moves comes on the 2 year anniversary when WTI crude futures settled at a negative $37.63 a barrel. when the market took a hit from a glut of supplies built up on the back of a price war between Saudi Arabia & Russia, a drop in demand due to the pandemic & a contract expiration.
Oil prices end mixed as traders weigh demand concerns and a weekly drop in U.S. crude supplies
San Francisco Federal Reserve Pres Mary Daly acknowledged that a near-certain series of interest rate hikes over the coming months could tip the economy into a shallow recession, though she noted that isn't her expectation. Responding to the worst inflation the US has seen in more than 40 years, the central bank official said she foresees “an expeditious march” thru the year toward benchmark interest rates that would neither stimulate nor repress growth — the “neutral” rate, in Fed parlance. “Accounting for the risks of being too fast or too slow, I see an expeditious march to neutral by the end of the year as a prudent path,” she said. The moves, Daly said, would help slow down an overheated economy that now has consumer price inflation running at an 8.5% annual pace. She cited research from Princeton economist & former Fed vice chair Alan Blinder, who asserted that in 11 previous Fed hiking cycles, 7 “were followed by a mild recession or none at all — basically a smooth landing,” she added. “Now, since I’m in Las Vegas, I will offer that I think those are pretty good odds.” Asked later whether she considered a mild recession to be the equivalent of a soft landing or acceptable outcome, Daly said her outlook is for the economy to slow to “something that looks like below-trend growth, but not tip into negative territory, but could potentially tick into negative territory.” That likely would mean a shallow recession, unlike those associated with, for instance, the financial crisis of 2008 or the stagflation days of the late 1970s & early ’80s, when then-Chairman Paul Volcker jacked up rates so much that the economy fell into a double-dip recession.
Fed’s Daly says economy can handle rate hikes, but a mild recession is possible
Comments above about a possible recession took the Dow lower in last 2 hours of trading. However, the bulls returned in the last hour to limit some of the damage done by the selling. Meanwhile safe haven gold remains popular with nervous investors.Dow Jones Industrials
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