Dow finished down 98 with buying in the last hour, decliners over advancers better than 3-1 & NAZ dropped 166. The MLP index remained in the 213s & the REIT index dropped 5 to the 444s. Junk bond funds fluctuated & Treasuries saw more selling bringing higher yields. Oil rose 1+ to 110 & gold climbed 7 to 1883 (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)
World food prices fell in Apr after a large jump in Mar, according to the UN Food & Agriculture Organization (FAO). The agency reported that there were "modest declines" in the prices of vegetable oils & cereals. The FAO Food Price Index, which tracks monthly changes in the intl prices of a basket of commonly-traded food commodities, was down 0.8% from the all-time high reached in Mar & averaged 158.5 points last month, though it remained 29.8% higher than in Apr 2021. The FAO Vegetable Oil Price Index decreased 5.7% in Apr, as demand rationing pushed down prices for palm, sunflower & soy oils. The FAO Cereal Price Index declined by 0.7 points in Apr, pushed down by a 3% decline in world maize prices. "The small decrease in the index is a welcome relief, particularly for low-income food-deficit countries, but still food prices remain close to their recent highs, reflecting persistent market tightness and posing a challenge to global food security for the most vulnerable," FAO chief economist Máximo Torero Cullen said. The FAO said intl wheat prices were still affected by the continued blockage of ports in Ukraine, as well as concerns over US crop conditions, but were also tempered by larger shipments from India & higher-than-expected exports from Russia. Intl rice prices rose by 2.3% from their Mar levels. The FAO slightly cut its projection of world wheat production in 2022 to 782M tons, from 784M last month. The FAO Sugar Price Index increased by 3.3%, the meat price index rose 2.2% from the previous month & the dairy price index climbed 0.9%. In separate estimates on cereal supply ½ demand, forecasts point to a likely 1.2% decline in world trade cereal in the 2021-2022 marketing year, compared with the previous year. "The decline is associated with maize and other coarse grains, while trade volumes for rice are predicted to grow by 3.8% and that for wheat by 1.0%," the agency said. The world cereal utilization for the 2021-2022 period is projected to increase by 0.9% from the previous year.
Food prices decrease after surging to records in March
The Centers for Disease Control & Prevention (CDC) is investigating 109 cases of severe hepatitis, including 5 deaths, the public health agency said. More than 90% of the children were hospitalized & 14% required liver transplants, according to the CDC. More than ½ of the kids had a confirmed adenovirus infection. However, public health officials said they don't know yet if adenovirus is the actual cause. Adenovirus is not a known cause of hepatitis in otherwise healthy children, though it has been linked to the illness in kids with weak immune systems. The cases under investigation were found across 25 states & territories & occurred over the past 7 months. The CDC has not documented a significant increase in hepatitis cases in kids or liver transplants, but that's based on preliminary data & could change. However, the UK -- which first alerted the world to the issue -- has documented a significant increase. Covid-19 vaccination is not the cause of the illnesses, the CDC officials said. The children had a median age of 2 years, which means most of them were not eligible to receive the vaccine. The CDC issued a nationwide health alert in late Apr about a cluster of severe hepatitis cases among 9 children in Alabama. The World Health Organization is also closely monitoring cases of severe hepatitis in children globally.
CDC investigating 109 cases of severe hepatitis in children, including 5 deaths
Russia is looking to ease strains on its market caused by massive intl sanctions & gas boycotts by opening the Nord Stream 2 pipeline domestically. The
West heavily relied on the threat of shutting down the controversial
pipeline in an attempt to preserve Ukraine's sovereignty in the lead-up
to the invasion. Moscow dismissed the threats & on Feb 21 announced its recognition
of the "independence" of the separatist regions of Luhansk & Donetsk
in eastern Ukraine. Germany the next day blocked the certification
of the $11B pipeline & just 2 days later Russian Pres
Vladimir Putin announced his "special military operation" in Ukraine. Russian-owned energy giant Gazprom has since decided to use part of the pipeline to boost domestic consumption. "Reformatting
the Nord Stream 2 infrastructure will be a significant help for the
Russian market and gasification of the regions," Russian state-owned media said. The publication added that this decision would create "opportunities for launching new gas projects" throughout Russia. The deputy head of the National Energy Security Fund, Alexei Grivach,
said the move does not mean Russia is abandoning the Nord Stream 2
pipeline but said, given the uncertainty of the project, it will utilize
the pipeline as it can now. Nord Stream 2 would have fueled gas
from Russia to Europe via Germany through a pipeline that cut under the
Baltic Sea – bypassing a pipeline that was once heavily relied on that
runs into Ukraine. According to the US Energy Information Agency, Russia in 2021 was the largest natural gas-exporting country in the world. The
US & European allies went after Russian oil exports following its
deadly invasion into Ukraine & vowed to cut oil ties with Moscow. The
US blocked all future purchases of Russian oil, while several
European nations made moves to completely sever oil purchases by the end
of 2022. The EU, Russia's biggest energy importer, further proposed this week to ban all Russian oil from Europe. But even with sanctions & boycotts on its number-one moneymaker,
Russia is still expected to reap a substantial income boost to its
energy export profits this year.
Putin turns to Nord Stream 2 to ease pain of sanctions on economy
Gold prices closed higher, as investors absorbed fresh data showing stronger-than-expected US employment data, but swept to a 3rd straight week of declines. Jun gold futures added to gains after the jobs data, then pared those back. The contract rose $7 to settle at $1882 per ounce. Still, the precious metal lost 1.5% for the week, booking a 3rd straight week of declines. That was its longest weekly stretch of losses for the most-active contract since the Dec 2021. US stock indexes remained under pressure today while the $ headed for a 0.6% weekly rise. The benchmark 10-year Treasury rate climbed to 3.12%. A strong $ & higher Treasury yields can dull demand for gold & other nonyielding assets. In addition to the week's Fed rate hike, the Bank of England also raised interest rates for the 4th time, while offering a bleak economic forecast that triggered a plunge in the £ & surge in the $. The European Central Bank is also expected to raise rates in Jul. The Bank of England's gloom contrasted with the Fed’s position that it can keep a recession at bay.
Gold finishes higher Friday, but books 3rd straight week of losses
Oil logs weekly gain as supply worries dominate, gasoline closes at record high
The Dow was volatile & in the red all day. A rally was attempted at midday but that did not last until the last hour of trading. In a week of unusually wild trading, the Dow was down only 78. Not bad all considered.
Dow Jones Industrials
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