Dow jumped 575 closing at the highs, advancers over decliners 6-1 & NAZ rose 390 The MLP index gained 4+ to the 221s & the REIT index roared ahead 10+ to the 444s. Junk bond funds rose along with the stock market & Treasuries continued a little higher. Oil was fractionally higher in the 114s & gold crawled up 3 to 1851 (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)
Despite prices at the pump hitting a record high, an American Automobile Association executive argued that gas costs won't deter travelers this Memorial Day weekend. "Certainly there will be some behavioral changes, but people are going to travel… they are not willing to give up the respite that they deserve," AAA Senior VP of Travel Paula Twidale said. Twidale noted some examples of the "behavioral changes" would be not renting a car for an extended period or booking "all-inclusive accommodations." You may see behavioral changes like being a little bit more flexible, trying to save money, choosing to travel with a buddy… saving up about 20% to book that information in advance to get the better deal," she suggested. The national average of one gallon of gas was $4.59. Last year it was priced at $3.04 -- $1.55 less, as Americans continue to feel the pain at the pump with record gas prices. Meanwhile, 39.2M Americans are traveling this holiday weekend, as airports are "packed" & drivers are continuing to hit the road. When asked if Americans have reached a point of "demand destruction" with travel Twidale responded, "I don't think it’s demand destruction yet. Certainly not." "39.2 million is 92% of 2019, and 2019 was a banner travel year… more people may start to opt to do a little less car driving and opt to take an air trip because of the… energy saved at that point in time." "Look at airfare right now. Lowest airfare is about up 6% from last year." Twidale argued the "immense demand" for travel comes amid a "supply and demand issue" due to low inventory. "We're encouraging people to book early, be flexible, book ahead, do all the things you can do," she suggested.
High gas prices won't deter Memorial Day weekend travel, AAA exec says
The US housing market may finally be cooling off. Nearly one in 5 home sellers dropped their price during the 4-week period ending May 22 — the highest rate since 2019, according to a weekly Redfin study. The same 4-week period saw 13% fewer “homes for sale” browser searches on Google, & a 12% year-over-year drop in home tours & other related services from Redfin agents — the largest such decline since Apr 2020. Meanwhile, the Market Composite Index, which tracks mortgage purchase applications, dropped 1.2% during the week ending May 20. And sales of new homes are at their lowest level since Apr 2020, down 16.6% from Mar, according to a Census Bureau report published Tues. Taken together, the numbers suggest that increasing homeownership costs have shrunk the pool of potential homebuyers, forcing sellers to lower their prices. The interest rate for a 30-year fixed-rate mortgage has surged by nearly 2% since Jan, increasing monthly mortgage costs by 42.1% year over year as of May 22. Sellers are still asking for a lot of money: The median asking price for a home climbed to a record-setting $418K, up 17.8% year over year. But the rate of price growth has been relatively low over the past 4 weeks, suggesting a possible plateau.
Home sellers are lowering their prices at the fastest clip since 2019
Gold prices finished a touch higher as investors weighed data that showed hot US inflation cooled its pace last month. Gold for Jun rose $3 to close at $1851 an ounce. The US inflation rate, as measured by the personal-consumption expenditures index, rose just 0.2% in Apr for its smallest monthly increase in a year & a ½, due largely to a decline in gas prices. While gas prices subsequently rebounded, there were other hints that a surge in inflation might be abating. The rate of core PCE inflation in the past year, the Fed's preferred measure, slowed over the past year to 4.9% from 5.2%, in a 2nd straight monthly decline. The last time the core rate saw back-to-back declines was in the first few months of the pandemic in early 2020. Gold's gain today came amid a slightly softer tone to the $.
Gold ends higher as key inflation gauge shows signs of cooling
Oil prices rose, closing out the week with gains ahead of the Memorial Day holiday weekend, the start of peak US demand season & as European nations negotiate over whether to impose an outright ban on Russian crude oil. Brent crude rose $2.03 (1.7%) to settle at $119.43. West Texas Intermediate (WTI) crude rose 98¢ (0.9%) to settle at $115.07 a barrel. For the week, Brent rose 6% while WTI gained 1.5%.
The University of Michigan consumer sentiment index for the US fell to
59.1 in May of 2022, the lowest since Aug 20122, from 65.2 in Apr &
below markets forecasts of 64, as Americans remained concerned over the
inflation.
The decline in consumer confidence during May is troubling for the bulls' case. But American will be traveling this weekend. That means spending which is good for the economy. The Dow was up an impressive 1950 this week, following its long losing streak. In May it's up about 200 for a good recovery. Have a good weekend!! 😀
Dow Jones Industrials
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