Dow dropped 285, decliners over advancers 3-1 & NAZ was off 150. The MLP index was steady in the 224s & the REIT index fell 2+ to the 423s. Junk bond funds drifted lower & Treasuries saw more selling, bringing higher yields. Oil rose 2+ to the 95s on prospects for OPEC oil supply cuts & gold inched up 1 to 1750.
AMJ (Alerian MLP index tracking fund)
Treasury yields were higher as investors digested comments from Federal Reserve Chair Jerome Powell. The yield on the benchmark 10-year Treasury note rose more than 6 basis points to 3.101%, while the yield on the 30-year Treasury bond gained roughly 4 basis points to 3.245%. The yield on the short-term 2-year Treasury note was about 3 basis points higher, trading at 3.429%. Yields move inversely to prices & a basis point is equal to 0.01%. It comes shortly after the Fed's Powell delivered his annual policy speech at Jackson Hole, Wyoming, on Fri. Powell said that the central bank will “use our tools forcefully” to attack inflation that is still running near its highest level in more than 40 years. He acknowledged that rising interest rates will cause “some pain” to households & businesses.
U.S. Treasury yields rise after Powell signals further interest rate hikes
New data indicates a staggering number of American households are currently behind on making utility payments due mainly to soaring energy costs, sparking fears that mass power shutoffs are on the horizon. The National Energy Assistance Directors Association (NEADA) says more than 20M US families are behind on their utility bills, numbers exec director Mark Wolfe believes are "historic." The NEADA chief said what is even more alarming is the surge in the collective amount owed, which sat at roughly $8.1B at the end of 2019 & has now skyrocketed to around $16B. The average delinquent bill climbed from $403 to $792. A primary driver behind the utility debt is a surge in energy prices. The cost of natural gas – used to power homes so folks can keep cool in the summer & warm in the winter – was up 30.5% year-over-year in Jul, according to the Labor Dept. While energy is in high demand in the summer, experts say heating bills this winter will bring more pain. Andrew Lipow, pres of energy consulting firm Lipow Oil Associates wrote this week that "the consumer is going to pay more for their heating bills this winter," adding that "whether they use natural gas or home heating oil, most will have sticker shock." He went on to note that "natural gas futures prices are now more than double what they were a year ago."
More than 20 million households are behind on utility bills
The UN's nuclear watchdog, the International Atomic Energy Agency, is set to visit Ukraine's Zaporizhzhia nuclear power plant this week after months of growing intl alarm over the fighting surrounding the facility, which has been occupied by Russian forces since Mar. Ukrainian forces have begun a southern counter-offensive to retake the Russian-occupied territory of Kherson, Ukraine's southern military command announced. Ukrainians may face their harshest winter in decades as the country's centralized heating network keeps indoor temperatures far colder than normal & plans to switch the heaters on later. Meanwhile, Russian forces continued to shell military & civilian infrastructure in the eastern Donetsk region, killing civilians overnight, the regional governor said. Ukrainian troops are beginning their long-awaited counter-offensive to recapture the southern region of Kherson from Russian forces, Ukraine's military command announced. “Today we started offensive actions in various directions, including in the Kherson region,” the spokesperson for Ukraine’s southern command, Natalia Humenyuk, was quoted as saying. Ukraine's strikes on some of Russia's vital supply routes & bridges in the south, as well as several ammunition depots, had “unquestionably weakened the enemy,” she added, without further elaborating on the details of the counter-offensive.
UN nuclear inspection team headed to Zaporizhzhia plant; Ukraine begins counter-offensive in south
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