Dow was up 229 but off early highs, advancers over decliners 3-1 & NAZ went up 154. The MLP index added 1+ to the 222s & the REIT index gained 4+ to the 429s. Junk bond funds remained higher & Treasuries were being sold in the PM. Oil rose about 1 to the 87x gold was up 8 to 1736 (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)
Gas prices in the US have gone down significantly since the national average hit a high of just over $5 per gallon in Jun, but Treasury Secretary Janet Yellen warns that prices could shoot back up this winter. Yellen was asked whether Americans can expect to see an increase in the coming months. "Well, it’s a risk, and it’s a risk that we’re working on the price cap to try to address," Yellen said, referencing an effort by G7 countries to place a price cap on Russian oil. The secretary explained that with the EU severely cutting back on Russian oil purchases to the point that they "will mostly stop buying" from Moscow, plus a ban on providing services that allow Russia to ship oil via tanker. "It is possible that that could cause a spike in oil prices." Yellen explained that this is part of why G7 nations are proposing a pre-cap on Russian oil. Not only is the cap meant to decrease Russian revenue as Vladimir Putin continues his war in Ukraine, Yellen said, it is also aimed at "maintaining Russian oil supplies that will help to hold down global oil prices." The national average gas price was at a high of approximately $5.02 on Jun 14 & it is currently down to about $3.72 per gallon.
Gas prices could 'spike' again, Treasury Secretary Yellen warns
America's gov debt is on the verge of eclipsing $31T for the first time ever, even as COVID-related federal spending slows. Treasury Dept data released late last week showed the total national debt was $30.9T & on pace to hit $31T as early as this month. The new milestone is just around the corner even as Pres Biden boasts about dramatic drops in the annual budget deficit – the difference between what the gov spends each year & what it collects in tax revenue. In 2020, when COVID led to a sharp economic downturn & a dramatic spike in new federal spending, the gov spent a record-high $3.1T more than the revenue it collected. In 2021, the budget deficit fell just a bit to $2.8T & it's expected to be somewhere in the neighborhood of $1T by the end of the current fiscal year that ends Sep 30. "You know, Republicans talk about being fiscally responsible," Biden said last week at a Dem National Committee reception. "Last year, I reduced the deficit $350 billion. You know how much this year, not counting the Medicaid changes? One trillion seven hundred billion dollars. So I don’t want to hear it from Republicans about fiscal responsibility." But budget experts warn that Biden's boast is a hollow one & that he is simply presiding over a winding-down of emergency spending that is resulting in relatively smaller deficits. David Ditch, a federal budget policy analyst at the Heritage Foundation, said it's a mistake to confuse this wind-down with fiscal responsibility. Ditch said that in the decade before COVID-19, the average annual budget deficit was about $1T & entitlement programs like Social Security, Medicare & Medicaid ensure the deficit will be stuck somewhere around that level. "Right now, there’s no appetite for spending reductions," he said. "We hear absolutely none of that from the left."
US national debt nears $31 trillion and counting
Ukrainian forces “have inflicted a major operational defeat” on Russia, recapturing almost all of the Kharkiv region in a rapid counteroffensive, according to strategists. “The Ukrainian success resulted from skillful campaign design and execution that included efforts to maximize the impact of Western weapons systems such as HIMARS,” the Institute for the Study of War said in its latest assessment of the war in Ukraine, referring to High Mobility Artillery Rocket Systems. Ukraine's forces have been able to recapture dozens of towns & villages in the northeast of the country over the last few days, including the strategically important town of Izyum & lately, Kupiansk. Ukraine's counteroffensive in the northeast came after its much-vaunted counteroffensive in the south around Kherson saw Russia redeploy troops away from the region to defend areas they occupied in the south. So far this month, Ukraine's forces have reclaimed 3K square KMs (around 1,16K square miles) of Russian-occupied territory, according to the commander-in-chief of Ukraine's armed forces, Gen Valeriy Zaluzhnyi. The acting UN human rights chief urged EU member states to avoid “backtracking” on their efforts to develop renewables & energy-efficiency projects at a time when soaring energy prices have prompted some to ramp up use of & searches for fossil fuels. Nada al-Nashif, the acting UN high commissioner for human rights, laid out rights concerns about more than 30 countries, regions & territories including Ethiopia, Ukraine, Myanmar & Haiti in an opening speech to the latest session of the Human Rights Council in Geneva. Beyond expressing concerns about the direct impact of Russia's war in Ukraine, she noted how the war has dented exports of food & fuel from those 2 countries - that are major producers of both - forcing EU states, for example, to scramble for more energy sources. “In the face of soaring energy prices which threaten to impact the most vulnerable as winter approaches, some EU member states are turning to investments in fossil fuels infrastructure and supplies,” al-Nashif added.
Oil futures climbed,
with the US benchmark marking its highest settlement month to date. The bullish outlook is pushing the envelope are faltering
Iranian nuclear discussions, broad based recovery in the US capital
markets & resilient strength in US wage growth. Oct WTI crude climbed 99¢ (1.1%) to settle at $87.78 a barrel. Prices for the front-month contract marked
their highest finish since Aug 31.
U.S. oil futures settle at highest price of month so far
Gold futures settled at their highest in 2 weeks, as the $ hit a 2-week low & Treasury yields pull back, helping to bolster demand for precious metals ahead of tomorrow's critical inflation update. Gold futures for Dec climbed $12 (0.7%) to settle at $1740 per ounce, with the most actively traded contract settling at the highest price since Aug 29. Analysts attributed the moves higher for gold to the weakness in the $, as well as lower Treasury yields. Gold prices are posting good advances boosted by another sharp decline in the $ index, which hit a 2-week low overnight. The ICE US Dollar Index, a gauge of the $'s strength against a basket of rivals, was off 0.8% to 108.15, trading around its lowest levels in 2 weeks.
Gold prices settle at their highest in 2 weeks
Dow Jones Industrials
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