Dow advanced 301, advancers over decliners 4-1 & NAZ added 121. The MLP index went up 2+ to the 223s & the REIT index was up 4+ to the 429s. Junk bond funds rose along with stocks & Treasuries were purchase pushing yields lower (more below). Oil was up 1 to the 87s & gold gained 12 to 1740.
AMJ (Alerian MLP index tracking fund)
Environmental groups lambasted Dems' side deal to green-light a West Virginia natural gas pipeline, saying such a provision would be a "betrayal." The groups argued that the Mountain Valley Pipeline (MVP), a 304-mile West Virginia-to-Virginia natural gas pipeline that is under construction, would mark a setback for federal environmental & endangered species protections. The $6.6B pipeline is mostly completed, but has faced a series of permitting setbacks from federal agencies and courts. Sen Joe Manchin agreed to support the Inflation Reduction Act, the $739B climate & tax package Pres Biden signed last month, in exchange for Dem's support of a permitting reform deal that would make it easier to approve energy projects including fossil fuel pipelines. Under the deal, which is expected to be included in the upcoming gov funding bill, the MVP pipeline would be given broad federal approval. "Members of both parties who claim to believe in property rights must come out against the abuses that MVP and other pipelines impose on landowners," David Sligh, the conservation director for Wild Virginia which has fought the pipeline, said. "Many people have had their greatest assets devalued or destroyed by the unjust practice of giving profit-making corporations the power of eminent domain."
Dems approve pipeline side deal – and green groups aren't happy
Bond yields were down slightly as markets awaited data on consumer inflation expectations. The yield on the benchmark 10-year Treasury note was 3 basis point lower, trading at 3.29% & the yield on the 30-year Treasury bond was down about 2 basis points at 3.439%. The yield on the 2-year Treasury traded 3 basis point lower at 3.536%. Yields move inversely to prices, and a basis point is equal to 0.01%. Markets will be looking to the New York Fed's Survey of Consumer Expectations, which outlines what consumers expect overall inflation & prices to look like for food, housing, gas & education. It also offers a view into earnings growth & employment prospects. Recent evidence shows the pace of inflation is receding, but consumers are still struggling; according to personal finance website WalletHub, almost 1/3 of Americans are struggling to pay their energy bills.
Treasury yields edge lower ahead of U.S. consumer expectations report
Lower gas prices are raising optimism that inflation is on the decline, according to a survey from the New York Federal Reserve. Respondents to the central bank’s Aug Survey of Consumer Expectations indicated they expect the annual inflation rate to be 5.7% a year from now. That’s a decline from 6.2% in Jul & the lowest level since Oct 2021. 3-year inflation expectations dropped to 2.8% in Aug from 3.2% the previous month. That was tied for the lowest level for that measure since Nov 2020. The lowered outlook came amid a tumble in gasoline prices from more than $5 a gallon earlier in the summer, a nominal record high. The current national average is about $3.71 a gallon, still well above the price from a year ago but about a 26¢ decline from the same point in Aug. Along those lines, consumers now expect gas prices to be little changed a year from now. Food prices are expected to continue to climb, but the 5.8% anticipated increase a year from now is 0.8 percentage point lower than it was in Jul. Rents are projected to increase 9.6%, but that is a 0.3 percentage point drop from the Jul survey. Those numbers come as the Fed is using a series of aggressive interest rate increases to battle inflation that is still running close to a more than 40-year high. The central bank is widely expected to approve a 3rd consecutive 0.75 percentage point increase when it meets again next week.
Falling gas prices are raising hopes that inflation is slowing, New York Fed survey shows
Dow Jones Industrials
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