Dow declined 401, decliners over advancers better than 4-1 & NAZ pulled back 327. The MLP index fell 3+ to 210 & the REIT index sank 8+ to the 339s. Junk bond funds drifted lower & Treasuries were sold, taking the yield on the 10 year Treasury over 4%. Oil dropped 3+ to the 85s & gold tum,bled 30 to 1646 (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)
Treasury Secretary Janet Yellen said that fighting record-high
inflation remains a top priority for the Biden administration, noting
the US has "more work to do" in cooling out-of-control consumer
prices. "Yesterday’s CPI report shows that we have more work to do to get
price increases under control," Yellen said at
the annual IMF-World Bank meeting. "While some leading indicators show
hopeful signs, working families are continuing to feel the pain of high
inflation." Her comments come just one day after the Labor
Dept reported the consumer price index, a broad measure of the
price for everyday goods including gasoline, groceries & rents, rose
0.4% in Sep from the previous month. Prices climbed 8.2% on an
annual basis. Those figures were both higher than the 8.1%
headline figure & 0.2% monthly increase forecast, a worrisome sign for the Federal Reserve as it seeks to cool price gains & tame consumer demand with an aggressive interest rate hike campaign. In an even more troubling development that suggests underlying inflationary pressures
in the economy remain strong, core prices – which strip out the more
volatile measurements of food & energy – climbed 0.6% in Sep
from the previous month. From the same time last year, core prices
jumped 6.6%, the fastest since 1982.
Yellen says inflation fight remains top priority for Biden after hot September report
Wells Fargo (WFC) is seeing historically low loan
delinquencies, but it made a decision to build up reserves as the
economy slows, cutting into its Q3 profits. In
the qtr EPS was 85¢, down from $1.17
during the same qtr a year ago. After adjustments, EPS was $1.30, topping analysts estimates. Revenue rose to $19.5B vs $18.8B expected The
company's performance was significantly hurt by operating losses of $2B (45¢ per share) related to litigation, customer
remediation & regulatory matters. WFC
is operating under a series of consent orders tied to its 2016 fake
accounts scandal, including one from the Fed that caps its asset growth. In
the latest period, the bank set aside $784M for credit losses
after reducing its provisions by $1.4B a year ago. The provision
included a $385M increase in the allowance for credit losses
reflecting loan growth & a less favorable economic environment. “Wells Fargo is positioned well as we will continue to benefit from
higher rates and ongoing disciplined expense management,” CEO Charlie Scharf said. “Both consumer and
business customers remain in a strong financial condition, and we
continue to see historically low delinquencies and high payment rates
across our portfolios.” The stock rose 99¢.
If you would like to learn more about WFC, click on this link:
club.ino.com/trend/analysis/stock/WFC?a_aid=CD3289&a_bid=6ae5b6f7
Wells Fargo WFC Q3 2022 earnings
Applications for US unemployment insurance increased to a 6-week high, driven in part by a jump in Florida claims in the aftermath of Hurricane Ian. Initial unemployment claims rose by 9K to 228K last week, according to the Labor Dept. The estimate called for 225K new applications. The 4-week moving average, which smooths out volatility from week to week, increased to 211K. Continuing claims were little changed at 1.37M in the latest week. On an unadjusted basis, initial claims increased by 32K to 199K last week. The advance was led by a 10K jump in Florida after Hurricane Ian destroyed homes & businesses across the region. Despite a recent decline in job openings & a rise in layoffs in sectors including technology & financial services, employers continue to hire at a strong pace. The US added more than 260K jobs in Sep while the unemployment rate retreated to a 5-decade low.
US Jobless Claims Reach Six-Week High
Gold futures marked their lowest settlement of the month, with prices down more than 3% for the week, as a 75 basis point interest rate rise by the Federal Reserve next month looked to be locked in the wake of higher than expected consumer price inflation in Sep. Gold for Dec fell $28 (1.7%) to settle at $1648 an ounce, with the most-active contract at ending at its lowest since Sep 27. Prices posted a weekly decline of 3.5%. Gold continues to trade in a strong inverse relationship with the powerful US $ index. The ICE US Dollar index was up 0.8% at 113.27, trading up 0.4% for the week. Gold ended lower yesterday but off session lows in a whipsaw session that saw US stocks snap back from sharp losses in volatile activity across financial markets after the Sep consumer-price index came in hotter than expected, cementing expectations for a 75 basis point rise in the fed-funds rate in early Nov. Investors also penciled in a higher peak for interest rates as the Fed battles stubborn inflation. The University of Michigan survey revealed that consumer sentiment edged up to 59.8 in Oct from 58.6 in the previous month, while consumer expectations for inflation over the next year rose to 5.1% from Sep's one-year low of 4.7%.
Gold logs lowest finish month to date, down more than 3% for the week
Oil futures ended lower for the session, contributing to a weekly loss of nearly 8% for US benchmark crude prices. With many economists now forecasting a recession as their base case outlook for 2023, demand estimates for everything from energy products to industrial metals are taking a hit. Oil has given back roughly ½ of the Oct gains this week thanks to the negative shift in policy & economic outlooks denting demand expectations, but with OPEC+ getting more serious with price supportive policy measures this month. US benchmark West Texas Intermediate crude for Nov fell $3.50 (3.9%) to settle at $85.61 a barrel.
Oil futures finish lower for the session and week
Dow Jones Industrials
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