Dow tumbled 581, decliners over advancers better than 5-1 & NAZ was off 407. The MLP index edged higher to 211 & the REIT index dropped 7+ to the 346s. Junk bond funds slid lower along with stocks & Treasuries continued to be sold, driving yields higher. Oil gained 3+ to the 92s & gold retreated 11 to 1709 (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)
EU leaders struggled to bridge significant differences over a natural gas price cap as winter approaches & Russia's war in Ukraine fuels a major energy crisis, driving up prices for consumers & businesses. The price cap is one of several measures the 27-nation bloc is preparing to contain an energy crisis in Europe that some fear could lead to rolling blackouts, factory shutdowns & a deep recession over the winter in economies already weakened by the coronavirus pandemic. Russia has reduced or cut off natural gas supplies to 13 EU member nations as European govs bolster their support for Ukraine in the form of weapons, money, aid & sanctions on Moscow. The potential for shortages has led to surging gas & electricity prices that could climb higher as demand peaks during the cold months. Standing in the way of an agreement was the simple fact that each member country depends on different energy sources & suppliers, & they're struggling to see eye-to-eye on the best way ahead. Latvian Prime Minister Krisjanis Karins summed up the challenge for the EU as it considers a possible gas-price ceiling. "A price cap on gas, if that could be achieved, would be grand — with the caveat that we cannot endanger security of supply," Karins said. "So we cannot set the price so that no one would sell gas into Europe." Belgian Prime Minister Alexander De Croo said he hoped the "last hurdles" to a price cap would be overcome at the meeting, but also that leader should agree on a joint path of action to send 2 important messages. "One to the energy markets, to make it clear we no longer accept these prices, we will not continue to pay this market manipulation. Secondly, an important signal to our populations, to our companies, that we are going to tackle the problem at the root," he added.
EU leaders struggle to bridge gas price cap divide
Covid vaccines prevented at least 330K deaths & nearly 700K hospitalizations among adult Medicare recipients in 2021, the Health & Human Services Department (HHS) reported. The reduction in hospitalizations due to vaccination saved more than $16B in medical costs. A 10% increase in vaccination coverage was associated with a 12% & 15% decline in the chances of hospitalization & death, respectively, among adult Medicare recipients. The HHS study looked at county-level data on vaccination rates & changes in hospitalization & death among a sample of Medicare beneficiaries ages 18 & older. The overwhelming majority of Medicare recipients, 86%, are ages 65 & older. Select groups under 65, such as people with disabilities, are also eligible for coverage. People who are not seniors make up about 14% of Medicare beneficiaries. The elderly face the highest risk of severe disease & death from Covid. Nearly 93% of people ages 65 & older in the US have received 2 doses of a Covid vaccine, according to the Centers for Disease Control & Prevention (CDC). Despite the vaccine coverage within the highest risk group, more than 300 people are still dying each day on average from Covid, while more than 3300 are hospitalized daily, according to CDC data. Dr Ashish Jha, who heads the White House Covid task force, said 70% of Covid deaths are among people ages 75 & older. “This is unacceptable, particularly because we can now prevent almost every Covid death in the country with vaccines and treatments that we have,” Jha added.
Covid vaccines prevented at least 330,000 deaths among U.S. seniors in 2021
Pres Biden warned that Russian Pres Vladimir Putin’s threat of using tactical nuclear weapons is the biggest since the Cuban missile crisis, delivering his most blunt assessment yet about the prospect of nuclear war. Putin has repeatedly warned the West that any attack on Russia could provoke a nuclear response. It comes as Ukrainian forces reclaim dozens of settlements in the south of Ukraine, adding to a growing list of military setbacks for the Kremlin. Ukrainian Pres Volodymyr Zelenskyy said the country's forces have recaptured 500 square kilometers (193 square miles) in the Kherson region alone since the start of Oct. Britain's Defense Ministry says more than ½ of Ukraine's fielded tank fleet could consist of captured Russian vehicles. Russian Pres Vladimir Putin vowed to “stabilize” the situation in the 4 regions of Ukraine whose annexation he formalized on Wed, as Ukrainian advances exposed the Kremlin's struggle to match its political theater with the reality on the battlefield. “We proceed from the fact that the situation will be stabilized, we will be able to calmly develop these territories,” the Russian leader said. In a last symbolic step, Putin signed the decrees to legislate the absorption of Ukraine's Donetsk, Luhansk, Zaporizhzhia & Kherson regions.
U.S. says Putin’s nuclear threats risk ‘Armageddon’; Ukraine recaptures 193 square miles in a week
Gold prices softened in the wake of the Sep jobs report that still show signs of rising inflation. Gold futures for Dec fell $11 (0.7%) to $1709 per ounce. Prices for the most-active contract trade more than 2% higher for the week, Gold declined after US jobs data showed the labor market remains tight, dashing hopes the Federal Reserve will become less aggressive with rate hikes. Nonfarm payrolls rose 263K last month, slightly higher than estimates, while the unemployment rate declined. The $ & Treasury yields climbed following the data release, putting pressure on gold, which fell as much as 0.6% before paring some of the loss. The data will keep the Fed on a hawkish track as it tries to cool the US labor market, which has helped drive inflation to the highest in decades. The central bank's relentless rate hikes have weighed on gold throughout the year. The ICE US Doll, a gauge of the greenback’s strength against a basket of rivals, rose 0.1% to 112.39, while 10-year Treasury yields added 5 basis points to 3.867%.
Gold, silver soften after September jobs report, but head for back-to-back weekly gains
Oil prices rose, continuing an upward trend after OPEC+ this week agreed to tighten global supply with a deal to cut production targets by 2M barrels per day (bpd). The cut from OPEC+ is its largest reduction since 2020 & comes ahead of a EU embargo on Russian oil. The decision would squeeze supplies in an already tight market, adding to inflation. Brent crude futures rose 19¢ to $94.61 a barrel & US WTI crude futures rose 24¢ to $88.69 a barrel, after earlier hitting $89.37 per barrel, the highest since Sep 14. Pres Biden expressed disappointment yesterday over OPEC+'s plans & officials said the US was looking at all possible alternatives to keep prices from rising. Some of those options include releasing more oil from the Strategic Petroleum Reserve or exploring a curb on energy exports by US companies.
The week (& month) started strong, but enthusiasm faded & trimmed those gains. Today's reports did not get good grades & stocks were sold. For the week, Dow was up only 500 & that came off a low at the start of 2022. Oil prices are heading north gain with WTI up 15 from recent low at 78. The outlook remains gloom with investors sense a recession coming soon.
Dow Jones Industrials
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