Dow went up 100 closing at session high, advancers over decliners 3-2 & NAZ added 34. The MLP index continued in the 226s & the REIT index rose 7+ to the 371s. Junk bond funds fluctuated & Treasuries continued to be sold, bringing higher yields. Oil retreated 1+ to 81 & gold fell 6 to 2009.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
With budgets strained, some Americans are embracing risky financial behaviors to make ends meet, a recent survey said. High inflation & interest rates pushed 35% of Americans to drain cash or consider draining cash from emergency savings & 26% have skipped or are considering becoming delinquent on their credit cards, loans or other debt, according to a survey from fintech company Achieve. When broken down by generation, Gen Z & Millennials were most likely to consider higher-risk options. 28% of Gen Z have already or are considering bankruptcy as an option to deal with rising costs. Additionally, 39% said they either missed payments or were considering it when it came to paying credit cards, loans & other debt 34% of Millennials said the same when it came to paying their debt obligations. "Many money-saving strategies, like cutting back on discretionary spending, consolidating debt and taking on extra work to earn more money, are prudent choices in any economic climate," Achieve Cofounder and Co-CEO Andrew Housser said. "But other tactics, like borrowing from retirement savings, pawning valuables and missing debt payments, often mean risking your long-term financial security." The ongoing interest rate increases mixed in with the banking crisis were equivalent to 2-3 25 basis-point rate hikes & could lead to more significant credit tightening, making it harder for consumers to borrow, Moody's Analytics Chief Economist Mark Zandi said. "The Fed got it wrong when they kept rates too low for too long coming out of the pandemic," Zandi said in reaction to the Fed's interest rate announcement. "It's unfair to be too critical given the uncertainties created by the pandemic. And then there is the Russian invasion. But they now risk raising rates too high too fast. That will be on them."
Inflation and rising costs pushes Americans to make risky financial choices
House Speaker Kevin McCarthy warned that America's debt is unsustainable & a threat to the nation, hitting out at Pres Biden for refusing to negotiate on cost-cutting measures. "Without exaggeration, American debt is a ticking time bomb that will detonate unless we take serious, responsible action," McCarthy added. "Yet how has President Biden reacted to this issue? He has done nothing." McCarthy said he met with Biden on Feb 1 to discuss budget cuts & said the pres agreed at the time to negotiate in good faith, but the House speaker has not heard back from the White House since. "The longer President Biden waits to be sensible to find an agreement, the more likely it becomes that this administration will bump into the first default in our nation's history," McCarthy said. "Addressing the debt requires us to find common ground and reduce spending." He then announced that the GOP-led House will vote on raising the debt limit, currently at $31, in coming weeks to avoid a default, but said the legislation would include provisions rolling federal spending back to fiscal 2022 levels & limit subsequent spending increases to no more than 1% per year over a decade. The White House said ahead of McCarthy’s address that "a speech isn’t a plan," dismissing his overture & re-upping pressure on the Rep leader to approve a debt ceiling increase with no strings attached.
House Speaker Kevin McCarthy warns America's debt is 'a ticking time bomb'
The pres of the ECB said that with rising political pressure on countries to choose between the US & China, the result of such a thing would lead to less economic growth across the world & should be avoided by "all means." ECB Pres was asked about the increasing pressure on to side economically with either the US or China, & whether the US is losing its global influence. "There is clearly a competition between these large economies," Lagarde said, referring to the 2 nations. Lagarde, a French politician & lawyer who previously served as managing director of the IMF from 2011-2019, said she hoped that the US & China can engage in dialogue & warned that trade should not be confrontational. "All these relationships, whether it's trade whether it's politics whether it's economic development or whether it's financial stability, it is a two-way street," she added. "We cannot ignore each other, and trade should not be confrontational. … Conflict is not unavoidable." Escalating tensions between WC & Beijing over Taiwan have highlighted China's relationship with Europe & with countries in other parts of the world. French Pres Emmanuel Macron visited Beijing last week accompanied by European Commission President Ursula von der Leyen, just days after Spanish Prime Minister Pedro Sanchez. The French leader also made comments during the visit that could have strained ties with the US & exposed divisions within the EU. "Being a friend doesn’t mean that you have to be a vassal," Macron said, repeating a remark from his trip that alarmed some European partners. "Just because we’re allies, it doesn’t mean (that) we no longer have the right to think for ourselves." Meanwhile, Lagarde said the outcome of choosing a side would lead only lead to economic downsides – one with still uncertain consequences. "The decoupling and the sort of bipolarization of the world would lead to less economic growth, less prosperity in the world, more poverty across the world," Lagarde said. "I think this is something that should be by all means avoided."
Choosing between US and China would result in ‘more poverty,' Lagarde says
Gold prices declined, briefly slipping below the key $2000-an-ounce threshold for the first time in a week, following a Fri selloff that saw the most-active gold futures contract snap a streak of weekly gains. Gold futures for Jun declined by $12 (0.6%) to $2003 an ounce after prices declined by 0.5% last week. The contract touched an intraday low of $1993.
Gold briefly dips back below $2,000 an ounce after last week’s selloff
Oil futures finished with a loss, with traders weighing the prospects for energy demand. A shockingly strong Empire State Manufacturing Index reading helped to lift the odds of an interest-rate hike by the Federal Reserve in May. That "poured some cold water on the recent rise in economic soft landing hopes, which were the reason for oil's break higher last week. With the yield curve inverted to historic levels & sentiment towards the banking system still fragile, the threat that more rate hikes by the Fed...pushes the economy into a deep recession remains a very real threat to energy demand in the quarters ahead. May West Texas Intermediate crude fell $1.69 (2.1%) to settle at $80.83 a barrel.
Oil futures finish lower as traders eye prospects for energy demand
Dow remained near breakeven all day. Investors are weighing the prospects of a possible recession & how higher interest rates will affect the economy & economic growth.
Dow Jones Industrials
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