Dow went up 101, advancers over decliners 3-2 & NAZ lost 3. The MLP index stayed in the 223s & the REIT index edged up 1+ to the 371s. Junk bond funds were a little higher & Treasuries continued with very heavy selling, bringing significantly higher yields. Oil was fractionally lower to 80 & gold pulled back 23 to 2002 (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)
Americans are bracing for higher inflation over the next few years even as they worry about a potential credit crunch following a spate of bank failures, according to a key Federal Reserve Bank of New York survey. The median expectation is that the inflation rate will be up 4.7% one year from now, according to the New York Federal Reserve's Survey of Consumer Expectations, up from 4.2% in Feb. That marks the first series increase since Oct & adds a perplexing twist to the Fed's campaign to crush price pressures with a series of aggressive rate hikes. Consumers anticipate that inflation will remain sticky in coming years, according to the survey, estimating that inflation will hover around 2.8% 3 years from now. By comparison, central bank policymakers projected in their latest economic forecasts that inflation will fall to 2.5% next year. Despite the increase in year-ahead inflation expectations, consumers expect the price of food, gasoline & rent to fall in coming years, while they forecast an uptick in housing costs. The survey, which is based on a rotating panel of 1300 households, plays a critical role in determining how Fed policymakers respond to the inflation crisis. That is because actual inflation depends, at least in part, on what consumers think it will be. It is sort of a self-fulfilling prophecy – if everyone expects prices to rise by 3% in the year, that signals to businesses that they can increase prices by at least 3%. Workers, in turn, will want a 3% pay raise to offset the rising costs. Chair Jerome Powell has repeatedly warned that central bankers are on the alert for signs that inflation expectations are rising, a sign that high consumer prices could become entrenched in the economy. "I think by the actions that we take, though, we help keep longer-term inflation expectations anchored and keep the public believing in 2% inflation by the things that we do, even in times when energy is part of the story of why inflation is high," Powell said last year. The new inflation expectation projections come just 2 days before the release of new consumer price index data, which is expected to show the growing stickiness of higher inflation. Economists expect that inflation rose 0.4% in Mar from the previous month & 6% from the previous year, about 3 times the pre-pandemic average.
US inflation expectations jump for first time in months, NY Fed survey shows
Pfizer (PFE) CEO signed on to an open letter calling for the reversal of a federal
judge's decision to suspend the Food & Drug Administration's approval
of the abortion pill mifepristone. Albert Bourla was among the
more than 200 pharmaceutical company execs who signed the letter
after Judge Matthew Kacsmaryks controversial ruling Fri. “We
call for the reversal of this decision to disregard science, and the
appropriate restitution of the mandate for the safety and efficacy of
medicines for all with the FDA, the agency entrusted to do so in the
first place,” the letter said. The execs expressed support
for the FDA’s authority to regulate drugs & said Kacsmaryk's decision
“ignores decades of scientific evidence and legal precedent.” They also
raised concerns that the ruling will “set a precedent” for diminishing
the FDA's authority over drug approvals, which would create uncertainty
for the entire industry. “If courts can overturn drug approvals
without regard for science or evidence, or for the complexity required
to fully vet the safety and efficacy of new drugs, any medicine is at
risk for the same outcome as mifepristone,” the execs wrote in the
letter. They added that regulatory uncertainty will likely reduce
incentives for investing in new drugs, which would endanger the
“innovation that characterizes our industry.” Kacsmaryk sided with an anti-abortion group, arguing the FDA rushed
its approval process & violated federal standards & suggested the
agency ignored mifepristone's serious safety risks due to “political
pressure.” “The Court does not second-guess FDA’s decision-making
lightly,” Kacsmaryk wrote in his decision. “But here, FDA acquiesced on
its legitimate safety concerns — in violation of its statutory duty —
based on plainly unsound reasoning and studies that did not support its
conclusions.” The stock rose 23¢.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE_aid=CD3289&a_bid=6aeoso5b6f7
Pfizer CEO signs open letter calling for reversal of Texas abortion pill ruling
Most seniors think that the cost of living adjustments (COLA) made to their Social Security benefits this year won't adequately keep pace Social Security increase, which boosted the average monthly benefit by about $140, is not enough to cover the sharp increase in the cost of living, according to a recent survey from The Senior Citizens League (TSCL). Roughly the same number of respondents said that their household costs in 2022 rose by more than 8.7%. Feb's Consumer Price Index (CPI), a measure of inflation, increased by 6% year-over-year, a slight slowdown from 6.4% growth in Jan. However, inflation remains well above the Federal Reserve's 2% target rate. The Fed has pledged to keep raising interest rates to bring inflation back down. For consumers, it has meant dealing with continued high prices & interest rates that could last well into the end of the year. "February inflation ...has moderated ...but some prices remain stuck in high gear," TSCL said. "Long term trends indicate a significant drop in the average monthly rate of inflation over the past 12 months and suggests that the next annual cost of living adjustment, in 2024 could drop below 3%." In addition to rising costs, many more Social Security beneficiaries also face paying taxes on their Social Security because of last year's COLA adjustments. Social Security recipients can owe taxes on up to 85% of their Social Security benefits when their "combined income" is over $25,000 for single filers or $32,000 for couples filing jointly. This threshold is not adjusted for inflation, unlike income tax brackets, according to TSCL. Because of last year's 5.9% COLA adjustment, 51% of beneficiaries said they are concerned they will owe taxes on their benefits. One in 5 said it's the first time they've earned over the threshold limit & potentially faced paying taxes on benefits.
Seniors worry Social Security increase not enough to cover rising costs: Survey
Gold prices settled at their lowest in a week, but held above $2000 an ounce amid a bout of precious-metals profit-taking. A stronger $ also weighed on the yellow metal. Gold futures for June delivery fell by $22 (1.1%) to settle at $2003 per ounce after tapping an intraday low of $1996. Prices marked the lowest most-active contract finish since Apr 3. Gold prices rose last week for the 6th week in a row. But prices declined today, down a 3rd straight session, as global markets were caught in a post-Easter lull, with much of Europe still out. Fri's jobs report showed that the US added 236K new jobs in Mar, while the consensus forecast called for nonfarm-payrolls expansion of 238K. Gold fell based on the belief that the Mar US jobs data should prompt the Federal Reserve to keep hiking interest rates, at least by a qtr point at their May meeting. In reality, the rest of the economic data are pointing toward a significant slowdown & providing more reasons for the Fed to pause. The next key data point will come Wed with the CPI report.
Gold prices retreat as U.S. dollar strengthens, traders take profits
Oil futures declined, with US prices settling below $80 a barrel — at their lowest in more than a week. Energy traders are still on the sidelines until they get a clearer picture on the global growth outlook. May West Texas Intermediate crude fell 96¢ (1.2%) to settle at $79.74 a barrel. That was the lowest front-month contract finish since Mar 31.
U.S. oil futures settle below $80, at lowest in more than a week
Dow began trading in the red, dragged lower after the weak jobs report on Fri. But buyers returned later during the day & gave it a modest gain. NAZ also benefited with strength in the PM bringing it near even. Tomorrow should be quiet while traders wait for inflation data & Fed meeting minutes on Wed.
Dow Jones Industrials
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