Markets waffle as the rally struggles

Dow went up 62 (below early highs), advancers ahead of decliners about 2-1 & NAZ was off 44.  The MLP index crawled up 1+ to the 275s & the REIT index was off a fraction to the 379s.  Junk bond funds were little changed & Treasuries saw more buying which lowered yields.   Oil dropped almost 2 to the 76s & gold advanced 16 to 2047 (more on both below).

AMJ (Alerian MLP Index tracking fund)

Credit card interest rates have ballooned to record highs in recent years — & the growing portion of the formula that generates profit for card issuers is partly to blame, according to a new analysis by the Consumer Financial Protection Bureau (CFPB).  The average consumer paid  a 22.8% interest rate on their credit card balance at the end of 2023, the highest since the Federal Reserve began tracking data in 1994.  Interest charges, expressed as an annual percentage rate, are up about 10 points in the past decade, from 12.9%.  Total credit card debt & average balances are also at record highs.  “By some measures, credit cards have never been this expensive,” wrote CFPB’s Dan Martinez, senior credit card program manager & financial analyst Margaret Seikel.  Credit card APRs began moving sharply higher in 2022 as the Fed raised its benchmark interest rate to tame inflation.  Interest rates on credit cards (& other consumer loans) generally move in tandem with Fed policy, according to a barometer known as the “prime rate.”  However, credit card companies have also simultaneously raised their average “APR margin,” according to the CFPB.  APR margin is the difference between the total APR & the “prime” rate.  It's a proxy for card issuers' profits commensurate with their lending risk.  Those margins are at record highs: They averaged 14.3% in 2023, up from 9.6% in 2013.  Almost ½ the increase in total credit-card interest rates in the past decade is due to issuers raising their APR margins.  Major credit card issuers got $25B in extra interest by raising their average APR margin over the last 10 years, the CFPB estimated.  The average consumer with a $5300 balance across credit cards would have paid an extra $250 in 2023 due to this increase.  “Increases to the average APR margin ... have fueled issuers’ profitability for the past decade,” Martinez & Seikel wrote.  “Higher APR margins have allowed credit card companies to generate returns that are significantly higher than other bank activities.”

Credit card interest rates have ‘never been this expensive,’ CFPB says

After a sharp spike upwards last week, the average national gas price held steady this week at $3.27, according to AAA.  Demand for gas also held steady, according to information from the Energy Information Administration & remained flat at 8.2M barrels per day.  Gas prices were stagnant after an announcement that the BP-Whiting refinery in Indiana would reopen soon.  The refinery has been closed since early Feb due to a power outage.  "Old man winter is shuffling toward the exit, and with milder weather and longer days looming, the seasonal rise in gas prices is primed to begin," said Andrew Gross, AAA's spokesperson.  "But it will probably be a slow, wobbly start to rising prices."  The national average price of gas is still 20¢ higher than last month but has gone down 12¢ since this time last year.

After weeks of rising prices, gas prices remained steady last week

Shares of Intuitive Machines (LUNR) jumped after the company's successful first moon landing.  LUNR's Nova-C cargo moon lander known as “Odysseus” yesterday became the first privately developed spacecraft to land on the lunar surface, as well as the first US spacecraft to soft-land on the moon in more than 50 years.  The company, based in Houston, Texas, confirmed that the IM-1 mission lander was standing upright & sending data back to earth.  “Odysseus has found his new home,” Tim Crain, Intuitive Machines' CTO & IM-1 mission director, said from the mission control.  LUNR stock initially ripped 40% higher from its previous close of $8.28 a share before paring gains with heavy trading volume.  The company has a market valuation of about $1B & the stock has been rallying over the past month as excitement built in the lead-up to & progress of the IM-1 mission.  LUNR went public via a SPAC a year ago & shares had steadily slid to all-time lows near $2 in Jan.  Today the stock zoomed up $1.31 to $9.59.

Intuitive Machines stock jumps in wild trading after moon landing

Gold closed with a gain as the $ weakened & treasury yields were mixed.  Gold for Apr closed up $18 to settle at $2049 per ounce.  The rise comes as the $ weakened, making the metal more affordable for intl buyers.  The ICE dollar index was last seen down 0.08 points to 103.88.  Treasury yields were mixed following 2 rising sessions, as a series of robust economic reports push off the prospect of lower interest rates in the near term.  The yield on the 2-year note was last seen up 0.6 basis points to 4.707% & the 10-year note was last seen paying 4.246%, down 8.1 basis points.

Gold Closes Higher as the Dollar Weakens amid Mixed Treasury Yields

West Texas Intermediate (WTI) crude oil closed with a loss on demand concerns, losing ground a day after a smaller than expected rise in US inventories buoyed the market.  WTI crude oil for Apr closed down $2.12 to settle at $76.49 per barrel, while Apr Brent crude, the global benchmark, was last seen down $1.86 to $81.81.  The drop comes as demand worries continue, with the economy of China, the #1 importer, faltering amid a debt crisis for its real estate sector.  The Energy Information Administration yesterday reported US oil inventories rose by 3.5M barrels, under expectations for 4.3M barrel increase, offering some support to the market, while Middle East violence also remains a focus, as Israel continues its war against Hamas & Yemen's Houthi militants increase attacks on Red Sea shipping.

WTI Oil Slumps on Demand Concerns, though Mideast Tensions and Lower US inventories Offer Support

Popular stock averages hit new records which took Dow over 39K, up 504 this week.  However Dow has rallied more than 6K from its 4 month lows, shown in the chart below.  That is extremely overbought while interest rates are at very highs levels which could last for months.  The Fed will be busy at its meeting next month.

Dow Jones Industrials