markets

Summary Of the Markets Today

• The Dow closed down 0.26%,
• Nasdaq closed up 0.98%,
• S&P 500 closed up 0.25%,
• WTI crude oil settled at 99.69, down 2.7%
• USD $103.09 up 0.14%
• Gold $1836, down $20,
• Bitcoin down 0.73% to $31,381,
• 10-year U.S. Treasury down -0.086% / 2.993%

Today’s Economic Releases

The NFIB Small Business Optimism Index was unchanged in April. The expectation index (optimism 6 months from today) associated with this survey sank to the lowest level recorded in this index. Inflation remains a major concern.

CoreLogic Loan Performance Insights, which monitors mortgage delinquency, improved in February 2022.

A summary of headlines we are reading today:

• Fears Of An Economic Slowdown Drag Oil Prices Lower
• Boeing aircraft orders, deliveries slipped in April
• Virgin Orbit is assembling a fleet of 747 jets to launch more rockets into space
• Fed Warns Of Negative Feedback Loop, Fragile Liquidity, And More Volatile Prices
• Market Extra: Here are 4 reasons why market volatility is unlikely to soon subside

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today

• The Dow down 1.99% or 654 points
• Nasdaq down 3.20%,
• S&P 500 down 4.29%,
• WTI crude oil down $7.81 to 102.72
• gold down from $1953 on Apr22 to $1853,
• Bitcoin down 21% over the past 5 days to $31,321,
• 10-year U.S. Treasury down -0.086% to 3.038%

Today’s Economic Releases

Fed Bostic Speech – The Federal Reserve raised the target for the fed funds rate by half a point to 0.75%-1% during its May 2022 meeting, the second consecutive rate hike and the biggest rise in borrowing costs since 2000, aiming to tackle soaring inflation. The central bank added that ongoing increases in the target range will be appropriate, with Chair Powell pointing to 50bps hikes in the next couple of meetings. The Fed will also begin reducing asset holdings on its $9 trillion balance sheet on June 1st. The plan will start with a monthly roll-off of $30 billion of Treasuries and $17.5 billion on mortgage-backed securities for 3 months and will then increase to $60 billion and $35 billion for mortgages per month. On the economic front, policymakers noted that the invasion of Ukraine and related events are creating additional upward pressure on inflation and are likely to weigh on economic activity. In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. source: Federal Reserve

Wholesale Inventories – The headlines say wholesale sales were up month-over-month. Year-over-year change in the inventory-to-sales ratio is what is important. A jump in the ratio could indicate a slowing economy (one month of data is not a trend). A flat trend would indicate an economy that was neither accelerating or decelerating. A decelerating trend would indicate an improving economy. Wholesale sales, therefore, are indicating an improving economy.

A summary of headlines we are reading today:

• Gasoline Prices May Have Finally Peaked
• Stocks making the biggest moves midday: Palantir, Rivian, Uber and more
• Bitcoin drops below $30,000 to hit its lowest level since July 2021 after stock sell-off
• Retail Is Puking: “This Is The 5th Biggest Sell Day On Record”
• US faces baby formula ‘crisis’ as shortage worsens
• Mark Cuban: ‘Crypto is going through the lull that the internet went through’
• Yellen says financial system working well despite ‘potential for continued volatility’

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today

• The Dow down 0.3%,
• Nasdaq down 1.4%,
• S&P 500 down 0.6%,
• WTI crude oil up $2.32 to $110.56,
• Gold up $7.40 to $1,883,
• Bitcoin down 1.7% to $35,902,
• 10-year U.S. Treasury up 6 basis points to 3.13%

Today’s Economic Releases

A summary of today’s April 2022 employment report:

• total non-farm employment rose 428,000, total private up 406,000, and the unemployment rate remained at 3.6%
• the household survey, on the other hand, showed a decline of employment of 363,000 (the unemployment rate comes from the household survey whilst the headline employment numbers come from the establishment survey.
• the U-6 total unemployment rate rose from 6.9% to 7.0%
• largest jobs growth this month came from accommodation and food services (66.1K), health care and social assistance (40.9K), transport and warehousing (52.0K), and manufacturing (55.0K).

Consumer Credit increased at a seasonally adjusted rate of 9.7% month-over-month in 1Q2022.

Here are the top 10 boys and girls names for 2021 according to U.S. Social Security:

Boys	Girls
1. Liam	1. Olivia
2. Noah	2. Emma
3. Oliver	3. Charlotte
4. Elijah	4. Amelia
5. James	5. Ava
6. William	6. Sophia
7. Benjamin	7. Isabella
8. Lucas	8. Mia
9. Henry	9. Evelyn
10. Theodore	10. Harper

Other Economic News

As usual, we have included below the headlines and news summaries moving the markets today including:

• Oil Markets Are Bracing For Further Supply Disruptions
• Shocking Consumer Credit Numbers: Everyone Is Maxing Out Their Credit Card Ahead Of The Recession
• Used-car prices are down from record highs, easing the impact of inflation
• Stocks Suffer Longest Losing Streak In 10 Years, Long-Bond Battered As Fed-Cred Crumbles
• Nationwide Baby Formula Shortage Hits “Shocking” Levels, Sparking Panic Among Parents
• Nifty50 weekly chart signals more weakness ahead
• 10-year Treasury yield trades at nearly 3 1/2-year high as inflation outlook remains in focus after April jobs data

Some say today’s market’s decline is due to fear of a 75 basis-point hike at the Fed’s June meeting.

Summary Of the Markets Today

• The Dow down 3.2%,
• Nasdaq down 5.0%,
• S&P 500 down 3.6%,
• WTI crude oil up $0.51 to $108.26,
• gold up $9.90 to $1,879,
• Bitcoin down 8.8% to $36,183,
• 10-year U.S. Treasury up 12 basis points to 3.04%

Today’s Economic Releases

Employers increased job cuts by 14% in April 2022 compared to March – although job cuts to date for the year are down 52% from the same period last year.

First quarter 2022 non-farm business labor productivity declined 0.6% year-over-year whilst unit labor costs increased 7.2% YoY. Note that productivity is measured using monetary methods and is not adjusted for inflation. Having said this, I believe labor productivity likely improved – but not nearly as much as labor costs grew.

Weekly unemployment claims are modestly growing – but still well below levels seen in the last year.

Other Economic News

As usual, we have included below the headlines and news summaries moving the markets today including:

• Finland Braces For Russian Gas Cut-Off Ahead Of NATO Decision
• Germany Will Have First LNG Import Capacity By Years End
• Rising interest rates mean higher loan costs when you go to buy a car. Monthly payments already average $650
• Main Street is convinced that a recession will hit the U.S. economy this year
• Is now a good time to buy a home? Most Americans don’t think so — and Gallup says it’s the first time more than 50% of people feel that way
• Is now a good time to buy a home? Most Americans don’t think so — and Gallup says it’s the first time more than 50% of people feel that way

Summary Of the Markets Today

• The Dow up 3.8%,
• Nasdaq up 3.2%,
• S&P 500 up 3.0%,
• WTI crude oil up $5.60 to $107.95,
• gold up $15.30 to $1,886,
• Bitcoin up 5.5% to $39,777,
• 10-year U.S. Treasury down 4 basis points to 2.92%

Today’s Economic Releases

The BEA announced today that March 2022 imports grew month-to-month 10.3%, exports grew 5.6% – and the resulting trade deficit grew 22.3%

As expected, the Federal Reserve raised the federal funds rate by 1/2 percent with the target range now 3/4% to 1%. And their statement stated:

…and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee decided to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities on June 1, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in conjunction with this statement.

In addition, the Federal Reserve issued a plan for reducing the size of their balance sheet.

Other Economic News

As usual, we have included below the headlines and news summaries moving the markets today including:

• Diesel Prices Hit New Record On Wednesday
• Oil Prices Hit $110 As Europe Prepares To Ban Russian Crude
• Oil Prices Hit $110 As Europe Prepares To Ban Russian Crude
• Here’s what changed in the new Fed statement
• US makes biggest interest rate rise in 22 years
• Amazon, Citigroup, Yelp, to help pay for workers’ abortion travel costs

Summary Of the Markets Today

• The Dow up 0.2%,
• Nasdaq up 10.2%,
• S&P 500 up 0.5%,
• WTI crude oil down $22.24 to $102.91,
• gold up $3 to $1,866,
• Bitcoin down 2.1% to $37,659,
• 10-year U.S. Treasury down 2 basis points to 2.98%

Today’s Economic Releases

According to Corelogic, home price growth jumped to over 20% in March, marking the 14^th straight month of double-digit price gains. However, annual gains are projected to slow to around 6% by next March, as rising mortgage rates and higher home prices hamper affordability for some home shoppers.

The BLS March 2022 Job Openings and Labor Turnover (JOLTS) shows job openings and hires were little changed at 11.5 million and 6.7 million respectively.



Other Economic News

As usual, we have included below the headlines and news summaries moving the markets today including:

• Shale Producers Face $42 Billion In Hedging Losses
• New Lockdowns In China Are Hindering Global Steel Supply
• Putin Publishes New Sanctions Against The West
• NASA chief says competition is making space exploration cheaper, in dramatic shift on contracts
• Russia beats final deadline to avoid debt default
• How high can the Fed hike interest rates before a recession hits? This chart suggests a low threshold.

Summary Of the Markets Today

• The Dow up 0.3%,
• Nasdaq up 1.6%,
• S&P 500 up 0.6%,
• WTI crude oil up $1.13 to $105.74,
• gold down $50 to $1,862,
• Bitcoin up 1.7% to $38,464,
• 10-year U.S. Treasury up 10 basis points to 2.99%

Today’s Economic Releases

The headlines for March 2022 construction spending say it slightly improved relative to last month. Unfortunately, there is significant inflation in the sector – and the real facts show year-over-year growth has contracted over 5% (red line on graph below).

Other Economic News

As usual, we have included below the headlines and news summaries moving the markets today including:

• Can Brazil Help Fill The Supply Gap Left By The U.S. Ban On Russian Oil?
• OPEC Has Missed Its Oil Output Target Once Again
• EU Consider Exemptions As Hungary Threatens To Veto Russian Oil Ban
• Home affordability is nearly the worst on record as mortgage rates spike
• Biden kicks off $3 billion plan to boost battery production for electric vehicles
• About 150,000 people in Ukraine are using SpaceX’s Starlink internet service daily, government official says

Summary Of the Markets Today

• The Dow down 2.8%,
• Nasdaq down 4.2%,
• S&P 500 down 3.6%,
• WTI crude oil off $1 to $104.36,
• gold up $5.90 to $1,897,
• Bitcoin down 3.3% to $38,510,
• 10-year U.S. Treasury up 7 basis points to 2.93%

Today’s Economic Releases

Real personal income declined in March 2022 but real personal consumption grew. Inflation is chipping away the value of the dollar.

Other Economic News

As usual, we have included below the headlines and news summaries moving the markets today including:

• Demand Destruction Is Delaying An Oil Supply Crisis
• An EU Embargo On Russian Oil Is Imminent
• Poland Threatens To Seize Russian Pipelines
• Diesel In Crisis Mode As Prices Break Records
• Chinese leaders stick to Covid controls as the virus spreads and forces a Beijing luxury mall to close temporarily
• Nasdaq Collapses To Worst Month Since Lehman As Market Starts Pricing 75bps Hike In June

Summary Of the Markets Today

• The Dow up 1.9%,
• Nasdaq up 3.1%,
• S&P 500 up 02.5%,
• WTI crude oil up over $3 to $105.17,
• gold up $8 to $1,897,
• Bitcoin up 1.6% to $39,771,
• 10-year U.S. Treasury unchanged at 2.83%

Today’s Economic Releases

A surprise contraction of First Quarter 2022 GDP (advance estimate). This was below expectations, and I suggest for the rest of the year GDP will remain subdued primarily due to inflation (real GDP is adjusted for inflation). Note that the headline GDP is calculated quarter-over-quarter annualized – if one calculates year-over-year, real GDP increased 3.6% from the same quarter one year ago. The BEA summary:

The decrease in real GDP reflected decreases in private inventory investment, exports, federal government spending, and state and local government spending, while imports, which are a subtraction in the calculation of GDP, increased. Personal consumption expenditures (PCE), nonresidential fixed investment, and residential fixed investment increased.

Initial unemployment claims continues to trend down.

Other Economic News

As usual, we have included below the headlines and news summaries moving the markets today including:

• Moldova Fears Russia Is Looking To Expand Its War Beyond Ukraine
• Is China Finally Distancing Itself From Russia?
• Iran Boosts Oil Exports As Its Key Buyer China Cuts Russian Purchases
• Elon Musk will be the most indebted CEO in America if the Twitter deal goes through
• Climate change will drive new transmission of 4,000 viruses between mammals by 2070
• “WTF Was That!” – Stocks Explode Higher As US Economy Heads Into Recession

Quick View of the markets today:

• The Dow up 0.2%,
• Nasdaq little changed,
• S&P 500 up 0.2%,
• WTI crude oil little changed at $102.15,
• gold down $18 to $1,886,
• Bitcoin up $1,017 to $39,144,
• 10-year U.S. Treasury unchanged at 2.84%

Pending home sales (March 2022 data) have declined for five months straight. Lawrence Yun, NAR’s chief economist stated:

The falling contract signings are implying that multiple offers will soon dissipate and be replaced by much calmer and normalized market conditions. As it stands, the sudden large gains in mortgage rates have reduced the pool of eligible homebuyers, and that has consequently lowered buying activity.

As usual, we have included below the headlines and news summaries moving the markets today including:

• Russian Hackers Are Targeting Europe’s Renewable Energy Infrastructure
• Italy May Consider Nationalizing Giant Lukoil Refinery
• EU Pledges Coordinated Response To Russian Gas Blackmail
• Peter Schiff: The Fed’s Ego Is The Only Thing Bigger Than This Bubble