markets

Summary Of the Markets Today

• The Dow closed up 1.47% / +466,
• Nasdaq closed up 3.82%,
• S&P 500 closed up 2.39%,
• WTI crude oil settled at 110.30, up 3.45%
• USD $104.59 down 0.16%
• Gold 1809,03 down 0.36%,
• Bitcoin up 3.6% to $29,992,
• 10-year U.S. Treasury up 0.12% / 2.937%
• Baker Hughes Oil Rig Count 13/MAY from 557 to 563

Today’s Economic Releases

The Philadelphia Fed’s Second Quarter 2022 Survey of Professional Forecasters now predicts the economic outlook is weaker. 2022 GDP annual growth is now forecast at 2.5% – down from the 3.7% forecast just three months ago.

Median Forecasts for Selected Variables in the Current and Previous Surveys

	REAL GDP (%)		UNEMPLOYMENT RATE (%)		PAYROLLS (000S/MONTH)
	PREVIOUS	NEW	PREVIOUS	NEW	PREVIOUS	NEW
Annual data (projections are based on annual-average levels):
2022	3.7	2.5	3.7	3.6	430.9	479.7
2023	2.7	2.3	3.4	3.6	197.2	172.7
2024	2.3	2.0	3.6	3.8	N.A.	N.A.
2025	2.3	2.3	3.7	3.8	N.A.	N.A.

 

These same forecasters now forecast higher inflation. Can you believe that only three months ago – 2022 inflation was forecast the 3.8%?

Median Short-Run and Long-Run Projections for Inflation (Annualized Percentage Points)

	HEADLINE CPI		CORE CPI		HEADLINE PCE		CORE PCE
	PREVIOUS	CURRENT	PREVIOUS	CURRENT	PREVIOUS	CURRENT	PREVIOUS	CURRENT
Quarterly
Q4/Q4 Annual Averages
2022	3.8	6.1	3.6	4.8	3.1	5.0	3.1	4.1
2023	2.4	2.9	2.5	2.9	2.2	2.5	2.2	2.5
2024	2.3	2.3	2.4	2.5	2.2	2.2	2.2	2.2

U.S. IMPORT AND EXPORT PRICE INDEXES – APRIL 2022 – Year-over-year inflation moderated from 13.0% to 12.0%.

Student Debt Relief – A Philadelphia Fed Study found “most respondents without education debt preferred no, or relatively limited, cancellation of federal education debt (e.g., $10,000 or less per borrower). In comparison, those with education debt overwhelmingly (86 percent) preferred some debt relief. However, even among this group, there did not appear to be widespread support for canceling most or all education debt. A majority of respondents, with or without education debt, felt that any debt relief provided should be targeted.”

A summary of headlines we are reading today:

• Oil Prices Climb Despite Demand Destruction Claims
• Russia To Halt Electricity Exports To Finland On Saturday
• U.S. Rig Count Continues To Rise As WTI Hits $110
• Twitter CEO “Expects Deal To Close” After Musk Chaos
• Cryptocurrencies melt down in a ‘perfect storm’ of fear and panic
• Market Snapshot: Stocks trade sharply higher as S&P 500 fights off bear-market slide; Twitter drops after Musk tweet

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

Summary Of the Markets Today

• The Dow closed down 0.3%,
• Nasdaq closed up 0.1%,
• S&P 500 closed down 0.1%,
• WTI crude oil up $1.12 to $106.83,
• USD $104.81. up 1.0%,
• Gold down $30.50 to $1,823,
• Bitcoin down 1.5% to $28,558,
• 10-year U.S. Treasury down -0.04% to 2.871%

Today’s Economic Releases

For the week ending 07 May 2022, initial unemployment claims continue to modestly increase.

The Producer Price Index’s final demand year-over-year growth modestly declined from 11.5% to 11.0% (similar to the decline seen in the CPI).

A summary of headlines we are reading today:

• A Global Energy Shortage Is Putting Bitcoin Under Pressure
• Russia Could Cut Gas Supplies To Finland Tomorrow
• A Ban On Excessive Gasoline Prices Heading To Congress For Vote
• Gold And Silver Fall As Rising Interest Rates Dampen Sentiment
• U.S. airline bookings dropped 17% in April as flights got even more expensive
• Secret Royalty Checks To Fauci, Hundreds Of NIH Scientists

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

Summary Of the Markets Today

• The Dow closed down 1.02% -327,
• Nasdaq closed down 3.18%,
• S&P 500 closed down 1.65%,
• WTI crude oil settled at 105.33, up 6.03%
• USD $103. up 0.02%
• Gold 1854, up 0.02%,
• Bitcoin down 2.5% to $29,113,
• 10-year U.S. Treasury down -0.07% / 2.923%

Today’s Economic Releases

The Consumer Price Index (CPI) for April 2022 shows year-over-year inflation moderated from 8.5% to 8.3%.

A summary of headlines we are reading today:

• Kyiv Halts Russian Gas Shipments Through Key Hub
• Southwest is upgrading its planes with faster Wi-Fi, bigger overhead bins and new drinks to woo travelers
• Toyota warns ‘unprecedented’ raw materials costs could cut profits by 20%
• Major Trucking Firms Prepare For “Imminent Diesel Shortage In Eastern Half Of US”
• Does the cryptocurrency crash pose a threat to the financial system?
• Market Extra: What’s next for markets after inflation data fails to deliver ‘watershed moment’

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

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