Federal Reserve chairman Powell spoke to the National Association of Business Economists on Monday and indicated the FED would move more aggressively to raise interest rates to tamp down inflation. Bond yields and stocks rose sharply and bond prices fell on the news. Some economists are now predicting the FED may hike 0.5% at each of the next three meetings and then following with quarter point hikes through year end in the effort to bring down inflation. Stock indices ended the week mixed but bond yields moved up sharply.
The U.S. now plans to ship 50BN cubic meters of LNG annually to Europe through 2030 to help wean them off of Russian gas and natural gas prices rose sharply.
Treasury yields rose with the 30-year bond yield at 2.594% and the 10-Year note at 2.483%. U.S. crude oil rose to $113.03 a barrel and natural gas rose to $5.586 per MMBTUs. The U.S. dollar index rose to 98.78 and gold fell to $1953.90 an ounce.
In the economic numbers:
- U.K. inflation rose to 5.5% year over year in February, up from 4.9% in January.
- The Commerce Department reported:
- New home sales fell 2% in February as higher mortgage rates and higher prices weighed on sales.
- Durable goods orders fell 2.2% in February largely due to a drop in orders for commercial aircraft.
- Excluding transportation, durable goods orders fell 0.6%.
- Volatile commercial aircraft orders fell 30%.
- Motor vehicle and parts orders fell 0.5%, following a 0.7% drop in January.
- Unfilled orders rose 0.4% with 0.8% increases in motor vehicles and aircraft.
- The Labor Department reported:
- First time claims for unemployment were 187,000, down from the prior week’s revised 215,000, and the lowest since 1969.
- The 4-week moving average of claims, designed to smooth out volatility, fell to 211,750.
- Continuing claims fell from a revised 1.42MM to 1.35MM in the week ending March 12th .
- For the full unemployment report go here: https://www.dol.gov/ui/data.pdf .
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the prior week:
- Field production of crude oil was unchanged at 11.6MM BPD.
- Natural gas storage fell 51BN cubic feet and is below the 5-year average at this time of year.
- Baker Hughes reported the number of active oil rigs rose 7 to 531. The number of active natural gas rigs was unchanged at 137.
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Loren C. Rex, CFP®, MA Erik A Smith, AIF®
Founder / Emeritus President & C.E.O.
269-441-4143 517-795-2025
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.
