Major stock markets in the United States closed higher on Tuesday, as earnings season started in full swing. On the pandemic front, US President Joe Biden stated that cases are going down nationally, as he urged people to get vaccinated and get the booster shot when available. In politics, the reconciliation package seems to be getting traction with the White House pushing to end the negotiations and pass the bill. Federal Reserve officials also talked about inflation, noting that it may last as long as the pandemic. The Dow Jones ended the day 1.55% or 533 points in the green. The Nasdaq 100 was up by 1.88% at the closing bell. The S&P 500 finished 1.71% higher. Walgreens led all three indices, closing the day with an increase of 7.43%. The euro stood flat against the dollar trading for $1.15974 at 4:04 pm ET.
EIA reports a third straight weekly climb in U.S. crude supplies up this week 6.1M barrels
The Energy Information Administration reported on Thursday that U.S. crude inventories rose by 6.1 million barrels for the week ended Oct. 8. That defied expectations for an average 500,000 barrel decline expected by analysts polled by S&P Global Platts. The American Petroleum Institute on Wednesday reported a 5.2 million-barrel climb, according to sources. Supply data were released a day later than usual this week due to Monday’s Columbus Day holiday. The EIA also reported a weekly inventory decline of 2 million barrels for gasoline, but said distillate supplies were “virtually unchanged”from last week. The EIA data also showed crude stocks at the Cushing, Okla., storage hub edged down by 1.9 million barrels for the week. NN: As you are seeing at $80 oil it won’t take long for producers to gear up. Everyone is making money at this price. Talk about incoming……
Fed needs more data on inflation levels – Barkin
(Reuters) – Richmond Federal Reserve President Tom Barkin on Thursday said the U.S. central bank has cleared a path for what he hopes to be a “seamless” start to a reduction in its support for the economy, but that it will take more time to determine when interest rate hikes will be appropriate. “We still have a lot to learn about whether recent inflation levels will be sustained and how much room we have to run in the labor market until we get to maximum employment,” Barkin said in remarks prepared for delivery to the Forecasters Club of New York. “As COVID-19 hopefully eases, I expect the answers to these questions to become clearer.” Fed policymakers feel that labor markets have healed enough to start reducing their crisis-era support for the U.S. economy “soon,” and probably by the middle of next month, minutes from the Sept. 21-22 policy meeting showed on Wednesday. That language provided the “advance” warning the central bank had promised to give before starting to reduce its $120 billion in monthly purchases of Treasury bonds and mortgage-backed securities, Barkin said in his remarks. About half of the Fed policymakers believe the central bank will have to start raising interest rates by the end of next year, forecasts released on Sept. 22 showed, with all but one believing it will be necessary by the end of 2023. The Fed does not reveal policymakers’ individual interest rate forecasts, nor the economic assumptions they are based on. Barkin said on Thursday he’d like to provide that information. “Doing so would provide a clearer picture of each FOMC (Federal Open Market Committee) member’s individual reaction function, and taken as a whole, this could help shed more light on the Fed’s overall reaction function,” he said. NN: This is crazy shit: I understand wait to you see the white in their eyes. But the Fed is waiting till you see their boot on your neck. This is beyond reckless…. OK that means more money for you and me….. When they soon panic!
United States Producer Price Index (YoY) 8.6%)
The Producer Price Index (PPI) in the United States increased by 0.5% in September on a seasonally adjusted basis in comparison to August, according to a US Bureau of Labor Statistics report released on Thursday. On an unadjusted basis, producer prices rose by 8.6% for the 12 months that ended in September, the highest jump documented since the introduction of 12-month data in November 2010. Most of the increase in the final demand index was attributed to a 1.3% rise in prices for final demand goods. The index for final demand services was 0.2% higher. Unadjusted prices for final demand excluding foods, energy, and trade were 0.1% up in September compared to the previous month, while adding 5.9% year-on-year.
French Candidate Marine “if elected will take wind turbines…….. she is ahead in the polls s
PARIS (Reuters) – French far-right presidential candidate Marine Le Pen said that if she is elected president next year she will end all subsidies for renewable energy and will take down France’s wind turbines. Le Pen, who will be the candidate of the Rassemblement National party in the April vote, made it to the second round of the 2017 election, and is expected to do so again, although some recent polls have shown that right-wing talk-show star Eric Zemmour could best her if he decides to run.
“Wind and solar, these energies are not renewable, they are intermittent. If I am elected, I will put a stop to all construction of new wind parks and I will launch a big project to dismantle them,” she said on RTL radio.
She added that she would scrap the subsidies for wind and solar, which she said added up to six or seven billion euros per year and put a heavy burden on consumers’ power bills.
Le Pen also said that she would provide strong support for France’s nuclear industry by allowing the construction of several new nuclear reactors, fund a major upgrade of France’s existing fleet and would back the construction of small modular reactors as proposed by President Emmanuel Macron.
In a 2030 roadmap for the French economy presented this week, Macron proposed billions of euros of support for electric vehicles, the nuclear industry and green hydrogen – produced with nuclear – but made little mention of renewable energy. France produces about 75% of its power in nuclear plants, which means its electricity output has among the lowest carbon emissions per capita of any developed country. However, it also lags far behind Germany and other European nations in wind and solar investment. There is an active anti-wind movement, which is supported by the far right and centre right, notably by Xavier Bertrand, the leading conservative contender in the presidential vote. NN: The grenniewinnies have overplayed their hand… especially in Europe. The masses will rise up when they are cold this winter and energy prices triple. Their intransigence will be their demise. Zero carbon emissions cannot happen over night. Not only is the infrastructure not their. But the technology does not exist yet…… Natural gas is a clean burning low carbon emission bridge fossel fuel… It’s a great bridge. Nuclear has a zero carbon foot print. A carbon neutral future neutral can not work on solar and wind alone… Remember the infrastructure for natural gas and nuclear isfor the most part in place
Large Crude Oil Inventory Build reported by API
The American Petroleum Institute (API) on Tuesday reported another week of crude oil inventory builds. This time, the build is extra large, at 5.213 million barrels for the week ending October 8, as U.S. crude inventories sit 66 million barrels below beginning of the year levels. In the previous week, the API reported a surprise build in oil inventories of 951,000 barrels, compared to the 300,000 barrel draw that analysts had predicted. Oil prices were relatively flat on Wednesday in the runup to the data release, but WTI is still north of $80 per barrel, while Brent crude trades at more than $83. Both WTI and Brent were down .10% and .17%, respectively, at 3:30 p.m. EST. Oil inventories in the United States have drawn down nearly 66 million barrels so far this year, according to API data. And they’ve drawn down roughly 9 million barrels since the start of 2020. U.S. oil production for the week ending October 1—the last week for which there is data—rose 200,000 bpd to 11.3 million bpd and is now just 200,000 below pre-Hurricane Ida levels. The API reported a draw in gasoline inventories of 4.575 million barrels for the week ending October 8—compared to the previous week’s 3.682-million-barrel build. Distillate stocks saw a decrease in inventories of 2.707 barrels for the week, compared to last week’s 345,000-barrel increase. Cushing inventories saw a draw this week, adding 2.275 million barrels to the total inventory, after last week’s 1.999-million-barrel increase. NN: As you are seeing inventories are starting to build back up after the Hurricane shut downs. Reality is everyone and their dog is ramping up production to beat the band. It will take a few months more of insanity before reality set in and hopefully we will get a big fat pay day……. Right now they are selling the masses we are running out of oil fear game…… Its a old song
FOMC Minutes: Tapering to start in November or December
‘“There is a bit of a pivot happening where there is a worry that transitory inflation might be transitioning to concern that it might be structural,” said Michael Pond, head of global inflation market strategy at Barclays. “Even the doves on the committee want to make sure that inflation expectations and financial conditions don’t start to cause alarm.”
Fed officials last month left interest rates near zero but signaled they were close to beginning to scale back their $120 billion in monthly asset purchases. Chair Jerome Powell told reporters during a post-meeting press conference the process could start as soon as November and would likely end around mid-2022. “The minutes make it clear that the Fed will announce tapering at the next FOMC meeting, on Nov. 2-3, unless disaster strikes,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. Investors took the minutes in their stride. Stocks rose while the yield on 10-year Treasuries declined and the two-year rate — which is more sensitive to policy moves — rose. “The guidance in the September FOMC minutes is clear: the cost of quantitative easing now outweighs the benefits. That means they will very likely look through the weak September jobs report. Taper will be almost certainly announced at the November meeting — and could even begin as early as that month.” Officials discussed an illustrative tapering path: “The path featured monthly reductions in the pace of asset purchases, by $10 billion in the case of Treasury securities and $5 billion in the case of agency mortgage-backed securities.” Fed officials commented that the path “provided a straightforward and appropriate template” they might follow, according to the minutes. The record of the closed-door debate showed U.S. central bankers grappling with high uncertainty on both sides of their mandate for full employment and stable prices. Inflation is rising at the fastest pace in years and is well above the Fed’s 2% goal. Some officials say supply bottlenecks and production tangles — blamed on disruption as the economy reopens from the pandemic — could sustain price pressures for longer than they expected. Consumer prices rose 5.4% in September from a year earlier, the Labor Department reported Wednesday. “Most participants saw inflation risks as weighted to the upside because of concerns that supply disruptions and labor shortages might last longer and might have larger or more persistent effects on prices and wages than they currently assumed,” the minutes said. In addition, Fed staff said risks had worsened, including the possibility that “longer-run inflation expectations would move appreciably higher and lead to persistently elevated inflation.” Fed officials last month projected price pressures would ease back close to their goal next year, but nine of 18 forecast at least on interest-rate increase during 2022, up from seven in June. The FOMC left rates near zero and said they would stay there until the labor market has reached maximum employment and inflation was on track to exceed 2% “for some time.” “Various participants stressed that economic conditions were likely to justify keeping the rate at or near its lower bound over the next couple of years,” the minutes said. “In contrast, a number of participants raised the possibility of beginning to increase the target range by the end of next year,” because they saw the thresholds for liftoff potentially being met by that time. NN: The Fed has lost control of inflation. Like most in leadership they relied upon their algorithms. Unfortunately no algo was ready to calculate a plague. The Fed belies inflation is transitory, Business believe supply chain disruption are temporary. Both are dead wrong. Look at inflation as a cancer. And tapering and raising interest rates is chemo therapy. Be ready for the economy to get very very sick.
US annual inflation at 5.4% in September
Yet another increase in the cost of living in September kept the rate of U.S. inflation at a 30-year peak, adding to mounting evidence that prices are likely to remain high well into next year. The pace of inflation over the past year edged up to 5.4% in September from 5.3% in the prior month. That’s more than double the Federal Reserve’s 2% average target. Consumer prices have risen this year at the fastest pace in three decades, setting aside a brief oil-driven spike in 2008. Another closely watched measure of inflation that omits volatile food and energy costs rose 0.2% last month. This so-called core rate is closely followed by economists as a more accurate measure of underlying inflation. The 12-month increase in the core rate was unchanged at 4%. It had reached a 30-year high of 4.3% in June. The big surge in inflation this year is likely to last well into 2022 — an outcome the Federal Reserve has only recently acknowledged. Broad shortages of labor and supplies are raising costs for companies and they are charging customers higher prices to maintain their profits. These shortages in some cases have gotten worse and there’s little end in sight. The ongoing bottlenecks have forced the Fed to reconsider its view that inflation was “transitory” and would fade by the end of the year. Chairman Jerome Powell recently conceded inflation would stay higher for longer than he had expected. And
Atlanta Federal Reserve President Raphael Bostic said central bank officials should stop calling inflation transitory.
The upshot: The Fed to set to announce in November that it will begin to withdraw stimulus for the U.S. economy. Some Fed watchers also think high inflation could force the central bank to move up its first increase in interest rates, but that remains to be seen. A key short-term rate has been near zero since early in the pandemic. The cost of gasoline rose 1.2% in September and was a big contributor to the increase in inflation last month. What’s worse, oil prices are still on the rise and that could nudge inflation even higher in October. The cost of food surged almost 1% last month, mostly for groceries. Grocery prices have climbed 4.5% in the past year and are increasing three times faster than they did in the five years before the pandemic. The cost of rent, meanwhile, jumped 0.5% in September to mark the biggest increase in 20 years. A nationwide eviction moratorium ended last month and rents have been rising steadily over the past year. Shelter is the largest expense for most families. Prices also rose for car insurance, education, recreation and phone and Internet service. Prices fell for airline fares, hotel rentals and several other services after a surge in delta cases toward the end of summer. Americans opted to travel less until the caseload began to decline. The cost of used cars also fell, though prices are still sky-high compared to a year earlier. Soaring used-vehicle prices played an outsized role in the surge in U.S. inflation earlier this year. Sifting through the details of the report, there’s little evidence prices pressures will ease soon. Increases in energy and food prices show little sign of letting up. The cost of rent is likely to continue to rise. And medical prices have been unusually subdued, a trend that won’t last, economists say. The ongoing shortages of business supplies — parts and materials — also strongly suggest prices are unlikely to relent. “Extended supply chain disruptions —and potentially further increases in energy costs — are likely to maintain a hot inflation trend through yearend and into 2022 even as pandemic effects slowly ebb,” said senior economist Ben Ayers of Nationwide. NN: Holy shit batman… Inflation is like gravity.. All it takes is a little push. And they have pushed the shit out of inflation. It’s really big, bad, ugly and embedded. And under all the smiling faces the FED is scrared shit and rightly so!
Russia pledges to boost gas supplies to Europe
Russia suggested it could sell more gas to European spot buyers via its domestic market in addition to through existing long-term contracts.
Russia has the potential to boost natural gas supplies to Europe, where surging gas prices have ramped up pressure on consumers, the Kremlin said Thursday. Kremlin spokesman Dmitry Peskov said existing gas transit routes allow for bolstering supplies before the new Nord Stream 2 pipeline that is intended to bring Russian gas to Germany begins operating. “There is a potential,” Peskov said during a conference call with reporters. “It all depends on demand, contractual obligations and commercial agreements.” Europe’s soaring gas prices dropped Thursday, a day after Russian President Vladimir Putin suggested his country could sell more gas to European spot buyers via its domestic market in addition to through existing long-term contracts.
Speaking during Wednesday’s government meeting on energy issues, Putin said that rapidly growing demand amid the global economic recovery from the pandemic has driven Europe’s rising gas prices. A cold winter and less power generation by alternative sources also were factors, he said.
But the Russian leader said the European Union’s efforts to switch from long-term supply contracts to spot trading in gas played a key role. “I would like to underline that the situation in the European energy markets is a bright example of the inadmissibility of hasty and politically motivated moves in any sphere, particularly in energy issues that determine stability of industries and welfare and life quality of millions of people,” Putin said. He strongly rejected criticism from some European politicians who alleged that Russia’s failure to boost supplies was driving price increases. “Russia has always been a reliable gas supplier to consumers around the world, in Europe and in Asia, and always has fully met all its obligations. I want to emphasise that,” Putin said. Putin stressed that Russian gas supplies to Europe in the first nine months of the year rose 15 percent compared with the same period in 2020, adding that they could set a new record this year. The Russian leader also rebuffed Ukraine’s claim that Moscow was trying to cut supplies delivered through Ukrainian territory in anticipation of the Nord Stream 2 coming into service. Russia has pumped 8 percent more gas via Ukraine than envisaged by the existing transit contract, Putin said. He said that Russia could sell more gas to European spot buyers via his country’s domestic exchange, noting that sharp price fluctuations are bad for Moscow, too. But he added that Russia’s state-controlled gas giant Gazprom also needs to fill its own stores to serve domestic needs in anticipation of winter. NN: The trap is set. Europe went all in on fantasy source of energy. And they fell into the bear trap. They are now Putin’s bitch. Russia is willing to give them any and all the gas they need…… As long as they pay up. And any time Putin decides to screw them to the wall its lights out.