So, inflation remains hot, but presumably not as hot as some expected this morning’s CPI report to print, and word has it that the Biden Administration is urging OPEC to open the oil taps a bit more.
With regard to the latter, the message is, help us out here, we’re going to be spending hugely* and we need to get the inflation bug off our back…
*The bipartisan infrastructure plan is a done deal. Next up a $3.5 trillion spending package that is expected (although not without intense intraparty wrangling and deal making along the way) to pass along party lines, via reconciliation.
With regard to the Administration’s ability to influence OPEC, well, here’s from Bloomberg’s Eddie van der Walt this morning:
“Oil prices dipped after the White House called on OPEC+ to increase production — but a look at similar moves during the previous administration suggests the move will fade.
Between April 20, 2018 and March 28, 2019, Donald Trump — who expressed much of his foreign policy on social media — tweeted nine times calling on OPEC to increase production.
On average, the price of WTI fell 1.06% from the close the day before he tweeted to the close the next day. But wait a week, and any losses in the oil price were wiped out completely. In fact, the U.S. benchmark was on average 0.1% higher than before.”
Asian equities were mixed overnight, with exactly half of the markets we track closing higher.
Europe’s nicely green so far this morning, with all but 3 of the 19 bourses we follow trading up as I type.
US stocks are mixed to start the day: Dow up 192 points (0.54%), SP500 up 0.10%, SP500 Equal Weight up 0.27%, Nasdaq 100 down 0.37%, Nasdaq Comp down 0.39%, Russell 2000 down 0.55%.
The VIX (SP500 implied volatility) sits at 16.17, off 3.69%.
Oil futures are down 1.07%, gold’s up 0.87%, silver’s up 0.51%, copper futures are down 0.03% and the ag complex is down 0.11%.
The 10-year treasury is down (yield up) and the dollar is down 0.12%.
Led by gold miners, utilities, gold, Mexican equities and materials — but dragged by solar stocks, ALB (lithium miner), MP (rare earth miner), oil services and healthcare stocks — our core mix is up 0.23% to start the session.
A perhaps timely quote from Will and Ariel Durant’s classic The Lessons of History:
“We conclude that the concentration of wealth is natural and inevitable, and is periodically alleviated by violent or peaceable partial redistribution. In this view all economic history is the slow heartbeat of the social organism, a vast systole and diastole of concentrating wealth and compulsive recirculation.”
Have a great day!