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U.S. Consumer Sentiment Drops More Than Initially Estimated In March

Revised data released by the University of Michigan on Friday showed consumer sentiment in the U.S. fell by more than initially estimated in the month of March.

The report showed the consumer sentiment index for March was downwardly revised to 59.4 from the preliminary reading of 59.7. Economists had expected the index to be unrevised.

With the unexpected downward revision, the consumer sentiment was at its lowest level since hitting 55.8 in August of 2011.

“Inflation has been the primary cause of rising pessimism,” said Surveys of Consumers chief economist Richard Curtin. “Inflation was mentioned throughout the survey, whether the questions referred to personal finances, prospects for the economy, or assessments of buying conditions.”

He added, “When asked to explain changes in their finances in their own words, more consumers mentioned reduced living standards due to rising inflation than any other time except during the two worst recessions in the past fifty years.”

The report showed one-year inflation expectations jumped to 5.4 percent in March from 4.9 percent in February, reaching the highest level since November 1981.

The current economic conditions index edged down to 67.2 in March from 68.2 in February, while the index of consumer expectations slumped to 54.3 from 59.4.

Gold Futures Settle Lower On Rate Hike Fears

Gold prices edged lower on Friday amid fears of aggressive monetary tightening by the Federal Reserve. However, with rising inflation, and tensions due to the ongoing war in Ukraine boosting its safe-haven appeal, the yellow metal posted a weekly gain.

Higher Treasury yields weighed on gold. Bond yields stayed firm at multi-year highs amid rising prospects of some sharper interest rate hikes.

A somewhat subdued dollar limited gold’s downside.

Gold futures for April ended down by $8.00 or about 0.4% at $1,954.20 an ounce. Gold futures gained 1.3% in the week.

Silver futures for May drifted down $0.305 to settle at $25.615 an ounce, while Copper futures for May settled at $4.6985 per pound, down $0.0440 from the previous close.

Chicago Fed President Charles Evans said Thursday he’s “comfortable” with raising rates in quarter-point increments, while being “open” to a 50 basis-point move if needed.

Evans expects six more 25 basis point increases in the central bank’s policy interest rate by the end of the year and three more next year, putting the Fed funds rate in a range of 2.75- 3 percent by the end of 2023.

In economic news today, a report released by the National Association of Realtors showed an unexpected drop in pending home sales in February.

NAR said its pending home sales index tumbled by 4.1% to 104.9 in February after plunging by 5.8% to a revised 109.4 in January. The continued decrease came as a surprise to economists, who had expected the index to rebound by 1%.

Meanwhile, revised data released by the University of Michigan showed consumer sentiment in the U.S. fell by more than initially estimated in the month of March. The report showed the consumer sentiment index for March was downwardly revised to 59.4 from the preliminary reading of 59.7. Economists had expected the index to be unrevised.

With the unexpected downward revision, the consumer sentiment was at its lowest level since hitting 55.8 in August of 2011.

Oil Futures Rebound After News About Strike On Storage Depot In Jeddah

After struggling for support earlier in the session, crude oil prices rallied Friday afternoon, lifted by news about a missile strike at an oil storage depot in Saudi Arabian city Jeddah.

The attack was reportedly launched by Yemeni Houthi rebels. A spokesman for the outfit is reported to have said that the group would announce more details on a wide operation in Saudi Arabia later in the day.

West Texas Intermediate Crude oil futures for May ended higher by $1.56 or about 1.4% at $113.90 a barrel, off the session’s low of $108.62 a barrel. WTI futures gained nearly 12% in the week.

Brent crude futures were up $1.07 or 0.9% at $120.10 a barrel a little while ago.

Videos posted in the media revealed the location of the storage that was attacked was near the North Jeddah Bulk Plant. Meanwhile, a Reuters source said a Saudi Aramco facility had been hit.

Oil prices slipped on Friday, with some supply concerns easing after a partial export resumption from Kazakhstan’s CPC crude terminal, while the European Union remained split on whether to impose an oil embargo on Russia.

Brent crude fell $1.29, or 1.1 per cent, to $117.74 a barrel at 1049 GMT and U.S. West Texas Intermediate (WTI) crude slid $1.80, or 1.6 per cent, to $110.54 after both had dropped more than 2 per cent the previous session.

Despite the fall, both benchmarks were heading for their first weekly gain in three weeks. Brent was on track for a 9 per cent jump and WTI for a 6 per cent rise as broader supply concerns sparked by Russia’s invasion of Ukraine underpinned the market.

Concerns were heightened after the Caspian Pipeline Consortium (CPC) terminal on Russia’s Black Sea coast stopped exports on Wednesday after being damaged by a storm.

The terminal partially resumed oil loadings on Friday, according to two sources familiar with the process and shipping data on Refinitiv Eikon.

The United States and Britain, both less reliant on Russian oil than the European Union, have imposed bans on Russian crude. The EU, which is heavily dependent on Russian oil and gas, faces a bigger dilemma over whether to impose sanctions on the sector.

“As the single largest buyer of Russian oil, the more rapidly Europe seeks to cut Russia’s imports, the higher global oil prices will rise,” J.P. Morgan analysts said in a note.

OPEC sources said the producer group’s officials believe that a possible EU ban on Russian oil would hurt consumers and that it had conveyed its concerns to Brussels.

With global stockpiles at their lowest since 2014, analysts said the market remained vulnerable to any supply shock.

Prices were also pressured by the potential for another coordinated release of oil from storage by the United States and its allies to help to calm oil markets.

Responding to market volatility, the Intercontinental Exchange (ICE) raised margins for Brent futures by 19 per cent for the May contract from Friday, the third rise this year.

Futures margin rates are increased when markets are volatile and the move makes transactions more expensive because it forces traders to increase the deposit they hold at the exchange for each contract to prove they can deliver on obligations.

In a bid to ease gas supply worries, the United States said it will work to ensure additional liquefied natural gas (LNG) volumes for the EU market of at least 15 billion cubic meters (bcm) in 2022, with increases expected in the future.

https://www.foxnews.com/politics/biden-warns-americans-food-shortage-gonna-be-real-following-sanctions-russia

President Biden said Thursday that a food shortage is “gonna be real” following the sanctions that were placed on Russia by the U.S. government as a result of Russian President Vladimir Putin‘s invasion into Ukraine.

“With regard to food shortage, yes we did talk about food shortages, and it’s gonna be real,” Biden said during a press conference at a NATO summit in Brussels, Belgium, following a meeting with other world leaders.

https://www.foxnews.com/world/erdogan-ukraine-and-russia-nearing-consensus-on-4-of-6-key-issues-to-ending-the-war

Turkish President Recep Tayyip Erdoğan claimed on Thursday that Russian President Vladimir Putin and Ukraine President Volodymyr Zelenskyy are nearing “consensus” on key issues to resolve the Russia-Ukraine war. Turkey has been hosting diplomatic talks between the nations.

“We will continue our talks with both Mr. Putin and Mr. Zelensky from now on as well,” Erdoğan said, according to his presidential office. “All our efforts aim to create an atmosphere of peace by bringing together the two leaders.”

https://www.cnbc.com/2022/03/25/eu-strikes-gas-deal-with-the-us-as-it-seeks-to-cut-its-reliance-on-russia.html

• U.S. President Joe Biden and European Commission President Ursula von der Leyen announced the formation of a joint task force to bolster energy security for Ukraine and the EU for next winter and the following one.
• The primary goals of the task force, the U.S. and EU said in a joint statement, would be to diversify LNG supplies in alignment with climate objectives and reduce demand for natural gas.
• It comes amid heightened concern that energy-importing countries continue to top up President Vladimir Putin’s war chest with oil and gas revenue on a daily basis.

ENERGY
Oil prices see-saw amid hopes of Iran deal, supply woes linger

https://www.cnbc.com/2022/03/24/oil-markets-iran-nuclear-talks.html

https://www.nasdaq.com/articles/west-fraser-timber-co.-ltd.-wfg-outpaces-stock-market-gains%3A-what-you-should-know

West Fraser Timber Co. Ltd. (WFG) Outpaces Stock Market Gains: What You Should Know

Stock futures bounce Thursday as investors shake off Russia-Ukraine, Fed concerns

Stock futures rose early Thursday morning as investors tried to recover from declines in Wednesday’s regular trading session.

Dow Jones Industrial Average futures rose about 120 points, or 0.3%. S&P 500 added 0.5% and Nasdaq 100 futures rose 0.5%.

Investors are continuing to monitor the war in Ukraine and weigh the Federal Reserve’s rate hikes amid persistent inflation.

NATO leaders met in Brussels Thursday to discuss increasing pressure on Russia, as Ukraine appears to be retaking ground in the war.

Last week, the Fed raised interest rates for the first time since 2018. Chair Jerome Powell on Monday vowed to be tough on inflation and opened the door for more aggressive half-percentage-point rate hikes.

“The idea of having a soft landing was always going to be really challenging, and when you think about the additional wrinkle of a complication of Russia invasion of the past month, and the surge in commodity prices, it makes it super difficult for Fed to calibrate,” Michael Schumacher, head of macro strategy at Wells Fargo Securities, said on CNBC’s “Fast Money” on Wednesday.

The S&P 500 fell into correction territory late February, but is now 7.5% off its highs. The Dow is also 7% from its intraday record and the Nasdaq Composite is off by 14%.

The indexes posted a big rally last week, notching their best weekly performance since 2020.

Stocks have seesawed this week, alternating between up and down days. The Dow is about 1% lower on the week while the S&P 500 and Nasdaq Composite are little changed.

All three major averages are on track to close the month at least 1% higher.

On Thursday, Spotify rose 3.7% in early morning trading, as Google said it will allow the streaming platform to offer its own billing on Android devices.

Uber gained more than 5% after the company reached a deal to list all New York City taxis on its app, the Wall Street Journal reported.

Olive Garden parent company Darden Restaurants saw shares dip 2% in premarket trading after a weaker-than-expected earnings report before the bell Thursday. KB Home dropped 3.8% after an earnings miss Wednesday.

On the data front, initial jobless claims last week totaled 187,000, the lowest level since 1969, the Labor Department reported Thursday.