Russia Began Offensive in Donbas… Russian troops began a long-anticipated push into the Donbas region of Ukraine, taking the war to the next level.
What it means— Americans and Western allies are providing Ukraine with more weaponry to use against the Russians on the flat plains of Donbas. This wheat-growing area of the country is energy rich. The longer the war drags on and the more territory it covers, the less Ukrainian wheat and other soft commodity exports we can expect this year. It’s possible that we’re at the start of a food catastrophe in the North African/Middle Eastern region, as many of those nations import food from Ukraine and Russia.
U.S. Oil Exports Briefly Rise Above 10 Million Barrels Per Day… The combination of oil production and releases from the Strategic Petroleum Reserve (SPR) pushed exports to more than 10M b/d for only the second time in history.
What it means— President Biden committed to releasing an average of 1M b/d from the SPR for six months starting on May 1. It looks like we’re getting an early start. The ramped-up release pushed oil prices lower by 6% or so but West Texas and Brent crude remain above $100. There is a rumor that the European Union will ban Russian oil imports next week after the French election. If that happens, then oil prices likely will climb again and take gasoline prices with them, just ahead of the summer driving season.
Housing Starts Rose 0.3% in March, Are up 4% Over Last Year… The construction backlog expanded by 2.3% in March and is 24% higher than last year.
What it means— Home builders are worried about rising interest rates and prices curbing demand, so they’ve turned their attention from single-family homes to multi-family units which are more efficient use of lumber. Single-family home starts dropped last month, while multi-family starts rose 7.5% in March and were 28% higher than at this time last year. Falling levels of construction of single-family homes won’t help buyers, who still face an inventory shortage.
Existing Home Sales Fell 2.7% in March, Are Down 4.5% Over Last Year… Rising prices and higher mortgage rates drove buyers to the sidelines.
What it means— Sellers should be cautious but not yet concerned. The median existing-home sale price increased to a record $375,300, up 15% over last year, and 87% of the homes that sold in March were on the market for less than a month. The National Association of Realtors expects rising mortgage rates to cut sales by 10% this year and likely to lead to a small retrenchment in prices but continued strong demand should dampen any retracement. At the current sales pace, just a two-month supply of homes is available, barely higher than the 1.7-month supply in February and well below the six-month supply that indicates a balanced market.
Biden Administration Brings Back Cumulative EPA Assessments for Federal Construction Projects… The Biden administration revived EPA assessments that go beyond direct and indirect effects to include cumulative effects on air, water, wildlife, and climate.
What it means— The new rules at the EPA reverse moves during the Trump administration. Anyone trying to renovate bridges, build pipelines, etc., will have to make such assessments and then be subject to lawsuits claiming that their evaluations were flawed. The likely outcome will be to give anyone opposing such projects a way to hold them hostage in court for years. Any progress on renovating America’s infrastructure through the bipartisan transportation bill is quickly fading into the future.
Someone Stole a Seven-Foot-Tall Sasquatch Yard Ornament… Someone removed the yard art from the lawn of a home in Park Township, St. Joseph County, Michigan, in late March. The item was cut away from a steel post, likely with bolt cutters. Witnesses say that a white van with dark windows was in the area about the same time. The police might start by questioning the neighbors or the neighborhood association or, better yet, question why someone had such a thing in their yard in the first place.
Data supplied by HS Dent Research
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