| | | | | | | | | | | Axios Markets | | By Emily Peck and Matt Phillips · Aug 24, 2022 | | 🇺🇦 Happy Wednesday folks. And happy Independence Day to the people of Ukraine, whose courage continues to be an inspiration to all democracies. Oh, and readers! Keep the questions on the markets, finance and economics coming. What are you confused, flummoxed or vexed by? We want to know. Don't forget to tell us your name and where you're from. We may use your query in a future newsletter. Today's newsletter is 842 words, a 3.5-minute read. | | | | | | 1 big thing: The Gasman cometh |  | | | Illustration: Maura Losch/Axios | | | | Europe's natural gas crisis is spilling into American markets, Matt writes. Driving the news: U.S. natural gas prices briefly hurdled $10 per million British thermal units (BTUs) on Tuesday, the highest since 2008. They are up more than 150% this year. The move comes amid an astounding rise in European natural gas prices, as a once-unthinkable cessation of Russian supplies to the continent appears imminent. Why it matters: High prices in Europe are also affecting the U.S. market, and will almost certainly push electric and heating bills higher. How it works: With less Russian gas available, Europe is now competing on the global market for supplies, which is pushing up prices worldwide. Winners: U.S. gas producers are sitting pretty. Their stock prices have been among the best-performing in the market over the last month. Losers: Consumers, who will almost certainly see their utility and/or heating bills rise sooner or later. What they're saying: Those who rely on natural gas for their heat — about half the homes in America — could feel the pinch sooner, says Joshua Rhodes, an energy consultant and research associate studying energy systems at the University at Texas, Austin. - "In general, consumers feel natural gas prices fastest on their heating bills," Rhodes said.
What we're watching: The political impact of heating bills heading into the fall and winter, which could reinvigorate voter angst about rising costs of living, despite progress elsewhere on inflation. Go deeper. |     | | | | | | 2. Charted: King Dollar's ascent |  Data: FactSet; Chart: Axios Visuals The dollar is the strongest it's been in 20 years, Matt explains. Driving the news: The U.S. dollar index, which measures the greenback against a basket of currencies, hit its highest level in 20 years this week as Europe's energy crisis battered the single currency. Why it matters: The trajectory of the currency creates winners and losers in the U.S. and world economy. - When the dollar is strong, it helps push down inflation by making imports cheaper for American buyers.
- But it will also make exports of American agricultural and manufactured goods more expensive to foreign buyers, potentially hurting factory towns and the farm belt.
What we're watching: Global industrial conditions, which our colleagues over at Axios Macro recently pointed out, have been showing signs of strain under the mighty buck. Read more. | | | | | | | | 3. Catch up quick | | 🛌 White House sees weaker growth, soft landing for economy. (Axios) 🏚 U.S. house values fell for the first time since 2012, Zillow says. (MarketWatch) ⛽️ Gas prices drop 70 days in a row in the second-longest streak since 2005. (CNN) 🌵 Europe's drought is the worst in 500 years. (BBC) | | | | | | | | A message from Axios | | NEW: Subscribe to Axios Communicators | | |  | | | | Get the latest topics and trends impacting the way leaders, organizations and employers communicate. Why it matters: Axios Communicators will help inform your strategy and offer insight into the rapidly evolving world of sharing and receiving information. Subscribe for free | | | | | | 4. A brand new ADP report |  | | | Illustration: Sarah Grillo/Axios | | | | Next Wednesday, Aug. 31, is a huge day in the statistics world, Axios' Felix Salmon writes. It will see the release of a new dataset that is likely to add a lot of richness and subtlety to how economists — including Federal Reserve board members — understand the labor market. Why it matters: For years, the monthly employment report from the Bureau of Labor Statistics has been alone in hitting the sweet spot between timeliness and accuracy. Now, payroll services provider ADP has put together a new monthly report that it hopes will rival the BLS release on both fronts. The big picture: Historically, the ADP report was aimed at traders, rather than economists. It was a black box, designed to mimic the BLS numbers as closely as possible. The new report, designed with input from Stanford researchers, is designed to be a whole parallel data trove. The bottom line: While the report will be keenly anticipated every month, next week's release is the really big one, because it will come with 12 years of week-by-week historical data. - That could end up changing our understanding of U.S. labor market trends in profound and important ways.
Go deeper. | | | | |  | | | | If you like this newsletter, your friends may, too! Refer your friends and get free Axios swag when they sign up. | | | | | | | | 5. "Bummer summer" perks up |  Data: Morning Consult/Axios Inequality Index; Chart: Kavya Beheraj/Axios Lower gasoline prices are making everyone feel a little better, Emily writes. Americans — especially wealthier ones — cheered up a bit this month, according to a measure of consumer sentiment released today as part of the Morning Consult/Axios Inequality Index. The results were attributed to falling gas prices and a stock market rebound. What's happening: In August, consumer sentiment among adults in households earning more than $100,000 improved by 6.8%, Morning Consult found. For those in households earning less than $50,000, sentiment gained by 4.2%, according to the data. Zoom out: The streak that culminated with this year's "bummer summer" is broken. Consumer sentiment had fallen month over month since last year when the Delta variant crushed hopes for a "hot vax summer," and inflation kept surging. - We're still feeling bad though. "American consumers are still very negative about the economy," said Jesse Wheeler, an economic analyst at Morning Consult.
- The big story here is that sentiment did not decline any further, he said.
What to watch: Was this a blip? The stock market is in limbo at the moment, with investors uncertain about the future of Federal Reserve rate hikes. And gasoline prices are notoriously volatile. Stay tuned. Go deeper. | | | | | | | | A message from Axios | | NEW: Subscribe to Axios Communicators | | | | | | | | Get the latest topics and trends impacting the way leaders, organizations and employers communicate. Why it matters: Axios Communicators will help inform your strategy and offer insight into the rapidly evolving world of sharing and receiving information. Subscribe for free | | | | 🎧 1 thing Emily can't stop thinking about: While I was away on vacation, I got hooked on "Mother Country Radicals," a 10-part podcast about a bunch of radical outlaws from the 1960s and 1970s called the Weather Underground. You've probably heard of them before — one of their members, Bill Ayers, became a big Republican boogeyman type during Obama's first run for president. They're notorious for a series of bombings of various buildings in the 1970s. But this series goes far deeper, Ayers son, Zayd Dohrn, tells the story. His parents had him when they were still on the run from the law. Archival audio from the 60s and 70s puts you in the midst of the action, and Dohrn's thoughtful interviews with his parents and friends paint a complex picture of what it means to devote your life to a cause (and not your kids). |  | | Why stop here? Let's go Pro. | | | | | | Axios thanks our partners for supporting our newsletters. If you're interested in advertising, learn more here.
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