Oh, look.
In Los Angeles, I'm Kai Rizdoll. It is Wednesday today. This one is the 13th of
“May. It is always to have you along everybody. So, you remember yesterday, the”
big inflation news, consumer prices rising 3.8% year on year. Oh, for the house in days of 24 hours ago. We learned this morning from the good people at the Bureau of Labor Statistics that producer prices, that is prices at the wholesale level, shot up 6% in April from a year ago. The March to April increase this year was 1.4%. We haven't seen numbers like that since 2022.
During those post-pandemic inflation blues, it is not to be clear a one-for-one
correlation wholesale prices trickling down to the consumer. But it is a real
safe bet that higher prices at retail are coming our way. Marketplace is Kelly Wells gets us going. When Laura Veldkamp saw the numbers this morning, the
“word that came out of her mouth was wow. That's a large rise in prices. She's an”
economics and finance professor at Columbia University. The reason for the wow is these are price hikes that we as consumers haven't even seen yet. This is above and beyond what we've already felt at the gas pump or on the shelf for the store. The cause of that jump in prices, you get one guess. This seems directly
related to the war in the Middle East to the disruption in the fuel supply.
Diesel's up 13% gas is up 16% and that's a problem. Some of these higher energy prices are starting to feed into you know other goods and services prices. Grace's Wemmer with Oxford economics says some of those other prices are obvious. Trucking, freight, passenger transportation, but energy spikes also sneak into grocery prices too. They're what drives a lot of farm equipment, but also
commercial transportation equipment. Now producers have already paid those prices. Gary Brod is managing partner of deep knowledge investing and he says even if the war ended tomorrow and energy prices fell, the producers still have to recoup their higher costs. If the input costs go up, that has to work its way through the system. So Brod says even though prices feel high now, it's a good
time to stock up because they're only going to get worse. Go buy can tuna fish can check bees can beans, stuff like that. So when your grocery bill for really good fresh food, skyrocket, so you can say, you know what, once or twice a week, we're going to eat out of the pantry. Laura Velcamp with Columbia says consumers have about two to four months before the price spikes in today's PPI show up on the
store shelves. I'm Kaylee Wells for Marketplace. This seems an opportune moment speaking of inflation as we are. To let you know that Kevin Worsh was confirmed by the Senate today to succeed. J. Powell is chairman of the Board of Governors of the Federal Reserve. With the job, of course, comes the economic management, shall we
“say challenges presented by today's inflation numbers. Wall Street day honestly”
traders seemed not phased even a tiny little bit by the prospect of rising prices or the war or anything. Actually one word for syllables, the driver of so much in the markets of late tech, nah, low, G. We will have the details when we do the numbers. We talk every now and then on this program about lagging versus leading indicators.
Just like it sounds, lagging data tells us where the economy has been this week's inflation data for instance, lags when old inflation was in April, not what it's gonna be. And while the bond market isn't technically a leading indicator, if you read the tea leaves closely enough, it can tell you where the economy might be headed. Case in point, the yield on the long bond today, the U.S. 30 year treasury
closed above 5%. There is nothing magic about 5% per se, but that is higher than that yield has been in almost a year. And we care about the bond market because treasure yields affect all kinds of consumer lending. But we also care because those rising yields can tell us a lot about what investors inspect in both
The short term and the long market place just in hell has more on the signal.
Bonds are sending right now. Between the hot CPI and PPI reports this week,
bond investors have had plenty of reasons to believe that inflation is getting uncomfortably high. What we've seen is investors pricing in higher, long-term inflation into what they want to receive from lending to the government. That's Luke Tilly, chief economist at Wilmington Trust. He says investors expected inflation
data to pick up this week, since energy prices have been rising ever since the war in Iran started. But Tilly says the fact that inflation is rising in other categories, including trucking and transportation, is a big concern for the federal reserve, because as long as consumers are willing to pay these higher prices? Well, then you would not be really in the mood to be cutting interest rates. You
would want to either hold them where they are or raise them to tamp down on spending
essentially. As a result, bond investors have been demanding higher yields, especially on short-term government bonds, which are more closely tied to what investors think the Fed's going to do. Matthew Miskin, with Manu Life John Hancock Investment, says two-year treasury yields have been picking up, for instance. That suggests, over the next two years, there will be a hike.
But interest rate hikes have consequences. They slow down the economy. And Miskin says that is being reflected by long-term bond yields. In terms of the longer end, it's like, yeah, well, if the Fed then hikes, or has the be more restrictive, then that's not great for longer-term growth.
“Miskin says that's why yields on ten-year treasuries, for instance, haven't been rising”
as quickly as shorter-term yields.
In other words, investors aren't quite as worried about inflation of the long run as they are about inflation this year. George Perk says Necrostrategist at the spoken investment group. An inflation shock today doesn't really tell you anything about where inflation is going to be in the period, starting ten years from now, or twenty years from now.
But Perk says long-term bond yields aren't signaling doom, either. That's because there are still plenty of factors that are boosting the economy, including consumer spending and business investment. What the bond market currently sees is a U.S. economy that is very resilient. And the resilient economy pushes yields higher, too.
I'm Justin Haa, from Marketplace. There are some pretty standard rights of passage of one's teenage years. When Jasper Gould of Brooklyn, New York was in seventh grade, he started wondering what Wall Street was all about, so he Googled it, read some analysis and a book called The Intelligent Investor.
Then he cobbled together a few thousand dollars, mostly from gifts, some work at home and a summer camp, and through a custodial investment account managed by his dad, bought some stocks. As someone who played video games, I understood what Nvidia was at a very surface level. So that excited me.
So did Intel, Microsoft, and Amazon.
“I remember checking my portfolio about a year after probably eighth grade, and I think it”
was up 66% that year, which was pretty significantly strong. Now he's a junior in high school, and co-founder of the Brooklyn Youth Charitable Investment Group, where more than 300 teens invest money from private donors and grants and donate returns. We can make an impact on the world, and we can still do the thing that we're really interested
in. As for his personal portfolio, he says by the time he's in his early 20s, it could potentially be a quote, "life altering some of money." It's very possible that the money I've made from profiting off of artificial intelligence and its advancement in the stock market could, in fact, bail me out from any career troubles
down the line that resulted from artificial intelligence and its invention. Financial uncertainty is one reason why Jonathan Craig thinks teens are interested in the markets. He's head of retail investing at Charles Schwab, full disclosure, a marketplace underwriter. "This generation recognizes that they're growing up in an environment where home ownership
is incredibly expensive, education is expensive, there's a little bit of job uncertainty,
“and I think there's a recognition that if financial dependence is important investing is”
going to have to be a big part of it." Charles Schwab recently announced investor accounts specifically for teens. Like a custodial account, these teen accounts still require a parent or guardian to get started. But instead of needing that adult to complete a trade, a teen can do it on their own, though
there are some guardrails. "They can't use leverage, no derivatives, no futures, no forex."
Parents can see what their teens are up to.
If they lose money, well, at least they learn to something.
“These teen accounts aren't the only option.”
Greenlight, a money management and education app for kids, gives parents the option to approve proposed trades. Fidelity, another marketplace underwriter, also offers youth accounts for teen investors. In lots of institutions from Vanguard to Merrill offer more traditional custodial accounts. Carly Urban at Montana State University says it makes sense for companies to introduce their
products to young potential customers, and to get their parents signed up, too. The urban points out that not everyone will be able to take advantage. "And it's probably going to be the parents with more resources and to trust financial systems who probably are already investors who are going to be all for this."
Urban says it's difficult to know for sure how teens feel about the economy and how many
are actually investing. They just aren't that many big, consistent surveys focused on miners. Though the Siffmo Foundation, which runs a high school competition called the stock market
“game, says participation is up more than 35% over the last decade.”
"So, there are a lot of different ways that we're seeing, could be involved." When at least a Changs dad would bring up stocks and investing at dinner, the senior Ed Valencia High in placenta, California, didn't quite know what he was talking about. So she said out to learn, even going to an investing boot camp. Soon she was researching stocks herself and worked with her dad to buy some stock in
FinTech company food to holdings. She had some Starbucks in her portfolio, too. She likes the drinks. She says she's seen pretty good growth.
"I started off with a lack of confidence at first and I feel like I will resonate with a lot
of people at my school, maybe especially the girls who we don't talk about this at all." She started a local chapter of the Young Investor Society with 20 Some Members. "We'd rather share as much knowledge into the basics and how we could start analyzing." And now she likes that she can keep bonding with her dad, discussing stocks at the dinner table.
I'm Carla Havier from Marketplace. "Without putting too fine a point on it, it is entirely possible the digital and on-demand economy has given we humble American consumers unrealistic expectations." Next day delivery, same day delivery, oh please, 30 minute delivery, now you're talking. Depending on where you live and depending on what it is that you want, Amazon says they
can have it at your door in half an hour or less. Marketplace to Smith Field has today's installment of our every now and then series. Things you didn't know you needed, but the capitalism is giving you. Amazon now is not yet available, we're Brad Jishinsky lives in Southern California, but he can imagine himself using it.
"I have a five month old right now. If we run out of diapers or she needs cold medicine or something, yes I could go drive to the store, but it's worth that few extra dollar fee." Jishinsky is a retail analyst at Gardner and he says right now if he needs something fast to order it from Walmart, then he's able to get it if not quite in 30 minutes, maybe
within an hour or so. For certain items, consumers really value convenience and this now gives Amazon a way to compete. Amazon has long been the company pushing delivery forward, he says. The Amazon brand is almost synonymous with convenience, retail analyst Bruce Winder says consumers expectations are constantly shifting.
Convenience used to be a day or two and then it was same day and then it was a few hours and now it's 30 minutes. He says actually delivering things someone just ordered online in 30 minutes is difficult and complex.
“"You need to have a combination of local infrastructure.”
You need to have algorithms and the right AI set up so you can anticipate what folks need before they even need it. You just need to be able to turn things incredibly quick." Most companies that have super fast delivery including Amazon only offer it on a small number of high demand products.
Mark Wolfrat at Consulting Company, MWPVL International says it's still tough to make it work logistically and financially. "There was a bunch of companies like bikes and gorillas and these guys have promised 15 minute delivery in New York City with grocery merchandise and they all went belly up and tail."
"Because he says the cost structure was just too high. I'm Samantha Fields from Marketplace." Coming up.
It's feeding some primal need of having this like big monster truck.
I mean it does go food, shelter, big monster truck, right?
First though. Let's do the numbers.
“Down DELSTROS down 67 points today, 10%, 49,693, and as DAC, up 314 points.”
That is 1.2%, 26,402, yes, and P500 added 43.6, 10%, 74, and 44. Warmer weather means sandals season is coming. If it isn't already upon us in Birkenstock, maker of the somewhat controversial footwear, reported early today that missed expectations. The German company cited tariffs in currency swings, as reasons why Birkenstock slumped
12, and 9/10 of 1% have you seen the sandals and of course it slumped. In video shares, jump 2 and 3, 10% today on the news that CEO Jensen Wong is joined President Trump's delegation to China don't @me about the Birkenstock thing. Micro-technology in Qualcomm, around that trip to Micron up 4 and 8, 10% Qualcomm listed one, and 4, 10% you're listening to Marketplace.
This Marketplace podcast is supported by Intuit QuickBooks. If you're trying to grow your business, Intuit QuickBooks Workforce can help you lead your business with confidence, clarity, and in a way that makes sense for you. As a sponsor at Marketplace's My Economy, QuickBooks Workforce recognizes that no one person or business's finances are the same.
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can help your business grow at QuickBooks.com/Workforce. This is Marketplace, I'm Kai Rizdahl. We're going to go energy-heavy in this second half of the program oil and its distillates.
“And we begin with the always good to remember trueism that whatever American politicians”
like to say about US crude supply oil trades in a global market. And with supplies as scarce as they are now because of the war with Iran, the International Energy Agency says crude inventories are falling at a record pace. The Agency, which coordinates international reserve releases, says those global stockpiles
are decreasing by about 4 million barrels a day.
That drawdown is yes, helping to keep a ceiling on prices for gas and jet fuel, supply juh-hust about keeping up with demand for now, but as Marketplace is the list of the Troval points out, inventories do not last forever. The International Energy Agency was created to deal with exactly the kind of global energy supply shock we're dealing with right now.
For 50 years, the US and its allies have purchased and held inventories for a rainy day. That's Mark Finley with Ration University, who calls today's crisis. The rainyest of days in oil market history anyway, the ultimate nightmare scenario for energy security and oil is the biggest source of fuel for the US and for the global economy. While we did prepare for this rainy day, every day, we're burning through more of those
emergency stockpiles of oil and fuel. Gregory Brue is with your Asia Group. That is a ticking clock, eventually inventories run down to the level where you can't keep
“drawing from them and you either need to get supply back up and running or you need to”
reduce demand. That comes in the form of even higher prices.
A lot of analysts are pointing to June as the crucial pain point, and that is based on
the current level of consumption remaining consistent or possibly even increasing since the summer tends to be the peak demand for the year. High summer demand at a time of historic supply shortfall, while reserves are being drained and there are no large-scale increases in oil production. Tom Seng is with Texas Christian University.
Every single day that this conflict continues with the straight closed, the situation is just getting worse and worse and worse. And even after we see resolution and a slow recuperation of oil markets. Again, we have to add this new layer and that is replenishing these reserves that we're drawing down because of the conflict.
That's more oil demand. So he says regardless of when this mess ends, pain at the pump is going to last at least for several more months, I'm Elizabeth Troval for Marketplace.
The list of the story was this strategic side of oil and its distillates.
We're going to go now to Wyoming for the more tactical side, and we're going to do
“it with a swing by the Triple A website, which tells us that as of today, a gallon of diesel”
in Wyoming costs you $5.49 a gallon of full dollar more than regular gas there. We have talked on the program before about how diesel prices are hitting long haul trucking and small businesses. Today, another group, people who drive big diesel pickups in their every day. In some mountain-west and northern plain states, one out of every three vehicles on the road
is a pickup truck and double the national average Marketplace of Can'tland 10 has this one. Chelsea Tatum fires up her massive Ford F350 diesel truck, the kind that's got those dual wheels in the rear. She backs the massive truck out of her tiny driveway in lander Wyoming. Plopped on top is a live-in camper. Yeah, you can't see anything.
Definitely smack the rock, I would large folder because they're. She uses the rig for road trips and driving rough terrain to her favorite hiking spots, but today is just show and tell. Tom is no match for the F350 size wise. She leaps out a couple of feet to the ground. She's wearing Lisa Frank crock shoes and bright red lipstick.
“I think it's nice as a woman to have something that's big and I don't tough and loud.”
But that tough and loud feeling burns a hole in her jeans pocket. I'll only get 10 miles to the gallon with the camper on it lately. It's 200 bucks to fill up. So for Tatum to drive the truck instead of her car, it's a lot of math and being okay. How much is going to cost me to get there? It doesn't make sense. Right now, it doesn't.
But that doesn't mean she's going to park it by the side of the road with a first sale sign.
There's something about a big truck that makes a lot of noise that is, I don't know. It's feeding some primal need of having this like big monster truck. In Wyoming, diesel engines, war through neighborhoods, big trucks sandwich small cars and parking lots. And if you don't own one, you know someone who does. My mother, who is 85 years old, she has this gigantic truck.
Melody Edwards has lived in Wyoming for much of her life. I was like, "Mom, would you like to sell that truck?" I mean, it's just her. But no, she must have a giant truck. Edwards is the host of the modern west podcast, which explores the region's culture and
way of life.
And that includes decals.
There's a certain pride in that by a lot of people that they're driving a fossil fuel vehicle and they're loud. That's just how it is. It's just sort of like the soundtrack of the American West. And it's hard to get that song out of your head.
It would be really hard to pry the truck out of people's iron grips. They're not going to give them up easily. In fact, diesel prices have been relatively high since the pandemic. And there's still plenty of Wyomingites driving big diesel trucks.
“Sometimes our snow will just drift all the way over the highway and you need to just”
be able to get through a crazy snow drift. Or you need the big truck for taking care of your animals. I mean, Marda Johan at her place outside of Lander, she's leading a frisky brown and white horse named Clementine. Look at this guy.
My god. Yeah, I'm really feeling like a frisbee right now. Riding horses is the thing she loves to do. People even hire her to take their own horses out for training and exercise. We go not just out of here.
We go, you know, two, three mountain ranges over to kind of get horses and new places in the next boat. Johan pulls her horse trailer with a ram 2500. You're not going to hear it today. It's at the shop coming back from our last trip of hauling the clutch went out on it.
Another expense on top of diesel prices. But she's certainly not selling it. You know, you just kind of get kind of sucked into that spot being like, I guess I have to pay if I want to continue this lifestyle. Because there's just something about a big old diesel.
Land or Wyoming. I'm Caitlin Tan for Marketplace. This final note on the way out, we're going to circle back to the Federal Reserve real quick and the jam the central bank finds itself in with inflation doing what it is doing. Susan Collins, the president of the Federal Reserve Bank of Boston said in some remarks
today that she could see a situation where the central banks next move is an interest rate
Hike, not a cut.
I'll leave you to anticipate the reaction to that from the White House, but I will also
“add here that one of the things that soon to be chair Kevin Worsh has said he wants to do”
is to cut down on public speeches and remarks by Fed officials.
Our media production team includes Brian Allison, John Foky, Montana Johnson, Drew
Justin, Gary O'Peef, and Charlton Thor.
“Alex Simpson is the manager of Media Production and I'm Kyle Rizdall, we will see you”
tomorrow, everybody. This is APM.
“I'm Emily Mechra, host of the Marketplace Podcast.”
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