Stock Futures Rise as TSMC Leads Tech Rally; Oil Futures Slump as Trump Lowers Iran Tensions

High-Income Consumers Are Living Larger, While Others Cut Protein to Make Ends Meet, New Fed Report Finds

FROM 5 minutes ago

Low- and middle-income Americans are switching to generic products, eating less protein, cutting back on travel, and generally having a harder time paying the bills.

That’s according to the Federal Reserve’s Beige Book released Wednesday, which is based on data collected from mid-November to early January. It’s filled with examples from around the country of the “K-shaped” economy, with high-income Americans doing better while others struggle. The Beige Book is a report by eight of the Fed’s branches detailing economic conditions in those regions, compiled by Fed officials who interview local business and community leaders.

Overall, it shows that the economy improved somewhat in December from November, even as hiring remained slow and inflation stayed stubbornly high. While overall economic activity picked up, lower- and moderate-income consumers were squeezed by rising costs and wages that can’t keep up with price hikes.

“Several districts also noted that spending was stronger among higher-income consumers, with increased spending on luxury goods, travel, tourism, and experiential activities,” the report said. “Meanwhile, low- to moderate-income consumers were increasingly price sensitive and hesitant to spend on nonessential goods and services.” 

For example, retail establishments catering to higher-end customers reported increased sales to the Federal Reserve Bank of Minneapolis.

Read the full article here.

–Diccon Hyatt

Why Venezuela Struggles to Produce Oil Despite Having the World’s Largest Reserves

FROM 27 minutes ago

Venezuela holds the world’s largest proven oil reserves—303 billion barrels, about 17% of the global total and more than Saudi Arabia’s 267 billion. Yet Venezuela produces fewer than 1 million barrels per day, less than 1% of global output. That’s less than a third of what it pumped in the late 1990s and early 2000s, when production topped 3.5 million barrels daily.

So what happened? It’s the result of political decisions, economic sanctions, and the sheer difficulty of extracting Venezuela’s heavy crude.

Having oil reserves doesn’t mean you can easily produce it for the world’s markets. Most of Venezuela’s crude is extra-heavy oil, closer in consistency to asphalt than gasoline.

Read the full article here.

–Peter Gratton

Stock Futures Rise as TSMC Leads Tech Rally

FROM 1 hr 17 min ago

Futures contracts associated with the Dow Jones Industrial Average ticked 0.1% higher.

S&P 500 futures pointed 0.4% higher.

Nasdaq 100 futures advanced 0.8%.