Dow dropped 166, decliners over advancers 2-1 & NAZ was off 137. The MLP index lost 2+ to the 177s & the REIT index fell 4+ to the 462s. Junk bond funds slid lower & Treasuries continued weak. Oil was hit with profit taking in the 72s & gold fell 4 to 1752 (more on both below).
AMJ (Alerian MLP Index tracking fund)
Restaurants around the county were looking ahead to the economy's reopening over the last few months, as Covid vaccines became more widespread & pent-up consumer demand was palpable. But headwinds from supply chain disruptions to a labor shortage & rising costs are hitting the industry as the contagious delta variant clouds hopes of a return to normalcy. Food, restaurant & hospitality small business owners are more worried than most about the pandemic's continued disruptions to operations, according to new data from the Goldman Sachs 10,000 Small Business Voices program. The data found 84% of owners in these sectors are concerned about the impact of rising Covid-19 infection rates on business, compared with 75% of the overall small business population. Nearly all have seen an increase in operating costs, with 93% saying inflationary pressures have risen since Jun, having negative effects on finances. The data subset of 117 food, restaurant & hospitality owners comes from a broader survey of 1145 participants in the Goldman Sachs 10,000 Small Businesses program earlier this month. The figures underscore the sustained pressure facing restaurants even in an economy that has rebounded from the worst of the damage inflicted by the coronavirus. While the rollout of vaccines & looser public health restrictions have moved the industry closer to normalcy, challenges abound as restaurant owners look toward the fall. Labor challenges have also hit restaurant, food & hospitality owners at higher rates than seen in the broader small business community. The data show 79% of those business owners say workforce challenges have worsened since before the pandemic, compared with 64% overall. Recent data from the National Federation of Independent Business underscores the labor issues weighing on small business optimism. Unfilled job openings were above the 48-year historical average in Aug for the 2nd month in a row. As the pandemic taxes restaurant operators, Goldman's data found nearly 40% of food & hospitality businesses say they expect to have to take out a loan or line of credit for their business this fall or winter. That compares with 29% of businesses overall. The Small Business Administration recently announced an overhaul to the Economic Injury Disaster Loan program for businesses. The loan cap will increase to $2M & recipients will be allowed to use the funds to prepay business debt, which would let restaurants put the money toward commercial debt & more. Beyond these changes, small business & restaurant owners & advocates have called on lawmakers to replenish the $28.6B Restaurant Revitalization Fund. It provided grants to the industry but was quickly tapped out due to high demand.
Consumer sentiment rose less than expected in Sep. The preliminary reading of the University of Michigan consumer sentiment index, which is considered one of the most up-to-date assessments of the US economy, rose 0.7 points in Sep to 71.0. The forecast called for an increase to 72.0. The current conditions index fell 1.4 points to 77.1 & the expectations index jumped 2 points to 67.1.
An independent committee advising the FDA is convening to weigh data on Pfizer's (PFE) COVID-19 vaccine booster shot & vote whether current evidence supports approval for use in people 16 years & older. The country's plan for a booster shot rollout among the larger US population has been mired with conflicting views from experts, including 2 senior FDA advisers stepping down over the issue, arguing that data don't support administration of a booster shot for most Americans. Top health officials last month issued a plan to begin offering boosters developed by Moderna (MRNA) & PFE starting the week of Sep 20 but since advised only a review of data relating to PFE's shot would meet the deadline. The booster debate also exists in the context of global vaccine equity issues, as roughly ½ of the population around the world remains unvaccinated, & leaders at the World Health Organization have urged wealthier countries to halt booster shot rollout until at least the end of the year.
Gold futures ended lower, with prices tallying a 3rd consecutive session loss & a 2nd weekly decline in a row, as the $ strengthened ahead of the Federal Reserve's policy meeting next week. Dec gold declined by $5 to settle at $1751 an ounce, following a 2.1% decline yesterday. Prices, based on the most-active contract, logged their lowest settlement since Aug 10. Bullion also marked a 2nd straight weekly drop, down 2.3% for the week. That was its first successive weekly fall since the 3-week period ended Jun 18. A better-than-expected report on Aug retail sales yesterday was partially credited with boosting the $ & weakening bullion. Retail sales increased 0.7% last month & the forecast was for a 0.7% drop. That data, along with a batch of others, is raising the prospect that the Fed during its Sep 21-22 meeting could aim to announce a tapering of its bond buying program that was implemented to provide liquidity to the market during the worst of the COVID disruptions last year. Also, the University of Michigan consumer sentiment index rose to 71 in Sep from 70.3 in prior month. The increase was a bit below market expectations.
The markets were in the red all day. For the week the Dow slid back all of 25, The virus keeps fighting back hard & that is putting a damper on the recovery. Of course, a sluggish congress in DC is not helping build enthusiasm for investors. A lot of investors are nervous in anticipation of the FOMC announcing next week it will begin tapering its bond buying program. Watch on Wed!!
Dow Jones Industrials