Dow dropped 125, decliners over advancers more than 4-1 & NAZ fell 35. The Financial Index was down 2 to the 201s. The MLP & REIT indices were each off fractionally, junk bond funds were mixed & Treasuries rose. The yield on the 10 year Treasury has fallen 20 basis points in 2 weeks from a greater desire for risk averse investments. Oil dropped for a 2nd day on speculation oil producers would restore Gulf of Mexico output quickly after Tropical Storm Isaac passed. Gold prices hardly budged.
Photo: Yahoo
The number seeking unemployment benefits was unchanged last week at 374K, suggesting slow improvement in the job market. The Labor Dept said that the 4-week moving average increased to 370K. Applications for unemployment benefits reflect the pace of layoffs & have risen slightly over the past 3 weeks, though they remain lower than in spring, when hiring nearly stalled. Last week's number was revised upward to 374K from the 372K that was reported initially. Still, when applications fall consistently below 375K, it generally indicates that hiring is strong enough to lower the unemployment rate. The latest applications data suggest that the gov employment report for Aug (released next week) will show job gains near the recent monthly average of 100K, not enough to drive down unemployment significantly. Today's report said the number receiving benefits continues to decline, falling to 5.5M, down 62K from the previous week.
Jobless Claims in U.S. Unchanged Last Week at One-Month High
Photo: Bloomberg
Americans spent at the fastest pace in 5 months in Jul after earning a little more. The increase in income & consumer spending could help boost an economy mired in subpar growth. Consumer spending rose 0.4% in Jul from Jun, according to the Commerce Dept. That followed no change in Jun & a slight decline in May. Income grew 0.3%, matching the gains from May & Jun. Americans also earned 0.3% more after paying taxes. The savings rate after taxes dipped to 4.2% in Jul, down slightly from 4.3% in Jun, the highest in a year. Call this moderately good news.
Photo: Yahoo
Expressing alarm at Europe's debt problems, Chinese Premier Wen Jiabao called on Greece, Spain & Italy to embrace budget cuts & get their finances in order after meeting with visiting German Chancellor Merkel. Wen said China is willing to keep buying European bonds but gave no sign China will bail out the eurozone. Merkel was in Beijing for talks aimed at boosting trade & allaying Chinese fears about Europe's heavy go debts. China has a stake in a resolution because Europe is its biggest export market & it holds $B in European bonds. "The European debt crisis has continued to worsen, giving rise to serious concerns in the international community. Frankly speaking, I am also worried," Wen said. He cited uncertainty over whether Greece leaves the eurozone & whether Italy & Spain will take "comprehensive rescue measures," a reference to spending cuts & tax increases to balance their budgets. "Resolving these two problems rests with whether Greece, Spain, Italy and other countries have the determination for reform," the premier said. "Resolving the European debt problem requires fiscal tightening and finding balance within individual economies." Wen's comments were unusually pointed for China, which says govs should not interfere in each other's affairs. But the country's leaders are increasingly worried about the safety of their European debt holdings & European economies where Chinese companies are expanding. The European Financial Stability Fund, set up to lend to troubled govs, says China & other Asian investors have bought 40% of its bonds but has released no other details.
Wen Tells Merkel Spain, Italy, Greece Need More Reforms
While lower, markets are really not doing very much. Volume is light & this decline probably has little meaning. But comments from China were not reassuring that it is around to bailout euro countires in trouble. In addition, there are just 4 months left before federal tax hikes & budget cuts go into effect. I have alwasy believed that Congress will not get its act together before Xmas & then explain the delays as its way of doing a good job. Meanwhile, businesses not sure about what will happen next year are holding off some expansion plans. Dow is holding just over 13K.
AMJ (Alerian MLP Index tracking fund)
Treasury Yields:
U.S. 3-month | 0.091% | |
U.S. 2-year | 0.262% | |
U.S. 10-year | 1.616% |
| CLV12.NYM | ....Crude Oil Oct 12 | ...95.09 | ... 0.40 | (0.4%) |
| GCQ12.CMX | ...Gold Aug 12 | .....1,665.20 | ... 1.30 | (0.1%) |
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The number seeking unemployment benefits was unchanged last week at 374K, suggesting slow improvement in the job market. The Labor Dept said that the 4-week moving average increased to 370K. Applications for unemployment benefits reflect the pace of layoffs & have risen slightly over the past 3 weeks, though they remain lower than in spring, when hiring nearly stalled. Last week's number was revised upward to 374K from the 372K that was reported initially. Still, when applications fall consistently below 375K, it generally indicates that hiring is strong enough to lower the unemployment rate. The latest applications data suggest that the gov employment report for Aug (released next week) will show job gains near the recent monthly average of 100K, not enough to drive down unemployment significantly. Today's report said the number receiving benefits continues to decline, falling to 5.5M, down 62K from the previous week.
Jobless Claims in U.S. Unchanged Last Week at One-Month High
Americans spent at the fastest pace in 5 months in Jul after earning a little more. The increase in income & consumer spending could help boost an economy mired in subpar growth. Consumer spending rose 0.4% in Jul from Jun, according to the Commerce Dept. That followed no change in Jun & a slight decline in May. Income grew 0.3%, matching the gains from May & Jun. Americans also earned 0.3% more after paying taxes. The savings rate after taxes dipped to 4.2% in Jul, down slightly from 4.3% in Jun, the highest in a year. Call this moderately good news.
Expressing alarm at Europe's debt problems, Chinese Premier Wen Jiabao called on Greece, Spain & Italy to embrace budget cuts & get their finances in order after meeting with visiting German Chancellor Merkel. Wen said China is willing to keep buying European bonds but gave no sign China will bail out the eurozone. Merkel was in Beijing for talks aimed at boosting trade & allaying Chinese fears about Europe's heavy go debts. China has a stake in a resolution because Europe is its biggest export market & it holds $B in European bonds. "The European debt crisis has continued to worsen, giving rise to serious concerns in the international community. Frankly speaking, I am also worried," Wen said. He cited uncertainty over whether Greece leaves the eurozone & whether Italy & Spain will take "comprehensive rescue measures," a reference to spending cuts & tax increases to balance their budgets. "Resolving these two problems rests with whether Greece, Spain, Italy and other countries have the determination for reform," the premier said. "Resolving the European debt problem requires fiscal tightening and finding balance within individual economies." Wen's comments were unusually pointed for China, which says govs should not interfere in each other's affairs. But the country's leaders are increasingly worried about the safety of their European debt holdings & European economies where Chinese companies are expanding. The European Financial Stability Fund, set up to lend to troubled govs, says China & other Asian investors have bought 40% of its bonds but has released no other details.
Wen Tells Merkel Spain, Italy, Greece Need More Reforms
While lower, markets are really not doing very much. Volume is light & this decline probably has little meaning. But comments from China were not reassuring that it is around to bailout euro countires in trouble. In addition, there are just 4 months left before federal tax hikes & budget cuts go into effect. I have alwasy believed that Congress will not get its act together before Xmas & then explain the delays as its way of doing a good job. Meanwhile, businesses not sure about what will happen next year are holding off some expansion plans. Dow is holding just over 13K.
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