Tuesday, September 10, 2013

Markets rise on August China factory output

Dow shot up another 113, advancers ahead of decliners a mild 2-1 & NAZ gained 21 (a new high since the heady days of 2000).  The MLP index rose 2+ to the 441s & the REIT index was flat in the 267s.  Junk bond funds were mixed & Treasuries retreated, taking the yield on the 10 year Treasury near 3%.  Oil & gold tumbled on on prospects for reduced tensions over Syria.

AMJ (Alerian MLP Index tracking fund)

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CLV13.NYMCrude Oil Oct 13106.90 Down 2.62 (2.4%)
GCU13.CMXGold Sep 131,358.00 Down 28.80 (2.1%)

Congressional leaders of both parties will meet on Thurs to discuss gov funding & the debt ceiling.  Harry Reid sent a letter to John Boehner, requesting the meeting.  The 2 will meet along with Mitch McConnell & Nancy Pelosi.  The White House & lawmakers have failed to come up with an enduring compromise to keep the gov running & avoid a rerun of the ongoing showdowns over the debt limit.  House Reps have put together a plan to enact a stopgap gov funding measure by forcing the Senate to take a largely symbolic vote on defunding Obamacare.  The proposal, presented today, would allow a short-term spending measure to be enacted even if the Senate voted not to strip funding from the Obamacare.  Only after the Senate voted on defunding the health-care law would the House deliver a bill to finance the gov.  The politicos are back!

Congressional Leaders Said to Meet on Budget, Debt Ceiling

A woman begs money from passersby at a pathway in Shanghai, China, Tuesday, Sept. 10, 2013. China's economy appears to be gradually rebounding from its deepest slump since the 2008 crisis, but analysts say improvement will depend on the strength of global demand for Chinese exports. (AP Photo/Eugene Hoshiko)

Photo:   Yahoo

China's factory output expanded in Aug at its fastest rate this year in a new sign the economy is recovering from its deepest slump since the 2008 global crisis.  Industrial production rose 10.4%, accelerating from 9.7% in Jul, gov data showed.  The signs of economic revival will ease pressure on Chinese leaders who want to focus on longer-term structural reforms needed to keep economic growth strong.  Communist leaders want to nurture more self-sustaining growth driven by domestic consumption instead of trade & investment.  They responded to the unexpectedly sharp decline in growth this year with higher spending on railway construction & a small business tax cut, but have resisted pressure for a more ambitious stimulus.  Export growth accelerated to 7.2% in Aug from 5.1% in the prior month.  Also in Aug, consumer inflation edged down to 2.6% from 2.7% in Jul.  Wholesale prices that have declined steadily for more than a year fell less sharply in another sign of growing demand.

China August Industrial Output Rises 10.4%

Job openings in the US fell in Jul to the lowest level in 6 months, signaling uneven progress in employment.  The number of positions waiting to be filled declined 180K to 3.69M, from a revised 3.87M the prior month that was weaker than initially reported, according to the Labor Dept.  Hiring rose & layoffs cooled.  The report, following data last week showing payrolls grew less than forecast in Aug, indicating the labor market was struggling to gain momentum at the start of Q3.  Federal Reserve officials, due to meet next Tues & Wed, are debating whether the economy & job market have improved enough to warrant trimming $85B in monthly bond purchases.  Today’s report helps shed light on the dynamics behind the monthly employment figures.  Payrolls expanded 169K workers last month after rising 104K in Jul, Labor Dept data showed.  The jobless rate dropped to 7.3% in Aug, the lowest since Dec 2008, as workers left the labor force.  Today’s Jobs Openings & Labor Turnover Survey (JOLT) report showed the number hired climbed to 4.42M in Jul, keeping the hiring rate at 3.2%.  Job openings decreased at construction companies, retailers, health service providers & gov agencies.  They increased in manufacturing, & accommodation & food services.  The data also showed layoffs waned.  Total dismissals, excluding retirements & those who left their job voluntarily, decreased to 1.5M from 1.6M a month before.  Another 2.27M quit their jobs in Jul, up from 2.21M the prior month.  The quits rate climbed to 1.7% from 1.6%.  In the 12 months ended in Jul, the economy created a net 1.9M jobs, representing 52.1M hires & 50.2M separations.  Considering the 11.5M who were unemployed in Jul, today’s figures indicate there are about 3.1 people vying for every opening, up from about 1.8 when the last recession began in Dec 2007.

Job Openings in U.S. Fell by 180,000 in July to 3.69 Million

Stocks are extending their winning streak to 6 days while a possible attack on Syria remains in the headlines.  Now that Russia is proposing a way out of the attack, investors are continuing to bid up prices.  But Russia's proposal should be treated with caution because there is a lot of doubt about ending this mess quickly.  Meanwhile, the politicos are back & trying to handle gov finances.  My focus is on uncertainty & it is running high on the intl scene and in DC.

Dow Jones Industrials

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