Dow was off 11, decliners over advancers 3-2 & NAZ climbed 4. The MLP index rose 2+ to the 364s & the REIT index slid back 1+ to the 321s. Junk bond funds continued weak & Treasuries saw buying. Oil pulled back to 6 year lows in the 42s while gold gained.
AMJ (Alerian MLP Index tracking fund)
Manufacturing in New York State Slumps
Japan's economy shrank at an annualized pace of 1.6% in Q2 as exports slumped & consumers cut back spending, adding pressure on Prime Minister Abe to step up his policy drive to lift the economy out of decades of deflation. China's economic slowdown & its impact on Asian neighbors has also heightened the chance that any rebound in growth in Q3 will. The gloomy data adds to signs that Japan's economy is at a standstill & heightens pressure on policymakers to offer additional monetary or fiscal stimulus later this year. The contraction in GDP compared with a forecast of a 1.9% fall & followed a revised expansion of 4.5% in Q1. Private consumption, which makes up roughly 60% of economic activity, fell 0.8% from Q1, double the pace expected. It was the first decline since Q2-2014, when a sales tax hike hit consumption, as households spent less on air conditioners, clothing & PCs. Overseas demand shaved 0.3 percentage point off growth as exports to Asia & the US slumped. The data looks likely to force the BOJ to cut its forecast of a 1.5% economic expansion for the current fiscal year when it reviews its long-term projections in Oct.
The averages started the day lower but buying in the last hour has brought them near breakeven. An abundance of dismal economic data around the world is a kick in the head the markets don't appreciate. The most disturbing is the US data which is an extension of data during this long recovery. Improvement comes in fits & starts, & GDP growth has been only ho-hum. There is nothing coming to suggest this pattern will change anytime soon.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLV15.NYM | ....Crude Oil Oct 15 | ...42.58 |  ...0.53 | (1.2%) |
| GCQ15.CMX | ...Gold Aug 15 | .....1,122.00 | ...9.10 | (0.8%) |
Manufacturing in the New York
region slumped at the fastest pace since the depths of the last
recession, according to the Federal Reserve Bank of New York. Its Empire State index plunged to
minus 14.9 in Aug, the lowest level since Apr 2009, from 3.9 the
prior month. Readings less than zero signal contraction. Gauges of
orders & sales also retreated. A rising dollar that makes American goods more expensive for
customers overseas is hurting exports, leaving factories with too many
goods in stock. At the same time, New York manufacturers were the most
optimistic about the future than at any time in the past 4 months, a
sign the slowdown is likely to be short-lived. Factories nationally had enough stockpiles
on hand to satisfy 1.35 months’ supply given the current pace of sales,
matching the highest since Aug 2009. The gauge of expectations 6 months from now climbed
to 33.6, the highest since Apr.
Manufacturing in New York State Slumps
China’s economy is growing more slowly than official data suggests &
below potential, helping explain why
policy makers have stepped up stimulus & the move to boost exports
with a weaker yuan. The economy expanded 6.3% in H1, compared to the
officially reported 7%, according to the estimate of economists last week. For the full year, a 6.6% pace was
the forecast & they
estimate the economy’s potential expansion pace for this year is 7%. The gap between the potential & estimated real rate of expansion highlights a cyclical slowdown
that the gov is trying to plug with looser monetary policy,
increased fiscal support, & a weaker currency. The monthly GDP tracker has pegged growth below 7% all
year, clocking a 6.6% in Jul. China’s Communist gov announces growth
targets at annual confabs each year in a hangover from its
Soviet-inspired past. The accuracy of the nation’s data has been
questioned for years, with anomalies including discrepancies between
regional & national numbers and inflated trade figures.
China GDP Slower Than Official Data Helps Explain Stimulus
Japan's economy shrank at an annualized pace of 1.6% in Q2 as exports slumped & consumers cut back spending, adding pressure on Prime Minister Abe to step up his policy drive to lift the economy out of decades of deflation. China's economic slowdown & its impact on Asian neighbors has also heightened the chance that any rebound in growth in Q3 will. The gloomy data adds to signs that Japan's economy is at a standstill & heightens pressure on policymakers to offer additional monetary or fiscal stimulus later this year. The contraction in GDP compared with a forecast of a 1.9% fall & followed a revised expansion of 4.5% in Q1. Private consumption, which makes up roughly 60% of economic activity, fell 0.8% from Q1, double the pace expected. It was the first decline since Q2-2014, when a sales tax hike hit consumption, as households spent less on air conditioners, clothing & PCs. Overseas demand shaved 0.3 percentage point off growth as exports to Asia & the US slumped. The data looks likely to force the BOJ to cut its forecast of a 1.5% economic expansion for the current fiscal year when it reviews its long-term projections in Oct.
Japan Economy Shrinks in the Second Quarter
The averages started the day lower but buying in the last hour has brought them near breakeven. An abundance of dismal economic data around the world is a kick in the head the markets don't appreciate. The most disturbing is the US data which is an extension of data during this long recovery. Improvement comes in fits & starts, & GDP growth has been only ho-hum. There is nothing coming to suggest this pattern will change anytime soon.
Dow Jones Industrials
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