Dow sank 200, decliners over advancers more than 2-1 & NAZ dropped 41. The MLP index lost 3+ to the 334s & the REIT index was fractionally higher to the 304s. Junk bond funds crawled higher & Treasuries advanced. Oil dropped to the 45s while gold rallied.
AMJ (Alerian MLP Index tracking)
The Federal Reserve (FED) decision to delay raising interest rates could make an already-murky situation even more unsettled. A number of analysts believe the FED has likely exacerbated the strong sense of uncertainty that has permeated markets in recent weeks & contributed to high levels of volatility. In its statement, the FOMC maintained its prior guidance, saying its first interest-rate increase will come after “some further improvement in the labor market” and when officials are “reasonably confident” inflation will move back to the central bank’s 2% annual target. That’s essentially the same language it has been using for months in its efforts to prepare markets for an eventual rate hike. By not changing the language, it leaves investors wondering what criteria or benchmarks the FED is using to determine the proper timing of a rate hike. Fed Chair Janet Yellen at her press conference stressed that “the great majority” of FED economists still believes rates will move higher “by the end of this year.” Responding to a question about ongoing turmoil in global markets that could impact future FED policy, Yellen conceded “we can’t expect that uncertainty to be fully resolved.” Consequently, the FED chose to take more time to determine how that turmoil may impact US markets. In other words, improved clarity isn’t likely on the horizon.
The Conference Board's leading economic index edged up 0.1% in Aug after a flat reading in Jun. "The U.S. LEI suggests economic growth will remain moderate into the New Year, with little reason to expect growth to pick up substantially," said Ataman Ozyildirim, director of business cycles & growth research at The Conference Board.
JPMorgan Chase, a Dow stock, Q3 markets revenue is running "about the same as everybody else," CEO Jamie Dimon said after 2 major competitors had said their revenues were down about 5% from a year earlier. He said that during 3 volatile weeks in Aug the investment bank's trading volume was "very slow" & while the results "weren't really great," he added they were "pretty good. I liked the fact that we could trade through those days & not lose any money." He called a recent slowdown in growth in the Chinese economy "a speed bump" & said that even if the rate of expansion is 5%, it would "not be a devastating thing for the world." He warned that the bank may spend "a little bit of money" to expand its retail operations into a new city in the US & open as many as 100 branches there over 2 years. Because JPM has more than 10% of insured deposits in the US, it is not allowed by law to buy other banks. As a result, it must take the more expensive route of building its own offices in order to expand. Dimon also said JPM intends to take advantage of weakness among European banks to take a bigger share of their capital markets business. The stock fell 1.32. If you would like to learn more about JPM, click on this link:
club.ino.com/trend/analysis/stock/JPM?a_aid=CD3289&a_bid=6ae5b6f7
A sense of reality reached traders yesterday a couple of hours before the close & that was extended today. The FED decision not to raise rates only delays the inevitable. Dragging out the temporary emergence which began a decade ago should not be an excuse to delay an interest rate hike, especially when 25 basis points is not going to upset the US economy. This postponement signals they think significant risk is out there for the global economy. This time the markets are not taking that thought well. Markets are on defense & Dow is back in the red for Sep.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking)
| CLV15.NYM | ...Crude Oil Oct 15 | ...45.55 |  ...1.35 | (2.9%) |
| GCU15.CMX | ...Gold Sep 15 | ...1,141.20 | ...23.90 | (2.1%) |
The Federal Reserve (FED) decision to delay raising interest rates could make an already-murky situation even more unsettled. A number of analysts believe the FED has likely exacerbated the strong sense of uncertainty that has permeated markets in recent weeks & contributed to high levels of volatility. In its statement, the FOMC maintained its prior guidance, saying its first interest-rate increase will come after “some further improvement in the labor market” and when officials are “reasonably confident” inflation will move back to the central bank’s 2% annual target. That’s essentially the same language it has been using for months in its efforts to prepare markets for an eventual rate hike. By not changing the language, it leaves investors wondering what criteria or benchmarks the FED is using to determine the proper timing of a rate hike. Fed Chair Janet Yellen at her press conference stressed that “the great majority” of FED economists still believes rates will move higher “by the end of this year.” Responding to a question about ongoing turmoil in global markets that could impact future FED policy, Yellen conceded “we can’t expect that uncertainty to be fully resolved.” Consequently, the FED chose to take more time to determine how that turmoil may impact US markets. In other words, improved clarity isn’t likely on the horizon.
Fed Makes Murky Situation Even Murkier
The Conference Board's leading economic index edged up 0.1% in Aug after a flat reading in Jun. "The U.S. LEI suggests economic growth will remain moderate into the New Year, with little reason to expect growth to pick up substantially," said Ataman Ozyildirim, director of business cycles & growth research at The Conference Board.
Leading Indicators Nudge 0.1% Higher In August
JPMorgan Chase, a Dow stock, Q3 markets revenue is running "about the same as everybody else," CEO Jamie Dimon said after 2 major competitors had said their revenues were down about 5% from a year earlier. He said that during 3 volatile weeks in Aug the investment bank's trading volume was "very slow" & while the results "weren't really great," he added they were "pretty good. I liked the fact that we could trade through those days & not lose any money." He called a recent slowdown in growth in the Chinese economy "a speed bump" & said that even if the rate of expansion is 5%, it would "not be a devastating thing for the world." He warned that the bank may spend "a little bit of money" to expand its retail operations into a new city in the US & open as many as 100 branches there over 2 years. Because JPM has more than 10% of insured deposits in the US, it is not allowed by law to buy other banks. As a result, it must take the more expensive route of building its own offices in order to expand. Dimon also said JPM intends to take advantage of weakness among European banks to take a bigger share of their capital markets business. The stock fell 1.32. If you would like to learn more about JPM, click on this link:
club.ino.com/trend/analysis/stock/JPM?a_aid=CD3289&a_bid=6ae5b6f7
JPM Revenue to be 'Same as Everyone Else'
J P Morgan (JPM)
A sense of reality reached traders yesterday a couple of hours before the close & that was extended today. The FED decision not to raise rates only delays the inevitable. Dragging out the temporary emergence which began a decade ago should not be an excuse to delay an interest rate hike, especially when 25 basis points is not going to upset the US economy. This postponement signals they think significant risk is out there for the global economy. This time the markets are not taking that thought well. Markets are on defense & Dow is back in the red for Sep.
Dow Jones Industrials
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