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Thursday, September 3, 2015
Markets give up early gains on worries about global growth
Dow was up 23, advancers of decliners 3-2 & NAZ lost 16. The MLP index was off pennies in the 353s & the REIT index added a fraction to the 297s. Junk bond funds edged higher & Treasuries also climbed higher. Oil had a good day, going to the 47s, & gold remained weak.
Mario Draghi just laid it out why a Sep interest rate hike in the US looks increasingly unlikely. The
probability assigned by traders to a Sep 17 rate increase slid to 30% from 38% at the end of Aug after the ECB cut its growth forecasts & unveiled a revamp of its bond-buying
program. Investors bet that the problems the ECB confronting, a weaker outlook for global growth as well as inflation,
make up the same headwinds that will this month deter the Fed from
raising interest rates.
Source: Bloomberg
Investors
are still pricing in a 59% chance the FOMC will raise rates at or before the Dec meeting. The levels
assume the Fed’s target will average 0.375% after the first move,
up from the central bank's current target of zero-to 0.25%.
Boeing, a Dow stock, said Nippon Cargo Airlines scrapped orders for 4-747 freighters worth $1.5B, leaving the planemaker with zero net
orders for the jumbo jetliners this year. The cancellation comes as it prepares to cut output of the
hump-backed 747 to one plane a month amid waning demand for 4-engine
aircraft & an air cargo market struggling to gain lift amid China’s
economic turmoil. Thru the end of Aug, BA had just 29
unfilled orders for the 747-8 (latest model of its iconic jet). The
freighter version is its 2nd-most expensive aircraft, with a
list price of $379M. The twin-engine 777-9 is costliest, with a
$400M price tag. Nippon Cargo still has 2 of the jets on order after
taking delivery of eight 747-8 freighters since Jul 2012. “We work very closely with all of our customers to understand their evolving fleet requirements” BA said. “Nippon Cargo Airlines remains an important customer of the 747-8F.” The stock rose 39¢. If you would like to learn more about BA, click on this link: club.ino.com/trend/analysis/stock/BA?a_aid=CD328&a_bid=6ae5b6f7
Eli Lilly Diabetes pres Enrique Conterno discussed the company’s new drug for patients with type-2 diabetes. Conterno said, a new study found that Jardiance reduces the risk of complications that kills patients with the disease. “Jardiance was involved in a large cardiovascular trial involving
more than 7,000 patients with type-2 diabetes and we basically saw, with
Jardiance, a cardiovascular risk reduction as defined by stroke, heart
attacks and cardiovascular deaths. This is most relevant because, as you
said, heart issues are the number one cause of death for people with
diabetes.” Conterno said this is the first product to provide these kind of results. “We clearly see these type of results as one of a kind and the very
first product to be able to show this. We will characterize this as
extremely good news for patients… for Lilly… Boehringer Ingelheim -- our
partner in this venture,” he added. The stock was off 21¢. If you would like to learn more about LLY, click on this link: club.ino.com/trend/analysis/stock/LLY?a_aid=CD328&a_bid=6ae5b6f7
There is no good explanation for the volatility today, especially ahead of the big jobs numbers coming tomorrow. Chances are good there will be numbers to make every person feel good. Aug data can be tricky to understand with factory layoffs ahead of the big season getting ready for holiday business. As in the past, some traders have left early to enjoy a very long weekend. Dow is down 100 early in the month which has the makings of another difficult time for the markets.
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.8598426662025233)
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