Dow slid back 20, advancers over decliners 4-3 & NAZ declined a bigger 30. The MLP index lost 3 to the 339s & the REIT index added 1+ to the 317s. Junk bond funds were strong & Treasuries retreated. Oil rose to the 48s & gold ran into selling.
AMJ (Alerian MLP Index tracking fund)
Filings for unemployment benefits in the US declined last week to the lowest level since mid-Jul, extending a run of applications near decade lows that shows dismissals remain in check. Jobless claims fell 13K to 263K, the fewest since Jul 18, according to the Labor Dept. The forecast called for 274K applications. Managers are reluctant to trim staffing levels because domestic demand is holding up in the face of diminished global growth expectations. A report last week showed employers are instead reining in the pace of new hires as they assess sales prospects. The 4-week average of claims, a less-volatile measure than the weekly figure, dropped to 267K, the lowest in 2 months, from 270K. The number continuing to receive jobless benefits rose 9K to 2.2M & the unemployment rate among people eligible for benefits held at 1.6%. Claims, since the beginning of Mar, have held below the 300K level that is consistent with strength in the job market.
Jobless Claims in U.S. Fall to Lowest Level Since Mid-July
US holiday season sales should increase by 3.7% in 2015, marking slightly slower growth than last year as consumers fret about a potential gov shutdown & sluggish income growth. The National Retail Federation (NRF) forecast Nov-Dec sales in 2015 at $630B, excluding autos, gas & restaurant sales. The growth rate would be significantly higher than the 10-year average of 2.5%, though slower than the 4.1% increase in 2014. The industry lobby's forecast is a closely watched benchmark for the upcoming holiday season. NRF CEO Matthew Shay said while some economic indicators have improved, US consumers remained "somewhat torn between their desire and their ability to spend" due to worries about the economy. "Potential disruptions from yet another government shutdown in mid-December and a slower pace of job creation and income growth are just a few key factors that will impact holiday shoppers' spending this year," Shay said. The NRF said holiday sales will account for 19% of the industry's $3.2T in annual sales. Many retailers earn an outsized portion of their profits during the holiday. Online sales are expected to increase 6-8% during the holiday to as much as $105B. NPD predicted 2.8-3.2% sales growth, down from 3.5% last year, excluding groceries & autos, for Nov to mid-Jan. The low end of that forecast would mark the slowest growth since 2009. Other groups have also forecast slower growth this holiday season, reflecting concerns about the impact of stagnant income growth as well as turmoil in financial markets. Consulting firm AlixPartners has forecast 2.8-3.4% growth this holiday season, compared with growth of 4.4% in 2014.
The euro area’s pillar of economic strength is starting to show cracks. Germany’s manufacturing industry is taking a hit from cooling demand in emerging markets. 2 of its icons, Deutsche Bank & Volkswagen, are in turmoil. And refugees are flooding across its borders at a weekly rate of 10K. The strains are putting the resilience of Europe’s economic powerhouse to the test after exports in Aug fell the most since the height of the 2009 recession, & factory orders & industrial output unexpectedly declined. The flood of bad news is all the more troubling as the 19-nation euro area strives to sustain an economic revival that remains fragile. German exports slumped 5.2% in Aug from the previous month, the Federal Statistics Office said. That’s the most since the recession of 2009. Imports slid 3.1%, shrinking the trade surplus to €15.3B from €25B. VW, Europe’s biggest carmaker, is reeling from a revelation last month that it installed special software on as many as 11M cars to fool US pollution testers, in a scandal that has repercussions for suppliers & competitors as scrutiny from regulators tightens. Deutsche Bank is considering eliminating a div that’s stood since Germany’s postwar reconstruction. Co-CEO John Cryan is overhauling the bank that came to symbolize the nation’s stature as a global power before interest-rate rigging & currency manipulation scandals tainted its reputation & contributed to the departure of co-CEO Anshu Jain in Jun. The lender said yesterday that it expects a €6.2B loss in Q3 as it writes down the value of its 2 largest divisions & boosts reserves for litigation. Global headwinds prompted Germany’s leading economic institutes to lower their growth forecast today for 2015 to 1.8% from 2.1%. While they maintained their 2016 forecast, also 1.8%, they said the economy is in a state of “muted recovery.”
Markets are resting while they wait for the notes from the last FOMC meeting. Of course, that's history & will say little about what will happen in Oct. The reports on the outlook for retail sales in the US along with a gloomy report from Germany, leader in the euro economic area, are not encouraging, making it unlikely that Dow will crash thru 17K soon.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLX15.NYM | ...Crude Oil Nov 15 | ...48.61 |  .....0.80 | (1.7%) |
| GCV15.CMX | ...Gold Oct 15 | ......1,138.70 | ...10.30 | (0.9%) |
Filings for unemployment benefits in the US declined last week to the lowest level since mid-Jul, extending a run of applications near decade lows that shows dismissals remain in check. Jobless claims fell 13K to 263K, the fewest since Jul 18, according to the Labor Dept. The forecast called for 274K applications. Managers are reluctant to trim staffing levels because domestic demand is holding up in the face of diminished global growth expectations. A report last week showed employers are instead reining in the pace of new hires as they assess sales prospects. The 4-week average of claims, a less-volatile measure than the weekly figure, dropped to 267K, the lowest in 2 months, from 270K. The number continuing to receive jobless benefits rose 9K to 2.2M & the unemployment rate among people eligible for benefits held at 1.6%. Claims, since the beginning of Mar, have held below the 300K level that is consistent with strength in the job market.
Jobless Claims in U.S. Fall to Lowest Level Since Mid-July
US holiday season sales should increase by 3.7% in 2015, marking slightly slower growth than last year as consumers fret about a potential gov shutdown & sluggish income growth. The National Retail Federation (NRF) forecast Nov-Dec sales in 2015 at $630B, excluding autos, gas & restaurant sales. The growth rate would be significantly higher than the 10-year average of 2.5%, though slower than the 4.1% increase in 2014. The industry lobby's forecast is a closely watched benchmark for the upcoming holiday season. NRF CEO Matthew Shay said while some economic indicators have improved, US consumers remained "somewhat torn between their desire and their ability to spend" due to worries about the economy. "Potential disruptions from yet another government shutdown in mid-December and a slower pace of job creation and income growth are just a few key factors that will impact holiday shoppers' spending this year," Shay said. The NRF said holiday sales will account for 19% of the industry's $3.2T in annual sales. Many retailers earn an outsized portion of their profits during the holiday. Online sales are expected to increase 6-8% during the holiday to as much as $105B. NPD predicted 2.8-3.2% sales growth, down from 3.5% last year, excluding groceries & autos, for Nov to mid-Jan. The low end of that forecast would mark the slowest growth since 2009. Other groups have also forecast slower growth this holiday season, reflecting concerns about the impact of stagnant income growth as well as turmoil in financial markets. Consulting firm AlixPartners has forecast 2.8-3.4% growth this holiday season, compared with growth of 4.4% in 2014.
Retail Group Sees 3.7% Rise in Holiday Sales
The euro area’s pillar of economic strength is starting to show cracks. Germany’s manufacturing industry is taking a hit from cooling demand in emerging markets. 2 of its icons, Deutsche Bank & Volkswagen, are in turmoil. And refugees are flooding across its borders at a weekly rate of 10K. The strains are putting the resilience of Europe’s economic powerhouse to the test after exports in Aug fell the most since the height of the 2009 recession, & factory orders & industrial output unexpectedly declined. The flood of bad news is all the more troubling as the 19-nation euro area strives to sustain an economic revival that remains fragile. German exports slumped 5.2% in Aug from the previous month, the Federal Statistics Office said. That’s the most since the recession of 2009. Imports slid 3.1%, shrinking the trade surplus to €15.3B from €25B. VW, Europe’s biggest carmaker, is reeling from a revelation last month that it installed special software on as many as 11M cars to fool US pollution testers, in a scandal that has repercussions for suppliers & competitors as scrutiny from regulators tightens. Deutsche Bank is considering eliminating a div that’s stood since Germany’s postwar reconstruction. Co-CEO John Cryan is overhauling the bank that came to symbolize the nation’s stature as a global power before interest-rate rigging & currency manipulation scandals tainted its reputation & contributed to the departure of co-CEO Anshu Jain in Jun. The lender said yesterday that it expects a €6.2B loss in Q3 as it writes down the value of its 2 largest divisions & boosts reserves for litigation. Global headwinds prompted Germany’s leading economic institutes to lower their growth forecast today for 2015 to 1.8% from 2.1%. While they maintained their 2016 forecast, also 1.8%, they said the economy is in a state of “muted recovery.”
German Exports Slump Most Since 2009 Recession
Markets are resting while they wait for the notes from the last FOMC meeting. Of course, that's history & will say little about what will happen in Oct. The reports on the outlook for retail sales in the US along with a gloomy report from Germany, leader in the euro economic area, are not encouraging, making it unlikely that Dow will crash thru 17K soon.
Dow Jones Industrials
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