Dow dropped 65, decliners over advancers 3-2 & NAZ was off 8. The MLP index lost 2+ to the 267s & the REIT index fell 2+ to the 345s. Junk bond funds were mixed & Treasuries went higher (only modestly). Oil was down pennies (more below) & gold jumped up to 1300 on growing uncertainties round the world.
AMJ (Alerian MLP Index tracking fund)
US stock-index benchmarks opened lower, extending the prior session's selloff that was partially fueled by a terrorist attack in Barcelona & rumors that an economic adviser to Pres Trump might resign. The retrenchment for stocks comes after one of the sharpest downturns of 2017, when the S&P 500 index slumped 1.5% for its biggest one-day percentage drop in 3 months. The Dow & NAZ ended down 1.2% & 1.9%, respectively. The benchmarks are now on track for weekly losses around 0.5%. & the Dow is on pace for its largest 2-week percentage decline since mid-Sep last year, while the NAZ is flirting with its longest weekly losing streak since May 2016 (it has fallen for 4 weeks in a row). Market participants are still focused on the terror attack in Spain, which happened yesterday, killing at least 14 people & injuring scores. Islamic State has claimed responsibility for the terror attack. Hours after the Barcelona incident, police killed 5 alleged terrorists following a separate attack that hurt seven people in Cambrils, a Spanish town southwest of Barcelona.
Consumer sentiment climbed in Aug to a 7-month high as a measure of the outlook for the US economy & personal finances registered the largest one-month advance since the end of 2011, according to Univ of Mich survey data. Sentiment index rose to 97.6 (est. 94) from 93.4 in Jul & the expectations measure jumped to 89 from 80.5 the prior month. The 8.5 point increase in consumer expectations was the biggest in 6 years. The current conditions gauge, which measures Americans' perceptions of their finances, fell to 111 from 113.4. Half of all consumers in each of the last 3 Mich surveys reported that their finances had recently improved, the best reading since 2000, the report showed. Americans were also upbeat about their financial prospects in the year ahead. Stronger household views about their financial well-being probably shows consumer spending will continue to expand & power the economy. A robust labor market remains a primary driver behind the improving attitudes about the economy. A favorable outlook for the economy was anticipated by 55% of all respondents, the highest share in 2 years. The caveat is that most Rep households expected gains, while most Dems forecast declines. The report showed an interesting change in how people are approaching their spending decisions. Confidence in the job market & incomes are playing a greater role, rather than low prices & borrowing costs. Consumer sentiment has recovered following a 2-month slide as Pres Trump's legislative agenda ran into several roadblocks. The partisan divide on economic outcomes has continued to increase as a series of foreign & domestic policy difficulties has refocused attention from plans for infrastructure spending and tax reform. “The precautionary mood of consumers had required price discounts and low interest rates to offset their economic uncertainties, now consumers are more likely to base their spending decisions on a renewed confidence in their jobs and incomes,” Richard Curtin, director of the survey, said. “To be sure, attractive prices & interest rates are still required, but the basic motivation has begun to shift toward a more confident buyer.”
Oil headed for a 3rd weekly drop as US crude output rose to a 2-year high & Chinese refining slowed, signs that the world's 2 biggest consumers may stymie OPEC-led efforts to trim a global glut. Futures were little changed today, but down 3.3% for the week. US production had the biggest weekly advance since Jun, according to Energy Information Administration data, offsetting the largest decline in stockpiles in almost a year. Oil processing in China fell in Jul, the biggest decline for that particular month in 3 years, figures from the National Bureau of Statistics. Oil this month has fluctuated in the tightest range since Feb as production cuts by OPEC & its allies drain a surplus more slowly than expected. West Texas Intermediate for Sep delivery was at $47.29 a barrel, up 20¢. Prices rose 31¢ (0.7%) to $47.09 on Thurs, the first gain in 4 sessions. US crude output rose by 79K barrels a day to 9.5M a day last week, the highest since Jul 2015, the Energy Information Administration reported. Stockpiles have declined for a 7th week to 466M barrels.
Stocks have been rattled by all that is going on in the last couple of weeks. Dow has fallen more than 500 from its recent record high. While gold has been in heavy demand, Treasuries, another safe haven for nervous investors, have had only limited gains. US consumer confidence is still riding high, although that will be vulnerable when the update is done in a couple of weeks. A major worry for the stock market today is for Trump to get new legislation passed which is key for economic growth. That includes adopting a FY 2018 budget for the gov, raising the debt ceiling & major tax reform. As said yesterday, that (along with other bills) has to be considered "iffy" binging on greater demand for gold, the prime safe haven investment.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 46.91 | -0.18 | -0.4% |
| GC=F | Gold | 1,302.50 | +10.10 | +0.8% |
US stock-index benchmarks opened lower, extending the prior session's selloff that was partially fueled by a terrorist attack in Barcelona & rumors that an economic adviser to Pres Trump might resign. The retrenchment for stocks comes after one of the sharpest downturns of 2017, when the S&P 500 index slumped 1.5% for its biggest one-day percentage drop in 3 months. The Dow & NAZ ended down 1.2% & 1.9%, respectively. The benchmarks are now on track for weekly losses around 0.5%. & the Dow is on pace for its largest 2-week percentage decline since mid-Sep last year, while the NAZ is flirting with its longest weekly losing streak since May 2016 (it has fallen for 4 weeks in a row). Market participants are still focused on the terror attack in Spain, which happened yesterday, killing at least 14 people & injuring scores. Islamic State has claimed responsibility for the terror attack. Hours after the Barcelona incident, police killed 5 alleged terrorists following a separate attack that hurt seven people in Cambrils, a Spanish town southwest of Barcelona.
Stock market extends losses after worst one-day tumble in 3 months
Consumer sentiment climbed in Aug to a 7-month high as a measure of the outlook for the US economy & personal finances registered the largest one-month advance since the end of 2011, according to Univ of Mich survey data. Sentiment index rose to 97.6 (est. 94) from 93.4 in Jul & the expectations measure jumped to 89 from 80.5 the prior month. The 8.5 point increase in consumer expectations was the biggest in 6 years. The current conditions gauge, which measures Americans' perceptions of their finances, fell to 111 from 113.4. Half of all consumers in each of the last 3 Mich surveys reported that their finances had recently improved, the best reading since 2000, the report showed. Americans were also upbeat about their financial prospects in the year ahead. Stronger household views about their financial well-being probably shows consumer spending will continue to expand & power the economy. A robust labor market remains a primary driver behind the improving attitudes about the economy. A favorable outlook for the economy was anticipated by 55% of all respondents, the highest share in 2 years. The caveat is that most Rep households expected gains, while most Dems forecast declines. The report showed an interesting change in how people are approaching their spending decisions. Confidence in the job market & incomes are playing a greater role, rather than low prices & borrowing costs. Consumer sentiment has recovered following a 2-month slide as Pres Trump's legislative agenda ran into several roadblocks. The partisan divide on economic outcomes has continued to increase as a series of foreign & domestic policy difficulties has refocused attention from plans for infrastructure spending and tax reform. “The precautionary mood of consumers had required price discounts and low interest rates to offset their economic uncertainties, now consumers are more likely to base their spending decisions on a renewed confidence in their jobs and incomes,” Richard Curtin, director of the survey, said. “To be sure, attractive prices & interest rates are still required, but the basic motivation has begun to shift toward a more confident buyer.”
Surge in Expectations Drives Gain in U.S. Consumer Sentiment
Oil headed for a 3rd weekly drop as US crude output rose to a 2-year high & Chinese refining slowed, signs that the world's 2 biggest consumers may stymie OPEC-led efforts to trim a global glut. Futures were little changed today, but down 3.3% for the week. US production had the biggest weekly advance since Jun, according to Energy Information Administration data, offsetting the largest decline in stockpiles in almost a year. Oil processing in China fell in Jul, the biggest decline for that particular month in 3 years, figures from the National Bureau of Statistics. Oil this month has fluctuated in the tightest range since Feb as production cuts by OPEC & its allies drain a surplus more slowly than expected. West Texas Intermediate for Sep delivery was at $47.29 a barrel, up 20¢. Prices rose 31¢ (0.7%) to $47.09 on Thurs, the first gain in 4 sessions. US crude output rose by 79K barrels a day to 9.5M a day last week, the highest since Jul 2015, the Energy Information Administration reported. Stockpiles have declined for a 7th week to 466M barrels.
Stocks have been rattled by all that is going on in the last couple of weeks. Dow has fallen more than 500 from its recent record high. While gold has been in heavy demand, Treasuries, another safe haven for nervous investors, have had only limited gains. US consumer confidence is still riding high, although that will be vulnerable when the update is done in a couple of weeks. A major worry for the stock market today is for Trump to get new legislation passed which is key for economic growth. That includes adopting a FY 2018 budget for the gov, raising the debt ceiling & major tax reform. As said yesterday, that (along with other bills) has to be considered "iffy" binging on greater demand for gold, the prime safe haven investment.
Dow Jones Industrials
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