Dow sank 234, decliners over advancers 5-2 & NAZ lost 59. The MLP index fell 2+ to the 279s & the REIT index eased back chump change to the 354s. Junk bond funds eased back slightly & Treasuries had a strong advance, taking the yield on the 10 year Treasury down to 2.07%. Oil went up 1+ to the 48s as refineries in Texas were restarted & gold shot up 17, nearing 1350, on rising North Korea fears.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.9736107245335077)
Stocks slipped while Treasuries rallied the most in 10 months as tensions with North Korea mounted & another Atlantic hurricane threatened to make landfall. The Dow fell 278 at the start of a week packed with central-bank decisions, Federal Reserve speakers & economic data that will help illuminate the path of the global economy. The S&P 500 dropped the most since Aug 17, ending a 6-day rally. 10-year Treasuries climbed amid lingering unease over North Korean plans for a ballistic missile launch, while Hurricane Irma threatened a region already dealing with the devastation from Harvey. West Texas intermediate crude climbed for a 3rd day & gold also rose. The Stoxx Europe 600 Index dropped slightly as the € & ¥ gained. The $ declined amid dovish coments from Fed Governor Lael Brainard. Buyers of 4-week Treasury bills demanded the highest yields since 2008 in today's auction as the deadline to raise the US debt ceiling neared. Big economic news still awaits. Mario Draghi may give more clarity on paring the ECB's bond-buying program when he speaks after a rates decision on Thurs. US durable-goods figures, the trade balance, unemployment claims & the release of the Fed's Beige Book will add to the global data mix after a purchasing managers' index indicated the euro area is poised for the fastest economic expansion in a decade.
Dow Drops, Treasuries Gain as Korea Tensions Mount: Markets Wrap
Federal Reserve interest-rate increases may be “doing real harm” to the US economy, which would help explain why inflation is low and job growth has slowed, said Minneapolis Fed Pres Neel Kashkari, one of the central bank's most dovish policy makers. “It’s very possible that our rate hikes over the past 18 months are leading to slower job growth, leaving more people on the sidelines, leading to lower wage growth, and leading to lower inflation and inflation expectations,” Kashkari said. “These premature rate hikes that we are embarking on, they’re not free, and I think we need to remind ourselves of that.” He has been an outspoken critic of the Fed's drive to tighten monetary policy since he took over at the Minneapolis Fed in 2016. This year, as a first-time voter on the FOMC, he dissented against otherwise-unanimous decisions in Mar & Jun to raise rates. A record of the FOMC's last meeting in Jul showed policy makers puzzled over a recent deceleration in US consumer price inflation despite continued declines in the unemployment rate, which Kashkari said “may be less perplexing than we think.” “We at the Fed might be making one of two fundamental mistakes: Number one, we might be overestimating how tight the labor market is,” Kashkari added. “And number two, we at the Fed may have allowed inflation expectations to drift lower. Both of those, if those really happened, could explain the low wage growth, the low inflation, and the seemingly tight labor market.” Officials are expected to leave rates on hold at their meeting later this month to concentrate on announcing the timing of a gradual process to begin shrinking their $4.5T balance sheet. They projected another hike this year in quarterly forecasts published in Jun that will be updated for the Sep 19-20 gathering. Investors see a roughly one-in-three chance that they'll follow thru with that projection.
China criticized Pres Trump's threat to cut off US.S. trade with countries that deal with North Korea & rejected pressure to do more to halt the North's nuclear development. Trump issued the threat after North Korea on Sun exploded a thermonuclear device, its 6th & most powerful nuclear test. The threat was seen as a warning to China, North Korea's main trading partner & only major ally. A foreign ministry spokesman, Geng Shuang, criticized Trump's stance as unfair to Beijing. "What is definitely unacceptable to us is that on the one hand we work so hard to peacefully resolve this issue and on the other hand our interests are subject to sanctions and jeopardized," Geng said. "This is unfair." Such an approach would be drastic if applied to China, from which the US imports goods worth about $40B a month. Trump said it was under consideration "in addition to other options." Asked whether Beijing' would support tougher UN sanctions such as cutting off oil supplies to North Korea, Geng didn't mention oil but said whatever happened would depend on discussions among council members. Geng said China, one of 5 permanent Security Council members with power to veto UN actions, would take part in a "responsible and constructive way." Geng expressed frustration at Australian Prime Minister Malcolm Turnbull's comment that Beijing had a responsibility to influence North Korea due to its status as the North's main trading partner. "We keep stressing that we cannot solely rely on China to resolve this issue," said Geng. "We need all parties to work in the same direction."
Estimates of the size of a Hurricane Harvey aid package for Texas &nd Louisiana rose last week, with one proposal being drafted for $150B, while the White House promised to make a request for funding soon to Congress. The Trump administration will make a request to Congress shortly for funds to help recovery efforts from Harvey, which caused devastating flooding, White House homeland security adviser Tom Bossert said. He told reporters that an aid funding request will likely come in stages as more is known about the storm's impact. Trump has prepared a request to Congress for an initial $5.9B in aid. Taxpayers are likely to face a bill for Harvey near the $110B for 2005's Hurricane Katrina. Estimates on the amount of the Harvey aid varied widely. Texas Governor Greg Abbott said last week the state could need more than $125B. Figures of $50-80B were cited by others. The Federal Emergency Management Agency's disaster relief fund had only $3.3B when the storm struck. A Rep leadership source said Congress was expected to consider & vote on an initial allocation of Harvey aid in the first ½ of Sep.
Puerto Rico's governor has activated the entire National Guard in the commonwealth ahead of powerful Hurricane Irma, which has strengthened into a Category 5 storm. “We’ve activated the whole National Guard. I did so a couple of days ago, making sure that we have all the prep going,” Puerto Rico Governor Ricardo Rossello said. As a US commonwealth, Puerto Rico is able to activate the National Guard & the governor said the storm's estimated strength caused him to declare a state of emergency yesterday. “We are talking about a 180 miles an hour hurricane with gust at the center going upwards of 200 miles per hour. Right now it’s scheduled to pass somewhere about 40 miles northeast of Puerto Rico, but still the winds would be very damaging and ravaging to Puerto Rico,” Rossello added. Gov. Rossello said the Trump administration has been very supportive in its efforts to activate certain provisions for Puerto Rico. “I actually solicited to the president a pre-landfall emergency declaration so that we can get things moving and have the right resources for the storm,” he said. According to the National Hurricane Center, Hurricane Irma is a “potentially catastrophic” storm with 185 mph winds & gusts up to 220 mph as of today.
Hurricane Irma: Puerto Rico activates National Guard ahead of Category 5 storm
Sep is starting with more than its share of problems. And stocks are being sold. The new storm heading for Puerto Rico & Florida are adding to headaches for traders. This month is statistically the worst one for stocks & that could be repeated this year. Dow has been flattish for more than a month (shown below). Making matters worse, stocks have not had a major selloff years. Hope for the best.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Stocks slipped while Treasuries rallied the most in 10 months as tensions with North Korea mounted & another Atlantic hurricane threatened to make landfall. The Dow fell 278 at the start of a week packed with central-bank decisions, Federal Reserve speakers & economic data that will help illuminate the path of the global economy. The S&P 500 dropped the most since Aug 17, ending a 6-day rally. 10-year Treasuries climbed amid lingering unease over North Korean plans for a ballistic missile launch, while Hurricane Irma threatened a region already dealing with the devastation from Harvey. West Texas intermediate crude climbed for a 3rd day & gold also rose. The Stoxx Europe 600 Index dropped slightly as the € & ¥ gained. The $ declined amid dovish coments from Fed Governor Lael Brainard. Buyers of 4-week Treasury bills demanded the highest yields since 2008 in today's auction as the deadline to raise the US debt ceiling neared. Big economic news still awaits. Mario Draghi may give more clarity on paring the ECB's bond-buying program when he speaks after a rates decision on Thurs. US durable-goods figures, the trade balance, unemployment claims & the release of the Fed's Beige Book will add to the global data mix after a purchasing managers' index indicated the euro area is poised for the fastest economic expansion in a decade.
Dow Drops, Treasuries Gain as Korea Tensions Mount: Markets Wrap
Federal Reserve interest-rate increases may be “doing real harm” to the US economy, which would help explain why inflation is low and job growth has slowed, said Minneapolis Fed Pres Neel Kashkari, one of the central bank's most dovish policy makers. “It’s very possible that our rate hikes over the past 18 months are leading to slower job growth, leaving more people on the sidelines, leading to lower wage growth, and leading to lower inflation and inflation expectations,” Kashkari said. “These premature rate hikes that we are embarking on, they’re not free, and I think we need to remind ourselves of that.” He has been an outspoken critic of the Fed's drive to tighten monetary policy since he took over at the Minneapolis Fed in 2016. This year, as a first-time voter on the FOMC, he dissented against otherwise-unanimous decisions in Mar & Jun to raise rates. A record of the FOMC's last meeting in Jul showed policy makers puzzled over a recent deceleration in US consumer price inflation despite continued declines in the unemployment rate, which Kashkari said “may be less perplexing than we think.” “We at the Fed might be making one of two fundamental mistakes: Number one, we might be overestimating how tight the labor market is,” Kashkari added. “And number two, we at the Fed may have allowed inflation expectations to drift lower. Both of those, if those really happened, could explain the low wage growth, the low inflation, and the seemingly tight labor market.” Officials are expected to leave rates on hold at their meeting later this month to concentrate on announcing the timing of a gradual process to begin shrinking their $4.5T balance sheet. They projected another hike this year in quarterly forecasts published in Jun that will be updated for the Sep 19-20 gathering. Investors see a roughly one-in-three chance that they'll follow thru with that projection.
Kashkari Says Fed May Have Harmed U.S. Economy With Rate Hikes
China criticized Pres Trump's threat to cut off US.S. trade with countries that deal with North Korea & rejected pressure to do more to halt the North's nuclear development. Trump issued the threat after North Korea on Sun exploded a thermonuclear device, its 6th & most powerful nuclear test. The threat was seen as a warning to China, North Korea's main trading partner & only major ally. A foreign ministry spokesman, Geng Shuang, criticized Trump's stance as unfair to Beijing. "What is definitely unacceptable to us is that on the one hand we work so hard to peacefully resolve this issue and on the other hand our interests are subject to sanctions and jeopardized," Geng said. "This is unfair." Such an approach would be drastic if applied to China, from which the US imports goods worth about $40B a month. Trump said it was under consideration "in addition to other options." Asked whether Beijing' would support tougher UN sanctions such as cutting off oil supplies to North Korea, Geng didn't mention oil but said whatever happened would depend on discussions among council members. Geng said China, one of 5 permanent Security Council members with power to veto UN actions, would take part in a "responsible and constructive way." Geng expressed frustration at Australian Prime Minister Malcolm Turnbull's comment that Beijing had a responsibility to influence North Korea due to its status as the North's main trading partner. "We keep stressing that we cannot solely rely on China to resolve this issue," said Geng. "We need all parties to work in the same direction."
China says Trump's trade threat over N. Korea 'unacceptable'
Estimates of the size of a Hurricane Harvey aid package for Texas &nd Louisiana rose last week, with one proposal being drafted for $150B, while the White House promised to make a request for funding soon to Congress. The Trump administration will make a request to Congress shortly for funds to help recovery efforts from Harvey, which caused devastating flooding, White House homeland security adviser Tom Bossert said. He told reporters that an aid funding request will likely come in stages as more is known about the storm's impact. Trump has prepared a request to Congress for an initial $5.9B in aid. Taxpayers are likely to face a bill for Harvey near the $110B for 2005's Hurricane Katrina. Estimates on the amount of the Harvey aid varied widely. Texas Governor Greg Abbott said last week the state could need more than $125B. Figures of $50-80B were cited by others. The Federal Emergency Management Agency's disaster relief fund had only $3.3B when the storm struck. A Rep leadership source said Congress was expected to consider & vote on an initial allocation of Harvey aid in the first ½ of Sep.
White House vows quick action as Harvey aid estimates soar
Puerto Rico's governor has activated the entire National Guard in the commonwealth ahead of powerful Hurricane Irma, which has strengthened into a Category 5 storm. “We’ve activated the whole National Guard. I did so a couple of days ago, making sure that we have all the prep going,” Puerto Rico Governor Ricardo Rossello said. As a US commonwealth, Puerto Rico is able to activate the National Guard & the governor said the storm's estimated strength caused him to declare a state of emergency yesterday. “We are talking about a 180 miles an hour hurricane with gust at the center going upwards of 200 miles per hour. Right now it’s scheduled to pass somewhere about 40 miles northeast of Puerto Rico, but still the winds would be very damaging and ravaging to Puerto Rico,” Rossello added. Gov. Rossello said the Trump administration has been very supportive in its efforts to activate certain provisions for Puerto Rico. “I actually solicited to the president a pre-landfall emergency declaration so that we can get things moving and have the right resources for the storm,” he said. According to the National Hurricane Center, Hurricane Irma is a “potentially catastrophic” storm with 185 mph winds & gusts up to 220 mph as of today.
Hurricane Irma: Puerto Rico activates National Guard ahead of Category 5 storm
Sep is starting with more than its share of problems. And stocks are being sold. The new storm heading for Puerto Rico & Florida are adding to headaches for traders. This month is statistically the worst one for stocks & that could be repeated this year. Dow has been flattish for more than a month (shown below). Making matters worse, stocks have not had a major selloff years. Hope for the best.
Dow Jones Industrials
No comments:
Post a Comment