Dow inched up 1 after recent strength, advancers over decliners 4-3 & NAZ fell 44. The MLP index went up 1+ to 285 & the REIT index increased 2+ to 360 (closing in on last year's record highs). Junk bond funds were little changed & Treasuries rose in price. Oil climbed higher in the 65s & gold added all of 1 to 1185.
AMJ (Alerian MLP Index tracking fund)
An initial look at consumer sentiment for the month of Aug came in below expectations. The Univ of Michigan's consumer sent index hit 95.3 for this month, the lowest level since Sep, according to a preliminary reading. The forecast was for the index to hit 98 in Aug, up from 97.1 in Jul. Richard Curtin, chief economist of the Surveys of Consumers said the weakness "reflected much less favorable assessments of buying conditions, mainly due to less favorable perceptions of market prices." Curtin noted, for example, that consumers viewed buying conditions for vehicles less favorably than at any time in the past 4 years, "vehicle prices being judged less favorably than anytime since the close of 1984." "Overall, the data indicate that consumers have little tolerance for overshooting inflation targets, and to the benefit of the Fed, interest rates now play a more decisive role in purchase decisions," he added. "As is usual at this stage in the business cycle, some price resistance has been neutralized by rising wages, although the falloff in favorable price perceptions has been much larger than ever before recorded." The Federal Reserve has already raised rates twice this year & is expected to hike 2 more times before year-end. Market expectations for rate hikes in Sep & Dec are at 93.6% & 61.3%, respectively.
Consumer sentiment hits its lowest level since September
China's economy is far from “collapsing” or looking "terrible," as asserted by White House economic advisor Larry Kudlow. "I'm not a China expert, although I'm boning up as fast as I can, I would just say right now their economy looks terrible," Kudlow said in response to Pres Trumps's question at a Cabinet meeting about China's prospects. Kudlow also said the latest data showed that "retail sales, business investment is collapsing." "There may be some manipulation" in the currency and "investors are moving out of China because they don't like the economy," he added. Growth is slowing & the latest economic reports did disappoint expectations. Worries about high debt levels persist. The Chinese yuan has fallen to its lowest level in more than a year against the $. However, China's situation is not as dire as Kudlow's comments suggest. First, fixed asset investment did slow to 5.5% year-on-year growth in Jul, the lowest since 1999. Retail sales growth of 8.8% in Jul from a year earlier missed expectations of 9.1% & fell from 9% in Jun. But that is still better than the 6.4% year-on-year increase in US retail sales reported for Jul. Beijing is trying to transition China's economy to a consumption-driven one from one reliant on manufacturing. China's GDP is expected to grow 6.6% this year, slower than last year's 6.9% rate but still one of the fastest-growing economies in the world & far above the 3.9% global growth forecast, according to a July report from the IMF. That compares with the IMF's outlook for a 2.9% increase in US GDP this year, up from 2.3% last year. 2nd, the Chinese yuan has fallen more than 5.5% in 2018 against the $ but is down less than 1% versus the € over that period. Part of the weakness in the yuan is due to a slowing economy & easing domestic monetary policy. But at the same time, the $ index has strengthened to its highest in more than a year amid Federal Reserve tightening.
White House's Kudlow says China looks 'terrible.' Data show otherwise.
club.ino.com/trend/analysis/stock/DE?a_aid=CD3289&a_bid=6ae5b6f7
Deere 3Q results suffer from higher raw material, freight costs
This should be a quiet Fri for stocks if there is no outside stimulus. The markets are going into a vacation like period during the 2 weeks prior to Labor Day. Of course developments on the trade front can bring major swings, but they will probably have to wait until after the holiday. Overbought tech shares are vulnerable to more selling, especially if Tesla (TSLA), down 27 today, runs into more headwinds.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 66.15 | +0.69 | +1.1% |
| GC=F | Gold | 1,185.60 | +1.60 | +0.1% |
An initial look at consumer sentiment for the month of Aug came in below expectations. The Univ of Michigan's consumer sent index hit 95.3 for this month, the lowest level since Sep, according to a preliminary reading. The forecast was for the index to hit 98 in Aug, up from 97.1 in Jul. Richard Curtin, chief economist of the Surveys of Consumers said the weakness "reflected much less favorable assessments of buying conditions, mainly due to less favorable perceptions of market prices." Curtin noted, for example, that consumers viewed buying conditions for vehicles less favorably than at any time in the past 4 years, "vehicle prices being judged less favorably than anytime since the close of 1984." "Overall, the data indicate that consumers have little tolerance for overshooting inflation targets, and to the benefit of the Fed, interest rates now play a more decisive role in purchase decisions," he added. "As is usual at this stage in the business cycle, some price resistance has been neutralized by rising wages, although the falloff in favorable price perceptions has been much larger than ever before recorded." The Federal Reserve has already raised rates twice this year & is expected to hike 2 more times before year-end. Market expectations for rate hikes in Sep & Dec are at 93.6% & 61.3%, respectively.
Consumer sentiment hits its lowest level since September
China's economy is far from “collapsing” or looking "terrible," as asserted by White House economic advisor Larry Kudlow. "I'm not a China expert, although I'm boning up as fast as I can, I would just say right now their economy looks terrible," Kudlow said in response to Pres Trumps's question at a Cabinet meeting about China's prospects. Kudlow also said the latest data showed that "retail sales, business investment is collapsing." "There may be some manipulation" in the currency and "investors are moving out of China because they don't like the economy," he added. Growth is slowing & the latest economic reports did disappoint expectations. Worries about high debt levels persist. The Chinese yuan has fallen to its lowest level in more than a year against the $. However, China's situation is not as dire as Kudlow's comments suggest. First, fixed asset investment did slow to 5.5% year-on-year growth in Jul, the lowest since 1999. Retail sales growth of 8.8% in Jul from a year earlier missed expectations of 9.1% & fell from 9% in Jun. But that is still better than the 6.4% year-on-year increase in US retail sales reported for Jul. Beijing is trying to transition China's economy to a consumption-driven one from one reliant on manufacturing. China's GDP is expected to grow 6.6% this year, slower than last year's 6.9% rate but still one of the fastest-growing economies in the world & far above the 3.9% global growth forecast, according to a July report from the IMF. That compares with the IMF's outlook for a 2.9% increase in US GDP this year, up from 2.3% last year. 2nd, the Chinese yuan has fallen more than 5.5% in 2018 against the $ but is down less than 1% versus the € over that period. Part of the weakness in the yuan is due to a slowing economy & easing domestic monetary policy. But at the same time, the $ index has strengthened to its highest in more than a year amid Federal Reserve tightening.
White House's Kudlow says China looks 'terrible.' Data show otherwise.
Farm equipment maker Deere (DE)
reported fiscal Q3 profit of $910M, higher than the
year-earlier level but less than analysts expected. The company had EPS of $2.78 & EPS,
adjusted for pretax gains, was $2.59. The estimate was for EPS
of $2.77. DE posted revenue of
$10.31B & its adjusted revenue was $9.29 billion,
beating forecasts. Analysts expected $9.17B. "We have continued to face cost pressures for raw materials and freight,
which are being addressed through a combination of cost management and
pricing actions," the company said. The stock rose 1.17
If you would like to learn moire about DE, click on this link:club.ino.com/trend/analysis/stock/DE?a_aid=CD3289&a_bid=6ae5b6f7
Deere 3Q results suffer from higher raw material, freight costs
This should be a quiet Fri for stocks if there is no outside stimulus. The markets are going into a vacation like period during the 2 weeks prior to Labor Day. Of course developments on the trade front can bring major swings, but they will probably have to wait until after the holiday. Overbought tech shares are vulnerable to more selling, especially if Tesla (TSLA), down 27 today, runs into more headwinds.
Dow Jones Industrials
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