Dow rose 32, decliners barely ahead of advancers & NAZ dropped another 55. The MLP index was fractionally lower in the 282s & the REIT index gained 2+ to the 361s, approaching its record highs. Junk bond funds were purchased & Treasuries crawled higher in price. Oil inched higher in the 68s & gold was up 8 to 1209.
AMJ (Alerian MLP Index tracking fund)
Stocks opened flat as traders contrasted trade concerns & another batch of positive economic data. Data today included a reading on private sector employment, weekly jobless claims & Q2 productivity. According to private payrolls processor ADP, 163K jobs were added in Aug versus the forecast for 190K. Weekly initial jobless claims fell 10K to 203K & Q2 productivity was unchanged at 2.9%.. The Institute of Supply Management's services index climbed to 58.5% in Aug from 55.7% in Jul. Meanwhile, market jitters surround the fact that the trade dispute between the US & China could escalate today as additional duties are scheduled to be placed on Chinese goods. The latest round were initially proposed at 10%, but Pres Trump directed Trade Representative Robert Lighthizer to consider raising them to 25% in response to Chinese retaliation. China's commerce ministry said that China will be forced to retaliate if the US implements new tariff measures. US-Canada NAFTA talks resumed yesterday after the Trump administration threatened to withdraw itself from the 24-year-old trade deal, notifying Congress last Fri of its intention to enter into a trade deal with Mexico. Stocks were mixed yesterday, with the NAZ under pressure as Facebook (FB) COO Sheryl Sandberg & Twitter (TWTR) CEO Jack Dorsey answered questions from the Senate Intelligence Committee about their companies’ responses to how foreign govs use social media to spread political propaganda. House Speaker Paul Ryan confirmed yesterday that the House plans to bring Tax Cuts 2.0 (which will include making last year's individual tax cuts permanent) to the floor this month.
Stocks flat as traders digest economic data, eye trade developments
Pres Trump said the “intense” negotiations over a new North American Free Trade Agreement (NAFTA) should result in Canada treating the US fairly on trade. “[Canada] and other countries have been taking advantage of the United States for many years and this is the president that has stopped it,” Trump told reporters. The pres said Canada's tariffs on US dairy imports have been excessive over the years & Canada has created “walls” against US businesses. “They charge tariffs of 300 percent on dairy products which a lot of people never understood,” Trump said. Trump called NAFTA a “stupid deal” for the US causing Ms of American jobs to leave the country. “NAFTA goes down as one of the worst trade deals in the history of our country,” he added. “It emptied out millions of jobs. It emptied out factories and plants all over the United States.” US-Canada NAFTA talks resumed yesterday after the Trump administration threatened to withdraw itself from the 24-year-old trade deal, notifying Congress on Fri of its intention to enter into a trade deal with Mexico. “The deal is a much more fair deal between the United States and Mexico,” Trump said. Trump touted the strength of the US economy, saying new US trade deals could help economic growth exceed a Q2 GDP growth rate of 4.2%. “When the trade deals are fixed and made fair, GDP will go even higher and potentially much higher than that,” he said.
Service sector boomed in August, while factory orders fell more than expected in July
Economic data is coming in strong, as expected but the tech sector is weak as Congress raises questions about technology business. This has to be expected after the rally in tech shares. Trade worries continue. Talks with Canada need much more work & the outlook for China trade talks look gloomy. However, popular stock averages remain close to record highs, an encouraging sign in what may be a difficult month for stocks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 68.71 | -0.01 | -0.00% |
| GC=F | Gold | 1,211.80 | +10.50 | +0.9% |
Stocks opened flat as traders contrasted trade concerns & another batch of positive economic data. Data today included a reading on private sector employment, weekly jobless claims & Q2 productivity. According to private payrolls processor ADP, 163K jobs were added in Aug versus the forecast for 190K. Weekly initial jobless claims fell 10K to 203K & Q2 productivity was unchanged at 2.9%.. The Institute of Supply Management's services index climbed to 58.5% in Aug from 55.7% in Jul. Meanwhile, market jitters surround the fact that the trade dispute between the US & China could escalate today as additional duties are scheduled to be placed on Chinese goods. The latest round were initially proposed at 10%, but Pres Trump directed Trade Representative Robert Lighthizer to consider raising them to 25% in response to Chinese retaliation. China's commerce ministry said that China will be forced to retaliate if the US implements new tariff measures. US-Canada NAFTA talks resumed yesterday after the Trump administration threatened to withdraw itself from the 24-year-old trade deal, notifying Congress last Fri of its intention to enter into a trade deal with Mexico. Stocks were mixed yesterday, with the NAZ under pressure as Facebook (FB) COO Sheryl Sandberg & Twitter (TWTR) CEO Jack Dorsey answered questions from the Senate Intelligence Committee about their companies’ responses to how foreign govs use social media to spread political propaganda. House Speaker Paul Ryan confirmed yesterday that the House plans to bring Tax Cuts 2.0 (which will include making last year's individual tax cuts permanent) to the floor this month.
Stocks flat as traders digest economic data, eye trade developments
Payroll processing firm ADP said 163K
were added to private sector payrolls in Aug. The estimate was for
190K. Jul payrolls were revised lower by 2K to 217K. "Although
we saw a small slowdown in job growth, the market remains incredibly
dynamic," said Ahu Yildirmaz, VP & co-head of the ADP
Research Institute. "Midsized businesses continue to be the engine of
growth, adding nearly 70 percent of all jobs this month, and remain
resiliant in the current economic climate." The
report, which is derived from ADP's actual payroll data, measures the
change in total nonfarm private employment each month on a
seasonally-adjusted basis. Weekly jobless
claims fell by 10K to 203K last week, lower than the
214K estimate. The reports comes ahead of tomorrow's big monthly jobs report from the gov. The
US economy likely added 191K new nonfarm jobs last month according
to the latest survey. That would be 34K more
than the 157K jobs created in Jul, but below the average monthly
increase of 203K over the previous 12 months. The unemployment rate is expected to tick lower to 3.8%, from 3.9%.
Job growth slows, market remains 'incredibly dynamic': ADP
Pres Trump said the “intense” negotiations over a new North American Free Trade Agreement (NAFTA) should result in Canada treating the US fairly on trade. “[Canada] and other countries have been taking advantage of the United States for many years and this is the president that has stopped it,” Trump told reporters. The pres said Canada's tariffs on US dairy imports have been excessive over the years & Canada has created “walls” against US businesses. “They charge tariffs of 300 percent on dairy products which a lot of people never understood,” Trump said. Trump called NAFTA a “stupid deal” for the US causing Ms of American jobs to leave the country. “NAFTA goes down as one of the worst trade deals in the history of our country,” he added. “It emptied out millions of jobs. It emptied out factories and plants all over the United States.” US-Canada NAFTA talks resumed yesterday after the Trump administration threatened to withdraw itself from the 24-year-old trade deal, notifying Congress on Fri of its intention to enter into a trade deal with Mexico. “The deal is a much more fair deal between the United States and Mexico,” Trump said. Trump touted the strength of the US economy, saying new US trade deals could help economic growth exceed a Q2 GDP growth rate of 4.2%. “When the trade deals are fixed and made fair, GDP will go even higher and potentially much higher than that,” he said.
Trump bangs drum for fair trade deal with Canada
The Labor Dept affirmed last
month's report that US productivity increased at an annual rate of 2.9% in Q2. The gov reported few revisions
to the productivity figures released in Aug. The jump in productivity
followed a tepid 0.3% gain in Q1. Labor costs
slipped 1% in the Apr-Jun qtr, instead of the 0.9%
that was initially reported. Productivity is a measure
of output for each hour worked. It largely determines how fast the
economy can grow & how much living standards can increase. Because
productivity has been weak throughout this 9-year expansion, overall
economic growth has been relatively sluggish. Many economists view the
strong Q2 growth as a blip rather than a lasting
acceleration. Separately, the Labor Dept
said that 203K people applied for jobless benefits last
week, the lowest level since 1969.
US productivity grew at strong 2.9% rate in the second quarter
The service sector boomed in Aug, while factory
orders sank more than expected a month earlier. The Institute of Supply Management
measure of the non-manufacturing sector for Aug came in at 58.5,
blowing away expectations for a reading of 56.8 by a survey & following the 55.7 reading reported in the prior
month. A reading above 50 indicates expansion in the service sector, while a reading below 50 signals contraction. "Logistics, tariffs and
employment resources continue to have an impact on many of the
respective industries," the institute said in a statement. "Overall, the
respondents remain positive about business conditions and the economy." A separate report from
the Commerce Dept showed factory orders for Jul falling 0.8% , greater than the 0.6% decline expected & following an increase of 0.7% a
month earlier.
Service sector boomed in August, while factory orders fell more than expected in July
Economic data is coming in strong, as expected but the tech sector is weak as Congress raises questions about technology business. This has to be expected after the rally in tech shares. Trade worries continue. Talks with Canada need much more work & the outlook for China trade talks look gloomy. However, popular stock averages remain close to record highs, an encouraging sign in what may be a difficult month for stocks.
Dow Jones Industrials
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