Dow dropped 75, decliners ahead of advancers about 3-2 & NAZ lost 30. The MLP index went up 1+ to 281 & the REIT index rose 1+ to the 263s (near its record highs). Junk bond funds inched higher & Treasuries retreated, taking the yield on the 10 year Treasury up 5 basis points to 2.9%. Oil jumped up again, topping 70 on hurricane warnings (more below) & gold fell 10 to 1196 on the strong $.
AMJ (Alerian MLP Index tracking fund)
Stocks lower as traders cautious over trade
US construction spending barely rose in Jul as increases in homebuilding & investment in public projects were overshadowed by a sharp drop in private nonresidential outlays. The Commerce Dept said that construction spending edged up 0.1% & data for Jun was revised up to show construction outlays declining 0.8 percent instead of the previously reported 1.1% drop. The forecast for construction spending was an increase of 0.5% in Jul. Construction spending increased 5.8% on a year-on-year basis. Spending on private residential projects rebounded 0.6% in Jul following 2 straight months of declines. While homebuilding rose in July, the overall trend has slowed, with builders continuing to complain about rising material costs as well as persistent land & labor shortages. Residential investment contracted in H1. Spending on private nonresidential structures, which includes manufacturing and power plants, dropped 1.0% in Jul, was the biggest decline since Aug 2017 & followed a 0.1% gain in Jun. Overall, spending on private construction projects slipped 0.1% in Jul after decreasing 0.5% in Jun. Investment in public construction projects increased 0.7% after tumbling 1.7% in Jun. Spending on federal gov construction projects rebounded 2.5%. That followed a 3.0% drop in Jun. State & local gov construction outlays advanced 0.6% in Jul after falling 1.6% in the prior month.
US construction spending rises slightly in July
Oil prices rose sharply after the evacuation of 2 Gulf of Mexico oil platforms in preparation for a hurricane. US light crude rose $1.60 a barrel from the Fri close to a peak of $71.40, its highest since mid-Jul, before easing slightly to around $70.67. US markets were closed yesterday for Labor Day. Benchmark Brent crude, which traded yesterday, was up 79¢ at $78.94 a barrel. Anadarko Petroleum said yesterday it had evacuated & shut production at 2 oil platforms in the Gulf of Mexico ahead of the approach of Gordon, which is expected to come ashore as a hurricane. Global oil markets have tightened over the last month, pushing up Brent prices by more than 10% since the middle of Aug. Investors anticipate less supply from Iran as US sanctions on Tehran begin to bite.
Oil prices rise as Gulf of Mexico rigs evacuated
Ford (F) reported a nearly 4.1% rise in US auto sales in Aug, helped by higher demand for its sport utility vehicles & pickup trucks. The #2 U.S. automaker said it sold 218K vehicles in Aug, compared with 210K, a year earlier when Hurricanes Harvey & Irma depressed sales. Sales of Ford brand SUVs grew 20.1% to 79K vehicles & pickup truck sales rose 5.7%. Ford said earlier this year it would gradually cease production of most passenger cars in the US. US consumers have been shifting away from traditional passenger cars for larger, more comfortable SUVs & pickup trucks, which are also more profitable for automakers. Last year, US auto sales dropped 2% from a record high of 17.55M in 2016. Rival Toyota (TM) earlier reported a 2% decline in US auto sales, hurt by a slump in demand for its passenger cars, although it said SUV sales rose 8.9%. The #3 US automaker sold 223K vehicles in Aug, compared with 227K a year earlier. A forecast was for a seasonally adjusted annual rate of 16.8M vehicles for the US auto industry in Aug.
US SUV sales surge again in August
The stock market had a good month with averages now at or near record highs.. Some traders are returning after long holidays & they are getting serious on how to extend the Aug rally. Economic data & consumer optimism is strong but nagging thoughts about trade tensions are weighing down on market sentiment. Then there is the reputation Sep has for being the worst month of the year for stocks. A big test in the first week will be seeing how the market reacts to what should be favorable economic data for Aug.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 70.59 | +0.79 | +1.1% |
| GC=F | Gold | 1,198.20 | -8.50 | -0.7% |
Stocks fell, as traders returned to
work from the long weekend, turning their attention to NAFTA
negotiations & a busy economic data calendar. While
the trading week will be a day shorter, it is crammed full of potential
market driving events & economic data including the big event: the
monthly jobs report, which will be released on Fri. Today, automaker shares could see some movement, as data on total various vehicle sales is scheduled for release. Economic
data released Tues will include the Institute of Supply Management reading on Aug manufacturing activity, which came in at 61.3, above
the 57.7 that was expected. This is the highest reading for the
index since 2004. Jul construction spending missed forecasts,
rising by 0.1% versus forecasts for a 0.5% increase.
Stocks lower as traders cautious over trade
US construction spending barely rose in Jul as increases in homebuilding & investment in public projects were overshadowed by a sharp drop in private nonresidential outlays. The Commerce Dept said that construction spending edged up 0.1% & data for Jun was revised up to show construction outlays declining 0.8 percent instead of the previously reported 1.1% drop. The forecast for construction spending was an increase of 0.5% in Jul. Construction spending increased 5.8% on a year-on-year basis. Spending on private residential projects rebounded 0.6% in Jul following 2 straight months of declines. While homebuilding rose in July, the overall trend has slowed, with builders continuing to complain about rising material costs as well as persistent land & labor shortages. Residential investment contracted in H1. Spending on private nonresidential structures, which includes manufacturing and power plants, dropped 1.0% in Jul, was the biggest decline since Aug 2017 & followed a 0.1% gain in Jun. Overall, spending on private construction projects slipped 0.1% in Jul after decreasing 0.5% in Jun. Investment in public construction projects increased 0.7% after tumbling 1.7% in Jun. Spending on federal gov construction projects rebounded 2.5%. That followed a 3.0% drop in Jun. State & local gov construction outlays advanced 0.6% in Jul after falling 1.6% in the prior month.
US construction spending rises slightly in July
Oil prices rose sharply after the evacuation of 2 Gulf of Mexico oil platforms in preparation for a hurricane. US light crude rose $1.60 a barrel from the Fri close to a peak of $71.40, its highest since mid-Jul, before easing slightly to around $70.67. US markets were closed yesterday for Labor Day. Benchmark Brent crude, which traded yesterday, was up 79¢ at $78.94 a barrel. Anadarko Petroleum said yesterday it had evacuated & shut production at 2 oil platforms in the Gulf of Mexico ahead of the approach of Gordon, which is expected to come ashore as a hurricane. Global oil markets have tightened over the last month, pushing up Brent prices by more than 10% since the middle of Aug. Investors anticipate less supply from Iran as US sanctions on Tehran begin to bite.
Oil prices rise as Gulf of Mexico rigs evacuated
Ford (F) reported a nearly 4.1% rise in US auto sales in Aug, helped by higher demand for its sport utility vehicles & pickup trucks. The #2 U.S. automaker said it sold 218K vehicles in Aug, compared with 210K, a year earlier when Hurricanes Harvey & Irma depressed sales. Sales of Ford brand SUVs grew 20.1% to 79K vehicles & pickup truck sales rose 5.7%. Ford said earlier this year it would gradually cease production of most passenger cars in the US. US consumers have been shifting away from traditional passenger cars for larger, more comfortable SUVs & pickup trucks, which are also more profitable for automakers. Last year, US auto sales dropped 2% from a record high of 17.55M in 2016. Rival Toyota (TM) earlier reported a 2% decline in US auto sales, hurt by a slump in demand for its passenger cars, although it said SUV sales rose 8.9%. The #3 US automaker sold 223K vehicles in Aug, compared with 227K a year earlier. A forecast was for a seasonally adjusted annual rate of 16.8M vehicles for the US auto industry in Aug.
US SUV sales surge again in August
The stock market had a good month with averages now at or near record highs.. Some traders are returning after long holidays & they are getting serious on how to extend the Aug rally. Economic data & consumer optimism is strong but nagging thoughts about trade tensions are weighing down on market sentiment. Then there is the reputation Sep has for being the worst month of the year for stocks. A big test in the first week will be seeing how the market reacts to what should be favorable economic data for Aug.
Dow Jones Industrials
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