Dow lost 12 (but well off AM lows), decliners over advancers about 2-1 & NAZ was off 18. The MLP index gained 2+ to the 281s & the REIT index added 1 to 363. Junk bond funds fluctuated & Treasuries remained weak. Oil slid back in the 69s after tropical storm Gordon is projected to cause limited damage to production (more below) & gold was off 8 to 1198.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
US manufacturing at highest level in more than 14 years
Amazon (AMZN) appears to be having an amazing year. The company hit $1T in market value today briefly after shares crossed the $2050 level one week after reaching $2K per share for the first time in history. Already this year, shares have advanced 72% & are sitting at a fresh all-time high. The online retailer got a push after analysts, last week, dramatically hiked their price target on AMZN, expecting shares will be valued at $2500 in 12 months. If the price forecast becomes reality, assuming that shares outstanding remain constant, then AMZN will have a $1.2T market cap. Apple (AAPL) which became the first US publicly traded company to reach the $1T mark in Aug, now has a market cap slightly above $1T & is the 2nd-best performing Dow component this year with a gain of 34%.
Most major auto makers reported increases in US sales in Aug, though analysts expect vehicle demand to cool for the remainder of 2018 amid higher interest rates & rising vehicle prices. Overall US auto sales were expected to rise slightly in Aug as customers took advantage of Labor Day discounts against a backdrop of a healthy US economy. Consumers continued to flock to sport-utility vehicles & pickup trucks, helping push the average selling price to $31.8K in Aug, market research firm JD Power said. The industry is expected to show a 1% increase in sales for Aug when full results are tallied. The year-over-year comparison will benefit from weak sales in Aug 2017, when Hurricane Harvey forced the closure of hundreds of dealerships in southeast Texas, denting the national total. Sales are expected to cool in coming months with such factors as rising interest rates, higher vehicle prices & the threat of tariffs on automotive imports prompting customers to consider buying a used car or delay a vehicle purchase altogether.
Oil settled slightly higher, with a storm in the Gulf of Mexico not expected to cause major disruptions to energy production in the region. The US Bureau of Safety & Environmental Enforcement reported that 54 production platforms, which represent nearly 7.9% of all manned platforms in the Gulf of Mexico, have been evacuated because of the storm. About 9.2% of oil production & nearly 9.1% of natural-gas production in the Gulf has been shut in. Oct West Texas Intermediate oil rose 7¢ to settle at $69.87 a barrel after touching an intraday high of $71.40.
Stocks rebounded from early losses, but market breadth worsened in late day trading. Having 2 stocks with more than $1T valuations is exciting, but not good enough to affect the rest of the stock market. Trade issues are getting more attention & they are stuck in the mud. Canada & China still need a lot of work.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The latest reading on America's manufacturing
activity has provided yet another piece of evidence that the US
economy is firing on all cylinders. In Aug, economic activity in the US manufacturing sector hit its highest level since 2004,
according to the Institute of Supply Management (ISM). The Aug manufacturing index was 61.3, above the 57.7 expected also above the Jul 58.1 reading. According to ISM, sales of factory-made products, output & employment all increased in Aug, while inflation slowed. Recent
tax cuts & strong consumer sentiment are positives for the US
economy, but manufacturers have expressed concerns about cost pressures
due rising employee wages & supply chain inefficiencies. Additionally,
survey participants voiced anxieties about how reciprocal tariffs will
impact company revenue & current manufacturing locations. Of the 18 manufacturing industries, 16 reported growth in Aug.
US manufacturing at highest level in more than 14 years
Productivity needs to ramp up or the US economy will end its winning streak, St Louis Federal Reserve Pres James Bullard said. “The
projections are that the economy is going to slow,” he said. US productivity grew at an annual
rate of 2.9% in Q2, the fastest pace in more than 3 years. However, Bullard said faster growth would come on better
productivity. “Because the potential growth
rate is thought to be only about 2 percent in the U.S. economy – 1
percent productivity growth and 1 percent labor force growth,” he said.
“And the demographics we are probably not going to be able to fix
anytime soon.” Although
the red-hot tech sector is powering the US economy right now, he
said, it's one area that could see improvement in productivity. “There’s
a good angle on that story because, yeah, you could see productivity
improvement given all the fantastic technology that’s around,” Bullard added. “But that technology has to diffuse into actual production
processes and make things more productive – I’m not sure that’s always
happening,” he explained. When asked about Pres
Trump's disapproval of the Fed's interest rate hike policy, Bullard said
the criticisms don't question the central bank's independence. “Monetary
policy in the U.S. is a global 24-hour a day debate that’s going on,”
he added. “All kinds of politicians are weighing in, including
politicians, senators … members of Congress can all weigh in during
hearings, so if the president weighs in, in some ways, it’s just one
more voice.” “He does have influence over the
Fed because he has the appointments process,” Bullard said. “I think to
the extent he’s going to have influence on the conversations, it’s
going to be through those appointments more than through the tweets,” he
explained.
US economy to slow: Fed's James Bullard
Amazon (AMZN) appears to be having an amazing year. The company hit $1T in market value today briefly after shares crossed the $2050 level one week after reaching $2K per share for the first time in history. Already this year, shares have advanced 72% & are sitting at a fresh all-time high. The online retailer got a push after analysts, last week, dramatically hiked their price target on AMZN, expecting shares will be valued at $2500 in 12 months. If the price forecast becomes reality, assuming that shares outstanding remain constant, then AMZN will have a $1.2T market cap. Apple (AAPL) which became the first US publicly traded company to reach the $1T mark in Aug, now has a market cap slightly above $1T & is the 2nd-best performing Dow component this year with a gain of 34%.
Amazon joins Apple as only two publicly traded US companies with $1T market cap
Most major auto makers reported increases in US sales in Aug, though analysts expect vehicle demand to cool for the remainder of 2018 amid higher interest rates & rising vehicle prices. Overall US auto sales were expected to rise slightly in Aug as customers took advantage of Labor Day discounts against a backdrop of a healthy US economy. Consumers continued to flock to sport-utility vehicles & pickup trucks, helping push the average selling price to $31.8K in Aug, market research firm JD Power said. The industry is expected to show a 1% increase in sales for Aug when full results are tallied. The year-over-year comparison will benefit from weak sales in Aug 2017, when Hurricane Harvey forced the closure of hundreds of dealerships in southeast Texas, denting the national total. Sales are expected to cool in coming months with such factors as rising interest rates, higher vehicle prices & the threat of tariffs on automotive imports prompting customers to consider buying a used car or delay a vehicle purchase altogether.
U.S. auto sales maintain momentum for now
Oil settled slightly higher, with a storm in the Gulf of Mexico not expected to cause major disruptions to energy production in the region. The US Bureau of Safety & Environmental Enforcement reported that 54 production platforms, which represent nearly 7.9% of all manned platforms in the Gulf of Mexico, have been evacuated because of the storm. About 9.2% of oil production & nearly 9.1% of natural-gas production in the Gulf has been shut in. Oct West Texas Intermediate oil rose 7¢ to settle at $69.87 a barrel after touching an intraday high of $71.40.
Oil settles a few cents higher as Gulf storm energy output disruptions look modest
Stocks rebounded from early losses, but market breadth worsened in late day trading. Having 2 stocks with more than $1T valuations is exciting, but not good enough to affect the rest of the stock market. Trade issues are getting more attention & they are stuck in the mud. Canada & China still need a lot of work.
Dow Jones Industrials
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