Dow pulled back 63, decliners over advancers 4-3 & NAZ lost 26. The MLP index inched up to 241 & the REIT index was of 1+ to 406. Junk bond funds crawled higher & Treasuries rose in price. Oil slid back to the 58s & gold edged up 2 to 1515.
AMJ (Alerian MLP Index tracking fund)
The chief execs of the nation's biggest companies downgraded their outlook for the US economy amid uncertainty over the trade war & slowing global growth, according to a new survey. The Business Roundtable said its members now forecast growth this year will clock in at 2.3%, down from last qtr's estimate of 2.6%. In addition, its indices of hiring, capital investment & sales all declined. “This quarter’s survey shows American businesses now have their foot poised above the brake, and they’re tapping the brake periodically,” Business Roundtable Pres Joshua Bolten said. “Uncertainty is preventing the full potential of the economy from being unleashed, limiting growth and investment here in the U.S.” The Roundtable, whose chairman is JP Mogran (a Dow stock) CEO Jamie Dimon, blamed tension with China & the stalled free-trade agreement with Mexico & Canada for the downbeat assessment. This qtr's survey asked members to rate the impact of the trade war on their businesses over the past year. More than ½ of exes reported a somewhat or very negative impact on sales, while 40% of manufacturing CEOs said capital investment took a hit. The group found almost no company reported a positive impact. Corp execs have been among the most vocal advocates for a new North American trade agreement, while also urging the Trump administration to tamp down its rhetoric against China & hold off on tariffs. “The U.S. needs strong, sustained, long-term economic growth in order to remain globally competitive and expand opportunity for more Americans,” Dimon said. “Business Roundtable CEOs stand ready to work with policymakers to address our nation’s biggest challenges to create conditions for inclusive growth, investment and job creation here in America.” The broad index of the CEOs' outlook fell 10.3 points from the previous qtr to 79.2, below the historical average but still signaling economic growth. The indices for sales & capital investment over the next 6 months also dropped below their long-term averages: Sales declined 13.5 points to 91.6, while investment plunged 14.7 points to 73.4. The index for hiring saw the smallest drop, falling 2.6 points to 72.6. That reading remains well above the index's historical average.
US homebuilding surged to more than a 12-year high in Aug as both single-& multi-family housing construction increased, suggesting that lower mortgage rates were finally providing a boost to the struggling housing market. Housing starts jumped 12.3% to a seasonally adjusted annual rate of 1.364M units last month, the highest level since 2007, the Commerce Dept said. Data for Jul was revised to show homebuilding falling to a pace of 1.215M units, instead of decreasing at a rate of 1.191M units as previously reported. The forecast housing called for starts to advance to a pace of 1.250M units in Aug. Building permits increased 7.7% to a rate of 1.419M units in Aug, the highest level since 2007. Housing starts rose 6.6% on a year-on-year basis in Aug. The housing market, the most sensitive sector to interest rates, had until now shown few signs of benefiting from the Federal Reserve's monetary policy easing, which has pushed down mortgage rates from last year's multi-year highs. Economists & builders had blamed the lackluster performance on land & labor shortages. A survey yesterday showed confidence among homebuilders edged up in Sep, with builders reporting solid demand for homes. Builders, however, said they “continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labor.” They also noted that a year-long trade war between the US & China, which has undercut manufacturing, was “holding back home construction in some parts of the nation.” The 30-year fixed mortgage rate has dropped more than 130 basis points to an average of 3.56%, according to Freddie Mac. Further declines are likely with the Fed expected to cut interest rates again later today, to blunt the hit on the economy from the US-China trade tensions. The central bank lowered borrowing costs in Jul for the first time since 2008. Residential investment has contracted for 6 straight qtrs, the longest such stretch since the great recession.
US housing starts race to 12-year high in August
The Saudis are saying drone & missile debris show Iran's role in the attack. Traders are more interested in what the Fed has to say about interest rates with a 25 basis point cut already baked into investors' thinking. They will "talk to us" in a few hours.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 58.31 | -1.03 | - 1.7% |
| GC=F | Gold | 1,513.70 | +0.30 | +0.0% |
Pres Trump ramped up the pressure on Iran
after an attack on a key Saudi oil facility, telling the Treasury
Dept to "substantially increase" sanctions on Iran. Trump announced the directive on Twitter. "I
have just instructed the Secretary of the Treasury to substantially
increase Sanctions on the country of Iran!" he tweeted. The weekend attacks on the oil field, conducted via drone, caused oil prices to surge & raised tensions in the Middle East. The US has blamed Iran for the attack, while Saudi Arabia has said it was "almost certainly" backed by Iran. Iran told the US that it would respond "immediately" to "any action" against Iran, according to a state-run news agency. "If
any action takes place against Iran, the action will be faced by Iran's
answer immediately," Iran wrote in a note, according to its news
agency. Iran has denied responsibility for the attack, which knocked out around 5% of the world's oil supply. Saudi Arabia said today that its oil production would be back to normal levels by the end of Sep. "The damage has been contained," Energy Minister Prince Abdulaziz bin Salman said. The
US reimposed sanctions on Iran in Nov 2018 that had been lifted
under the Iran nuclear agreement, which Trump pulled the US out of in
May 2018. Trump imposed new sanctions on Iran in Jun 2019. Secretary of State Mike Pompeo said earlier this month that the Iran sanctions could cut its GDP by 12%.
TRUMP UPS ANTE WITH IRAN OVER SAUDI OIL ATTACK
The chief execs of the nation's biggest companies downgraded their outlook for the US economy amid uncertainty over the trade war & slowing global growth, according to a new survey. The Business Roundtable said its members now forecast growth this year will clock in at 2.3%, down from last qtr's estimate of 2.6%. In addition, its indices of hiring, capital investment & sales all declined. “This quarter’s survey shows American businesses now have their foot poised above the brake, and they’re tapping the brake periodically,” Business Roundtable Pres Joshua Bolten said. “Uncertainty is preventing the full potential of the economy from being unleashed, limiting growth and investment here in the U.S.” The Roundtable, whose chairman is JP Mogran (a Dow stock) CEO Jamie Dimon, blamed tension with China & the stalled free-trade agreement with Mexico & Canada for the downbeat assessment. This qtr's survey asked members to rate the impact of the trade war on their businesses over the past year. More than ½ of exes reported a somewhat or very negative impact on sales, while 40% of manufacturing CEOs said capital investment took a hit. The group found almost no company reported a positive impact. Corp execs have been among the most vocal advocates for a new North American trade agreement, while also urging the Trump administration to tamp down its rhetoric against China & hold off on tariffs. “The U.S. needs strong, sustained, long-term economic growth in order to remain globally competitive and expand opportunity for more Americans,” Dimon said. “Business Roundtable CEOs stand ready to work with policymakers to address our nation’s biggest challenges to create conditions for inclusive growth, investment and job creation here in America.” The broad index of the CEOs' outlook fell 10.3 points from the previous qtr to 79.2, below the historical average but still signaling economic growth. The indices for sales & capital investment over the next 6 months also dropped below their long-term averages: Sales declined 13.5 points to 91.6, while investment plunged 14.7 points to 73.4. The index for hiring saw the smallest drop, falling 2.6 points to 72.6. That reading remains well above the index's historical average.
America’s top CEOs just downgraded their economic forecast
US homebuilding surged to more than a 12-year high in Aug as both single-& multi-family housing construction increased, suggesting that lower mortgage rates were finally providing a boost to the struggling housing market. Housing starts jumped 12.3% to a seasonally adjusted annual rate of 1.364M units last month, the highest level since 2007, the Commerce Dept said. Data for Jul was revised to show homebuilding falling to a pace of 1.215M units, instead of decreasing at a rate of 1.191M units as previously reported. The forecast housing called for starts to advance to a pace of 1.250M units in Aug. Building permits increased 7.7% to a rate of 1.419M units in Aug, the highest level since 2007. Housing starts rose 6.6% on a year-on-year basis in Aug. The housing market, the most sensitive sector to interest rates, had until now shown few signs of benefiting from the Federal Reserve's monetary policy easing, which has pushed down mortgage rates from last year's multi-year highs. Economists & builders had blamed the lackluster performance on land & labor shortages. A survey yesterday showed confidence among homebuilders edged up in Sep, with builders reporting solid demand for homes. Builders, however, said they “continue to grapple with ongoing supply-side challenges that hinder housing affordability, including a shortage of lots and labor.” They also noted that a year-long trade war between the US & China, which has undercut manufacturing, was “holding back home construction in some parts of the nation.” The 30-year fixed mortgage rate has dropped more than 130 basis points to an average of 3.56%, according to Freddie Mac. Further declines are likely with the Fed expected to cut interest rates again later today, to blunt the hit on the economy from the US-China trade tensions. The central bank lowered borrowing costs in Jul for the first time since 2008. Residential investment has contracted for 6 straight qtrs, the longest such stretch since the great recession.
US housing starts race to 12-year high in August
The Saudis are saying drone & missile debris show Iran's role in the attack. Traders are more interested in what the Fed has to say about interest rates with a 25 basis point cut already baked into investors' thinking. They will "talk to us" in a few hours.
Dow Jones Industrials
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