Dow was off 35, decliners over advancers about 5-4 & NAZ fell 6. The MLP index fell 1+ to the 239x & the REIT index went up 1+ to the 408s. Junk bond funds were flat & Treasuries climbed higher in price. Oil inched up pennies in the 58s & gold soared 15 to 1530.
US stocks lower on weak European manufacturing
Fed’s Williams: ‘We were prepared’ for the overnight funding jolt last week
US manufacturing sector activity hits 5-month high in September, IHS Markit says
Holiday spending expected to rise 5%, but don’t expect bigger crowds at the mall—here’s why
This week of trading began without much movement in stocks. Currently, the Dow is up 300 (1%) in Q3. The bulls are hoping the modest recovery in Sep will bring buyers out in Q4. Significant news on the trade front would be a big help. In the meantime. safe haven gold & Treasuries continue to be in demand, bringing higher prices for gold & lower yields on Treasuries.
Dow Jones Industrials
| CL=F | Crude Oil | 58.00 | -0.09 | -0.2% |
| GC=F | Gold | 1,528.40 | +13.30 | +0.9% |
Stocks opened slightly lower after manufacturing reports in Europe indicated growth was grinding to a halt. Concerns about those reports from Germany & France are again raising concerns about a recession. The market ended last week with losses, snapping a 3-week winning streak for the
S&P 500 after reports emerged that Chinese officials canceled a
planned trip to farms in Montana & Nebraska. The S&P 500 fell 0.5%, the Dow dropped 0.6% & NAZ lost 0.8%. In
Asian trading, the Shanghai Composite index closed
down 1.1% while Hong Kong's Hang Seng ended the day down 0.8% after yet another weekend of violent protests. Tokyo's markets
were closed for a holiday. In Europe, London's FTSE was off 0.2%, Germany's DAX was down 1% & France's CAC lost 0.7%.
US stocks lower on weak European manufacturing
NY Fed Pres John Williams said
that the central bank acted quickly during last week's jolt to overnight
lending markets & that the issue appears resolved for now. However,
he cautioned that short-term lending markets face another crisis,
though a few years in the distance, if banks don't prepare themselves
for when the London Interbank Offer Rate (LIBOR) is phased out. LIBOR
is used as an intl benchmark for overnight lending. Williams
also said that there's potential for further disruptions at the end of
the qtr & that the Fed is continuing to monitor the need
for more reserves in the system. Rates in the overnight repo market, where banks go to fund their day-to-day operations, surged Mon night amid a liquidity crunch,
pushing the Fed's own funds rate above the top end of its target range.
Fed officials responded with a series of operations that injected funds
into capital markets & on Fri announced that the program would
continue thru Oct 10. The Fed also announced a 25 basis point cut in the funds rate Wed along with a 30 basis point reduction in the interest on excess bank reserves. Today Williams, who oversees the
district's pivotal trading desk, said issues has been expected in the
repo market due to a confluence of factors that would sap liquidity,
including corp tax payments & settlement of Treasury auctions. However,
he conceded that the issues were worse than expected, culminating in
the Tues surge that saw repo rates hit 10% as “it became
clear that this situation had persisted and had the potential to become
more acute.” “This episode reminds us all of the importance of
having well-functioning markets and the vital role that the Federal
Reserve plays in supplying liquidity to the system when markets are
under stress,” he added. “We
were prepared for such an event, acted quickly and appropriately, and
our actions were successful. Friday’s announcement on open market
operations to address potential quarter-end funding pressures on
interest rates followed this same approach: quickly diagnose the
problem, develop the right action plan, and execute that plan,” Williams
said.
Fed’s Williams: ‘We were prepared’ for the overnight funding jolt last week
The US manufacturing sector recovered in Sep with activity growth hitting a 5-month high, according to IHS Markit. The
initial reading of US manufacturing Purchasing Managers' Index reached 51.0 in Sep, the highest figure since Apr & up from 50.3 in Aug. Readings above 50 show an expansion. Conditions can change between now & the final reading from Markit for Sep, which will be out Oct 1. Stronger
new order growth & rates of output largely helped boost the overall
sector this month. However, export order books
continue to weaken, with the new work from abroad dropping for the 4th time in the past 5 months. “Although
picking up slightly, the overall rate of growth in September remained
among the weakest since 2016,” Chris Williamson, chief business
economist at Markit, said. “Prospects also look gloomy,
with inflows of new business down to the lowest since 2009 and firms’
expectations of growth over the coming year stuck at one of the most
subdued levels since 2012.” A gauge from the Institute for Supply Management showed the sector contracted in Aug, its first decline since 2016. The Aug contraction ended a 35-month expansion period, according to ISM. The
escalated trade war between the US & China has taken a big bite
from the manufacturing sector, which once was considered one of the
biggest winners under the Trump administration, scoring big growth in
employment & activity. “Key to the recent deterioration has
been a further spill-over of the trade-led slowdown in manufacturing to
the service sector,” Williamson said. “A ray of light comes from
manufacturing reporting some easing of headwinds, though factory
conditions likewise remained among the toughest since 2009 to underscore
the broad-based nature of the current lassitude.”
US manufacturing sector activity hits 5-month high in September, IHS Markit says
The Dec holiday shopping rush is just around the corner. Around
50% of consumers have already started looking for items on their
friends' & family's wish lists, according to a new online survey from
The Harris Poll & OpenX, an ad exchange network, that polled 2K
shoppers in Aug. The
holidays are a critical time for many brands: Sales during this time of
year can make up 30% of a retailer’s annual revenue. Heading into the
gift-giving season, shoppers are expected to spend 5% more this year
than they did last year, according to the survey. “What we found
should be encouraging to retail marketers trying to drive action this
holiday season,” said Tim Cadogan, chairman & CEO
for OpenX. “Consumers are optimistic about the future of the economy and
their optimism will fuel increased spending.” However, while
consumers plan to spend more this year, they also plan to spend their
money differently than last year. Cadogan's team expects 53% of all
holiday shopping to be done digitally. In fact, around 20% of purchases are expected to happen on mobile devices, driven predominantly by millennial shoppers. With
more than ½ of holiday shoppers reporting that they spend more than 3 hours a day on their mobile devices, it's no wonder their shopping
habits are shifting. One-click ordering & mobile-friendly retail
sites & apps have made purchasing anything from dishes to swimsuits
incredibly easy. This growing shift could even impact how consumers purchase items on big shopping holidays like Black Friday & Cyber Monday. “On
Black Friday, traditionally a day for brick-and-mortar, the number of
consumers planning to shop online vs. in store is almost identical,” the
report said.
Holiday spending expected to rise 5%, but don’t expect bigger crowds at the mall—here’s why
This week of trading began without much movement in stocks. Currently, the Dow is up 300 (1%) in Q3. The bulls are hoping the modest recovery in Sep will bring buyers out in Q4. Significant news on the trade front would be a big help. In the meantime. safe haven gold & Treasuries continue to be in demand, bringing higher prices for gold & lower yields on Treasuries.
Dow Jones Industrials
No comments:
Post a Comment