Dow finished up 122 (session high). advancers over decliners about 3-2 & NAZ added 87. The MLP index bounced back 1 to the 229s & the REIT index rose 3+ to the 406s. Junk bond funds slid lower & Treasuries continued to be in strong demand, bringing lower yields. Oil was lower in the 52s & gold went up 4 to 1512 (but off session highs). More on both below.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Chances of a rate cut by the Federal Reserve later this month rose after disappointing services reading fueled fears that the economic slowdown would tip the US into a recession. Traders are now pricing in a 92.5% chance of a qtr-point rate cut at the Fed's Oct meeting & a 50% chance of another cut in Dec. This is based on futures pricing from live markets & reflects the views of traders placing real bets on the CME exchange. The services sector grew at a considerably slower pace than expected in Sep with the ISM Non-Manufacturing Index posting its the weakest reading since Aug 2016. The stock market sold off sharply on the data. The weak services sector data came as US business took a big hit from the in the US-China trade war. The manufacturing sector is also flashing red as ISM posted its weakest reading in more than 10 years earlier this week. The Fed cut its benchmark overnight lending rate to 1.75-2% in Sep, the 2nd time this year. The central bank cited uncertainties around trade & muted inflation as headwinds to the US economy.
Markets now see a 90% chance Fed will cut rates this month after weak services data
Gold prices settled higher, tallying a 3rd consecutive session gain, as a drop in the Sep US ISM services sector index fed worries about the health of the economy, boosting haven demand for the precious metal. Prices, however, pulled back from the session’s best level, as US benchmark stock indices erased losses that were fed by the downbeat economic data. Service-oriented companies that employ the vast majority of Americans saw their weakest growth in Sep in 3 years. The ISM services survey dropped to 52.6% in Sep from 56.4%. That fueled safe-haven demand for gold. The US nonfarm-payrolls report tomorrow will hold new significance given reports of weakness in manufacturing & a weaker-than-expected private-sector report from Automatic Data Processing yesterday. For the week thus far, gold trades slightly higher. Weaker-than-expected global economic data & developments on the intl trade front have supported some buying of assets considered havens, like gold, but overall strength in the $, also drawing some safety bids, has muted some of the advance for precious metals. Trade tensions also were giving lift to bullion. Yesterday, the US also announced $7.5B in tariffs on import duties from the EU.
Gold settles higher as downbeat U.S ISM services data back haven demand for the metal
Negotiators from the US & China are set to resume trade discussions next week in DC, & they could be forced to broach a touchy subject when the talks resume – the pro-democracy protests in Hong Kong. The protests, which have stretched into their 17th week, reached a new level of chaos on Tues, when an officer shot a demonstrator in the chest at close range, leaving him in critical condition. It was the first shooting to occur during the protests. “It probably will have some impact on the Chinese side, even despite whatever it has on ours, because this is a sign of domestic dissent within their community and Hong Kong is quite important for the international trading activities of China,” said Commerce Secretary Wilbur Ross when discussing the protests. Trade discussions are set to resume shortly after China's Golden Week holiday, which runs thru Oct 7, when Chinese Vice Premier Liu He is scheduled to travel to DC. There has been a recent de-escalation of the trade war, but a deal has remained elusive. Last month, the US said it was postponing raising the tariffs on Chinese goods to Oct 15 out of respect for China's holiday. Beijing responded by exempting US pork & soybeans from additional tariffs. On Sun, it was reported that China could crack down on companies listing on its exchange by tightening restrictions & slowing down on their approvals. It is unclear if such action would be a trade-war weapon or more to protect investors from the low liquidity of those shares. “The president has indicated he wants a complete deal,” Ross said.
Oil futures dropped, with the US benchmark suffering from an 8th straight daily decline & another finish at its lowest in 2 months, as worries over global demand persist. Data today showed that service-oriented companies that employ the vast majority of Americans registered the weakest growth in Sep in 3 years. The Institute for Supply Management’s said its non-manufacturing index fell to 52.6 last month from 56.4 in Aug. However, oil pared losses by the settlement, with US prices down modestly for the session & global benchmark crude settling a few cents higher. West Texas Intermediate crude for Nov delivery fell 19¢ (0.4%) to settle at $52.45 a barrel, the lowest finish in about 2 months. That marked an 8th consecutive decline for the front-month contract, the longest losing streak since the 12-session fall ended Nov 2018. Meanwhile, Dec Brent erased earlier losses to tack on 2 pennies at $57.71 a barrel, following 4 sessions of declines in a row.
This turned out to a a choppy day for stocks. Pessimism in the AM on service sector data gave way to optimism in the PM on hopes for another interest rate cut & maybe even a 2nd one later this year. However economic keeps coming in on the gloomy side & a Chinese trade deal is still touchy at best. Making matters worse is the General Motors (GM) strike dragging on. In the first 3 days of Oct, the Dow is down 700. Not encouraging for investors.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Chances of a rate cut by the Federal Reserve later this month rose after disappointing services reading fueled fears that the economic slowdown would tip the US into a recession. Traders are now pricing in a 92.5% chance of a qtr-point rate cut at the Fed's Oct meeting & a 50% chance of another cut in Dec. This is based on futures pricing from live markets & reflects the views of traders placing real bets on the CME exchange. The services sector grew at a considerably slower pace than expected in Sep with the ISM Non-Manufacturing Index posting its the weakest reading since Aug 2016. The stock market sold off sharply on the data. The weak services sector data came as US business took a big hit from the in the US-China trade war. The manufacturing sector is also flashing red as ISM posted its weakest reading in more than 10 years earlier this week. The Fed cut its benchmark overnight lending rate to 1.75-2% in Sep, the 2nd time this year. The central bank cited uncertainties around trade & muted inflation as headwinds to the US economy.
Markets now see a 90% chance Fed will cut rates this month after weak services data
Gold prices settled higher, tallying a 3rd consecutive session gain, as a drop in the Sep US ISM services sector index fed worries about the health of the economy, boosting haven demand for the precious metal. Prices, however, pulled back from the session’s best level, as US benchmark stock indices erased losses that were fed by the downbeat economic data. Service-oriented companies that employ the vast majority of Americans saw their weakest growth in Sep in 3 years. The ISM services survey dropped to 52.6% in Sep from 56.4%. That fueled safe-haven demand for gold. The US nonfarm-payrolls report tomorrow will hold new significance given reports of weakness in manufacturing & a weaker-than-expected private-sector report from Automatic Data Processing yesterday. For the week thus far, gold trades slightly higher. Weaker-than-expected global economic data & developments on the intl trade front have supported some buying of assets considered havens, like gold, but overall strength in the $, also drawing some safety bids, has muted some of the advance for precious metals. Trade tensions also were giving lift to bullion. Yesterday, the US also announced $7.5B in tariffs on import duties from the EU.
Gold settles higher as downbeat U.S ISM services data back haven demand for the metal
Negotiators from the US & China are set to resume trade discussions next week in DC, & they could be forced to broach a touchy subject when the talks resume – the pro-democracy protests in Hong Kong. The protests, which have stretched into their 17th week, reached a new level of chaos on Tues, when an officer shot a demonstrator in the chest at close range, leaving him in critical condition. It was the first shooting to occur during the protests. “It probably will have some impact on the Chinese side, even despite whatever it has on ours, because this is a sign of domestic dissent within their community and Hong Kong is quite important for the international trading activities of China,” said Commerce Secretary Wilbur Ross when discussing the protests. Trade discussions are set to resume shortly after China's Golden Week holiday, which runs thru Oct 7, when Chinese Vice Premier Liu He is scheduled to travel to DC. There has been a recent de-escalation of the trade war, but a deal has remained elusive. Last month, the US said it was postponing raising the tariffs on Chinese goods to Oct 15 out of respect for China's holiday. Beijing responded by exempting US pork & soybeans from additional tariffs. On Sun, it was reported that China could crack down on companies listing on its exchange by tightening restrictions & slowing down on their approvals. It is unclear if such action would be a trade-war weapon or more to protect investors from the low liquidity of those shares. “The president has indicated he wants a complete deal,” Ross said.
Hong Kong protests could impact trade talks
Oil futures dropped, with the US benchmark suffering from an 8th straight daily decline & another finish at its lowest in 2 months, as worries over global demand persist. Data today showed that service-oriented companies that employ the vast majority of Americans registered the weakest growth in Sep in 3 years. The Institute for Supply Management’s said its non-manufacturing index fell to 52.6 last month from 56.4 in Aug. However, oil pared losses by the settlement, with US prices down modestly for the session & global benchmark crude settling a few cents higher. West Texas Intermediate crude for Nov delivery fell 19¢ (0.4%) to settle at $52.45 a barrel, the lowest finish in about 2 months. That marked an 8th consecutive decline for the front-month contract, the longest losing streak since the 12-session fall ended Nov 2018. Meanwhile, Dec Brent erased earlier losses to tack on 2 pennies at $57.71 a barrel, following 4 sessions of declines in a row.
U.S. oil ends down for 8th straight session as demand worries grow
This turned out to a a choppy day for stocks. Pessimism in the AM on service sector data gave way to optimism in the PM on hopes for another interest rate cut & maybe even a 2nd one later this year. However economic keeps coming in on the gloomy side & a Chinese trade deal is still touchy at best. Making matters worse is the General Motors (GM) strike dragging on. In the first 3 days of Oct, the Dow is down 700. Not encouraging for investors.
Dow Jones Industrials
No comments:
Post a Comment