Dow was down 20, decliners modestly ahead of advancers & NAZ fell 63. The MLP index slid 1+ lower to the 115s & the REIT index gave back 5 to the 353s. Junk bond funds inched higher & Treasuries were off a tad. Oil climbed higher in the 41s & gold gained 12 to 1962.
| CL=F | Crude Oil | 41.29 | +0.32 | +0.8% |
| GC=F | Gold | 1,957.20 | +7.30 | +0.4% |
Inflation may be stronger in coming qtrs than expected, said St. Louis Fed Pres James Bullard. "I actually think we're at a moment where you may see some inflation now," Bullard said at Washington University. The Fed has signaled that it would allow inflation to overshoot its 2% target for some time. The pledge has met with some skepticism because the central bank has failed to hit its 2% target in recent years. Bullard said there were several factors that could push the price level higher: a more relaxed Fed, huge fiscal deficits & possible bottleneck pressures given the 30% annual growth rate expected in the Jun-Sep qtr. "I actually think you may see more inflation than we have during the pre-pandemic era... when inflation was very subdued," he added.
Fed's Bullard says inflation may be stronger than Wall Street expects
The Univ of Mich said the preliminary reading of its US consumer sentiment index in Sep was 78.9, up from 74.1 in the prior month. The forecast expected a reading of 75.9. The sentiment indicator covers how consumers view their personal finances as well as business & buying conditions. The index hit its “best level since March,” but “longer-run inflation expectations ticked down to 2.6% while near-term inflation expectations slipped to 2.7%, the lowest since April,” said Neil Dutta, head of economics at Renaissance Macro Research, in a note. His team's suspicion is that “as supply and capacity constraints ease, inflation will moderate along with expectations thereof,” Dutta added. The amount of confidence Americans have in the economy & their own financial security has a good record of predicting the future. Until they feel more secure, the economy is unlikely to make a rapid recovery from the coronavirus recession. While the Univ of Mich's consumer sentiment index has climbed to its highest level since Mar, it remains well below its Feb reading that was north of 100.
Consumer sentiment index rises to 78.9 in September, highest level since March
The US current-account deficit, a measure of the nation's debt to
other countries, widened sharply in Q2. The
current-account deficit widened to $170B from a revised $112B in Q1 for a 52.9% increase. The large
widening reflected an expanded deficit of goods & reduced surpluses on
primary income & on services, the gov said. The current
account reveals if a country is a net lender or debtor. The current
account deficit was equal to 3.5% of GDP in Q2, up from
2.1% in the prior qtr. The current-account deficit peaked in 2005 at
6.3%.
U.S. current account deficit widens sharply to $170.5 billion in second quarter
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