Dow fell 36, advancers over decliners 3-2 & NAZ shot up 100. The MLP index added 1+ to the 177s & the REIT index jumped 4+ to the 478S. Junk bond funds fluctuated & Treasuries were a tad lower. Oil was off 1 to the 67s & gold lost 7, falling to 1811.
AMJ (Alerian MLP index tracking fund)
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US private-sector hiring rose much less than expected last month as a resurgence in new COVID-19 infections stunted job gains. The economy added 374K private-sector jobs in Aug, a modest increase from the downwardly revised 326K jobs added in Jul, according to the ADP National Employment Report. The forecast expected the addition of 613K jobs. "The Delta variant of COVID-19 appears to have dented the job market recover," said Mark Zandi, chief economist of Moody's Analytics. "Job growth remains strong, but well off the pace of recent months." Also potentially impacting job growth was the start of the Child Tax Credit, which sent up to $1800 per child per month to about 36M American families. The effect of payments on the labor market are being assessed. Service-sector hiring accelerated last month with the addition of 329K jobs, up from 318K in Jul. Within services, leisure & hospitality continued to lead the job gains, adding 201K new workers, up from last month's 139K new hires. Education & health services (+59K), professional & business services (+19K) & trade, transportation & utilities (+18K) all saw a slowdown in hiring. The goods-producing sector gained 45K new workers last month, led by construction (+30K). In Jul, goods producers added 12K new jobs. Job gains were pretty evenly distributed across small- (+86K), medium- (+149K) & large-sized (+138K) businesses.
Private sector hiring falls short of expectation as pandemic stunts gains
Covid-19 vaccines are still “stunningly effective” despite fears that immunity may dwindle over time, experts have said. There have been some concerns about the efficacy of Covid-19 vaccines after a number of recent studies indicated a growing number of “breakthrough” Covid cases among the fully vaccinated. The studies have, however, shown that the fully vaccinated are still highly protected against severe infection, hospitalization & death caused by the virus. Preliminary data published by the Israeli gov in Jul showed that the Pfizer (PFE) vaccine was just 16% effective against symptomatic infection for people who had received 2 doses in Jan. For people who had been fully vaccinated by Apr, the vaccine was 79% effective against symptomatic infection, suggesting that immunity gained thru immunization depletes over time. A piece of research funded by PFE, published in Jul, showed that the efficacy of the PFE-BioNTech (BNTX) vaccine was strongest between one week & 2 months after receiving the second dose, coming in at 96.2%. It then, however, declined by an average of 6% every 2 months. 4-6 months after a 2d dose, its effectiveness fell to around 84%. In Aug, meanwhile, a UK study of more than one M fully vaccinated people found that protection from both the Oxford (OXM)-AstraZeneca (AZN) & the PFE-BNTX vaccines faded over time. A month after receiving a 2nd dose of the PFE vaccine, protection against the virus stood at 88%, the analysis showed. After 5-6 months, that protection fell to 74%. Protection stood at 77% a month after being fully vaccinated with the OXM-AZN vaccine, & fell to 67% after 4-5 months.
Covid vaccines remain ‘stunningly effective,’ even as Delta concerns grow
A prolonged period of low mortgage rates is taking its toll on the refinance market, as most borrowers who qualify have already gone thru the process. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548K or less) remained unchanged at 3.03% last week, with points increasing to 0.34 from 0.29 (including the origination fee) for loans with a 20% down payment. As a result, applications to refinance a home loan dropped 4% for the week, seasonally adjusted, & were just 2% higher than a year ago, the Mortgage Bankers Association reported. Rates were just 5 basis points higher at this time last year, but they were lower last fall & at the start of this year, so a large share of borrowers have lower rates than today's. “Recent uncertainty around the economy and pandemic have kept rates low over the past month, which is why the refinance index has oscillated around these levels,” said Joel Kan, MBA's associate VP of economic & industry forecasting. Applications for a mortgage to purchase a home rose 1% for the week but were 16% lower than a year ago. Home sales have been slowing, as potential buyers hit an affordability wall. Home prices were up 18.8% in Jun, a record annual gain, on the S&P Case Shiller national home price index. “Home purchase activity continues to be dominated by higher price tiers of the market, with the purchase average loan size now at $396,500, the highest average in five weeks,” Kan added. Mortgage rates started this week slightly lower but still haven't moved much. That could be about to change in either direction. “All lenders will face increased volatility in the coming days due to the release of several important economic reports culminating in Friday’s big jobs report,” said Matthew Graham, chief operating officer at Mortgage News Daily.
Weekly mortgage-refinance demand drops as interest rates stall
The private payroll report did not disturb investors, although other economic indicators for Aug have been coming in a bit sluggish. Popular stock indices continue at or near record highs.
Dow Jones Industrials
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