Dow dropped 258, decliners over advancers a hefty 7-1 & NAZ retreated 255. The MLP index was off 1+ to the 219s & the REIT index fell 4+ to the 442s. Junk bond funds fluctuated & Treasuries were heavily sold bringing the yield on the 10 year Treasury up 11 basis points to 3% (more below). Oil edged higher to go over 91 & gold was even at 1761.
AMJ (Alerian MLP index tracking fund)
General Motors (GM)
is reinstating a quarterly cash div that was cut to preserve funds during the early days of the coronavirus pandemic, although it will be at a much lower rate than when it was suspended. The
automaker said the GM board of directors authorized a
div at a quarterly rate of 9¢. That’s a roughly 76% reduction from the 38¢
when the div was suspended in Apr 2020. GM
will also resume & increase its opportunistic share
repurchases to $5B of common stock, up from the $3.3B
previously remaining under the program. It did not specify a timeframe
for the repurchases. The stock rose 63¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM to reinstate quarterly dividend and increase share buybacks to $5 billion
Treasury yields moved higher as investors digested the previous day’s data release, which showed jobless claims edging lower, below expectations. The yield on the benchmark 10-year Treasury note was up 9 basis points at 2.972%, while the yield on the 30-year Treasury bond traded up 7.5 basis points to 3.216%. Yields move inversely to prices & a basis point is equal to 0.01%. The rise in yields was a shift from the previous session, which saw yields cooling as markets mulled over the Federal Reserve's released Jul meeting minutes. The Fed indicated that it would continue hiking rates until inflation slows down significantly, although the central bank could soon decrease its pace of tightening. Yesterday also revealed a further slowdown in housing demand, with home sales falling nearly 6% in Jul as the housing market enters a contraction. Jobless claims counted at 250K, down 2K from the prior week & below the estimate of 260K. Markets & monetary policy officials are watching the job market closely, as rate increases aim to cool a labor market & 40-year high inflation. Fed policymakers said that lowering inflation is top priority, even if it means a decrease in hiring.
Treasury yields climb higher following jobless claims report
The pan-European Stoxx 600 was down 0.3% ahead of the close, with travel & leisure stocks dropping 2% while health care stocks added 1%. Investor sentiment has been tepid since mid-week after minutes from the Federal Reserve’s Jul meeting showed policymakers would not consider pulling back on interest rate hikes until inflation came down substantially, despite a slight slowing in inflation that had offered some hope for a less aggressive tightening path. On the data front, European investors were digesting Jul's UK retail sales & German producer prices. Markets in Asia-Pacific were mixed, taking their cues from a muted US stock market, where the S&P 500 is looking to grind out another positive week.
European markets trade lower as investors digest gloomy German data
Dow Jones Industrials
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