Dow sank 410, decliners over advancers about 5-1 & NAZ was off 271. The MLP index crawled higher to the 211s & the REIT index gave back another 4+, falling to the 349s. Junk bond funds slid lower & Treasuries saw more selling, raising yields. Oil added 2+ to the 91s & gold fell 9 to 1711.
AMJ (Alerian MLP index tracking fund)
US job growth slowed for a 2nd consecutive month in Sep, but hiring remained solid despite growing headwinds from higher interest rates, scorching-hot inflation & mounting recession fears. Employers added 263K jobs in Sep, the Labor Dept said, slightly topping the 250K jobs forecast. It marks a deceleration from the 315K job gain recorded in Aug & matches the lowest monthly gain since Apr 2021. The unemployment rate, meanwhile, unexpectedly dropped to 3.5%, returning to the historic low recorded in Jul as the size of the labor force decreased. Average hourly earnings also continued to rise, but at a slower pace of 0.3% this month, to $32.46 an hour. Slower wage growth could be evidence that inflation is starting to cool, although it also means that lower-income workers are being hit even harder by higher prices. Job gains were broad-based in Sep, with leisure & hospitality leading the way in hiring, adding 83K new workers. That was followed by health care (60K), professional & business services (46K), manufacturing (22K) & construction (19K). However, some sectors saw pays shrink last month: Financial activities & transportation along with warehousing both shed 8K jobs in Sep.
US job growth slows in September with 263,000 positions added
New cars are slowly becoming more widely available, as supply chain bottlenecks finally start to ease. But now, an increasing number of Americans might not want them or be able to afford them. With the Federal Reserve aggressively hiking interest rates to fight inflation, consumers are finding that the cost of financing a new car is suddenly a lot higher than it was even earlier this year. That's expected to cut demand & add new pressure to the auto industry, which had been struggling with depleted inventories during the pandemic. "The irony for the auto market is that just as the industry is poised to start seeing volumes increase from supply-constrained recession-like low levels, the rapid movement in interest rates is reducing demand," Cox Automotive Chief Economist Jonathan Smoke wrote in a blog. At the end of Q3, Cox Automotive found the new vehicle loan rate was 7%, up 2 percentage points for the year. The loan rate in the used market was up by the same amount, to 11%, according to Cox Automotive. The higher cost for car financing comes as household budgets are already being squeezed by decades-high inflation. That means many Americans may no longer to be able to afford the new cars that are starting to arrive on dealer lots. And the cost of financing is expected to keep climbing. Already this year, the Fed has aggressively increased interest loan rates to 3-3.25%, & it has indicated it plans to continue hiking rates until the the fed funds rate hits 4.6% in 2023. Automakers could offset costs with financing deals & discounts, but the latter is something companies have vowed not to return to amid record profits.
New cars are finally back in stock — but Americans might not be able to afford them
Pres Biden
is once again tapping into the country's emergency stockpile of oil as
the White House tries to prevent gasoline prices from spiking again,
reducing the petroleum reserve to its lowest level in 4 decades. The nation"s Strategic Petroleum Reserve had 416M barrels last week – the lowest level since 1984 – after the Biden administration released another 6.2M barrels, according to Dept of Energy data. Biden
had tapped the emergency oil stash 4 times over the past year in
hopes of lowering gas prices, including in Mar, when he ordered a
record-setting 180M barrels of oil released from the reserve – 1M barrels per day over 6 months. With the releases
scheduled to finish this month, the White House said that
it would release 10M additional barrels in Nov. The decision to further drain the oil reserves came hours after a
coalition of oil-producing countries led by Russia & Saudi Arabia,
known as OPEC+, announced it would slash oil production
by 2M barrels, the first major cut in 2 years. The move –
which came despite lobbying from US officials to do otherwise –
threatens to raise oil prices at a time when the world is already
combating record-high inflation. The White House condemned the production cuts, which threaten to push gas prices higher with midterm elections just one month away. "The
president is disappointed by the shortsighted decision by OPEC Plus to
cut production quotas while the global economy is dealing with the
continued negative impact of Putin’s invasion of Ukraine," Brian Deese,
the director of the National Economic Council, & Jake Sullivan, the
national security adviser, said. After hitting a
record high of $5.01 per gallon in mid-Jun, a gallon of gas now costs
about $3.86 on average.
US emergency oil supply shrinks to 40-year low as Biden keeps tapping
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