Dow jumped another 757, advancers over decliners a massive 10-1 & NAZ soared 365. The MLP index went up 6+ to the 211s & the REIT index advanced 7+ as interest rates declined. Junk bond funds rose along with stocks & Treasuries had more buying, reducing yields. Oil was up 2+ to the 86s & gold added another 30 to 1732.
AMJ (Alerian MLP index tracking fund)
US job openings unexpectedly dropped in Aug to the lowest level in over a year as the Federal Reserve tries to bring down near-record high inflation & cool the labor market. The Labor Dept said that there were 10.1M job openings in Aug, a major decline from the previous month's revised reading of 11.2M. Still, the number of available jobs has topped 10M for 15 consecutive months; before the pandemic began in Feb 2020, the highest on record was 7.7M. The Federal Reserve closely watches these figures as it tries to gauge labor market tightness; the lower-than-expected number of openings could provide some relief for policymakers as they try to slow the economy & cool painfully high inflation. Meanwhile, the number of Americans quitting their jobs rose to 4.2M (about 2.7% of the workforce). The high was 4.5M recorded earlier this year, but well above the pre-pandemic level of about 3.6M. Hiring was also mostly unchanged at 6.3M. Switching jobs has been a windfall for many workers over the past year, with employees seeing an average 6.7% annual wage growth rate – a marked increase from the 4.9% of workers who do not switch jobs, according to the Atlanta Fed. The Fed has responded to the inflation crisis & the extremely tight labor market by raising interest rates at the fastest pace in decades. Officials approved 3 consecutive 75 basis point rate hikes in Jun, Jul & Sep & have signaled that another of that magnitude is on the table in Nov.
Job openings unexpectedly plunge to lowest level since June 2021
The Federal Reserve & other major central banks risk triggering a painful global recession followed by a period of stagnation with such aggressive interest rate increases, a UN agency warned. In its annual report on the global economic outlook, the UN Conference on Trade & Development (UNCTAD) said the interest rate increases & austerity policies in wealthy nations represented an "imprudent gamble" that risked backfiring, particularly on lower-income nations. "There’s still time to step back from the edge of recession," UNCTAD Secretary-General Rebeca Grynspan said. "We have the tools to calm inflation and support all vulnerable groups. But the current course of action is hurting the most vulnerable, especially in developing countries and risks tipping the world into a global recession." The agency estimated that a percentage point increase in the Fed's benchmark federal funds rate reduces the economic output in other wealthy nations by about 0.5%, & in poor countries by about 0.8% over the next 3 years. Lower-income nations will already see economic output tumbled by about $360B over the next 3 years as a result of the Fed's rate increases so far this year. "Excessive monetary tightening could usher in a period of stagnation and economic instability," UNCTAD said. "Any belief that they (central banks) will be able to bring down prices by relying on higher interest rates without generating a recession is, the report suggests, an imprudent gamble."
UN sends urgent warning to Fed as global depression fears take hold
Home prices in the US are sinking at the fastest monthly pace since the last recession, evidence that rising mortgage rates are rapidly slowing activity in the housing market Median
home prices fell 1.0% in Aug from a month earlier, following a
1.1% drop in Jul, mortgage analytics firm Black Knight said. "Together they represent two straight months of
significant pullbacks after more than two years of record-breaking
growth," said Black Knight Data & Analytics Pres Ben Graboske. The
price declines are the sharpest since 2009, when the economy
was in the midst of the worst recession since the Great Depression. Median home prices are down 2% since their
Jun peak. "The only months with materially higher single-month price declines
than we’ve seen in July and August were in the winter of 2008, following
the Lehman Brothers bankruptcy and subsequent financial crisis,"
Graboske added. The once red-hot housing sector is in the midst of a severe correction as the Federal Reserve raises interest rates at the fastest pace in decades. Mortgage rates have more than doubled to 6.29%, according to recent
data from mortgage lender Freddie Mac & could continue to climb
higher. While home price growth has cooled over the past month,
prices remain well above where they were just one year ago, putting
affordability out of reach for many prospective buyers. New home sales
unexpectedly surged in Aug, with new single-family home purchases
jumping nearly 29%. However, economists largely think that the surprise
upside is an anomaly & merely represents an effort by buyers to lock
in a lower mortgage rate as the average 30-year fixed rate average
dipped closer to 5% from earlier highs.
US home prices drop at fastest pace in over a decade
The bulls came out of hiding & are back in force bidding depressed stock prices higher. However, fundamental problems, highlighted by high interest rates & fears of a significant recession are still around. Over the short term, the 2 day rise in stocks is making investors feel better after a dreary Sep.
Dow Jones Industrials
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