Dow went up 16, advancers over decliners about 2-1 & NAZ gained 52. The MLP index inched higher in the 239s & the REIT index was even at 368. Junk bond funds were little changed & Treasuries had very limited buying, so yields edged lower.(more below). Oil crawled up pennies in the 81s & gold added 9 to 1974.
AMJ (Alerian MLP Index tracking fund)
Hiring by US companies slowed more than expected in Aug, pointing to a labor market that is starting to cool in the face of higher interest rates, according to the ADP National Employment Report. Companies added 177K jobs last month, below the 195K gain that was predicted & is also much lower than the revised 371K increase recorded in Jul. It marked the worst month for job creation since Mar. The weaker-than-expected report comes in the wake of an aggressive tightening campaign by the Federal Reserve, which has hiked rates to the highest level since 2001. Chair Jerome Powell signaled last week that additional rate increases may be on the table as policymakers assess whether high inflation has retreated for good. In a potentially welcoming sign for the Fed as it tries to wrangle inflation under control, wages continued to moderate in Aug. Annual pay rose 5.9% last month, the slowest growth since Oct 2021, according to the report. For workers who switched jobs, wages climbed 9.5%, down from 10.2% the previous month. "This month's numbers are consistent with the pace of job creation before the pandemic," said Nela Richardson, ADP's chief economist. "After two years of exceptional gains tied to the recovery, we're moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede." The notable slowdown in job growth was largely driven by the leisure & hospitality, which added just 30K new employees in Aug after months of strong hiring. Education & health services accounted for the biggest gains in Aug, onboarding about 52K employees. That was followed by trade, transportation & utilities, which grew by 45K.
Private sector job growth cools sharply in August to 177,000, worse than expected: ADP
Treasury yields were lower as investors digested reports that suggested weakening economic growth. The 10-year Treasury yield was down 2 basis points at 4.104%, after having fallen by as many as 10 basis points yesterday & the 2-year Treasury yield was last trading at 4.86% after falling by 3.1 basis points. Yesterday, it had dropped by as many as 16 basis points. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Private payroll data from ADP showed employers added 177K jobs in
Aug, which was lower than the forecast of 200K &
sharply below the revised Jul reading of 371K. That take,
coupled with a downward revision in the Q2 GDP to a 2.1% annualized rate of growth, suggests a cooling off in
the economy, although the pace is still healthy. Meanwhile, yields fell yesterday as investors considered economic data,
including the latest consumer confidence index which came in at 106.1,
lower than the estimate of 116. The report also
showed that consumers’ inflation expectations for the next 12 months
increased. JOLTs job openings data, also yesterday, reflected a
fall of available positions to 8.8M In Jul, the lowest level
since Mar 2021.
Treasury yields fall after reports suggest slowing economic growth
Shares of HP (HPQ) fell after the printer & PC-maker
released fiscal 3rd qtr earnings that was underwhelming. HPQ
reported $13B in revenue, down from the $13.4B
expected. EPS came in
line with expectations at 86¢, excluding items. The company also
offered weak guidance, citing the fact that PC pricing has not improved
as much as it had hoped. Analysts said the qtr was disappointing, but that PC
revenues will likely improve going forward. However, the company's printing business may be more of a sticking point. The stock fell 2.62 (8%).
If you would like to learn more about HPQ, click on this link:
club.ino.com/trend/analysis/stock/HPQ_aid=CD3289&a_bid=6aeoso5b6f7
Shares of HP fall 8% following revenue miss
The job data for Aug indicates there will be less pressure to raise interest rates going forward, The huge storm hitting Florida will pinch the economy, although there will be demand for more repair work. Trading continues to be light this week.
Dow Jones Industrials
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