Markets fall as selling in tech stocks on Nasdaq resumed

Dow dropped 373 near session lows, decliners over advancers 5-2 & NAZ retreated 257;  The MLP index was lower in the 236s & the REIT index lost 1+ to 361.  Junk bond funds continued weak & Treasuries saw more selling, raising yields.  Oil crawled pennies higher above 79 & gold was off 2 to 1945 (more on both below).

AMJ (Alerian MLP Index tracking fund)

Free Apple Analysis!

Bring Your Portfolio Into The 21st Century

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

The number of Americans filing new claims for unemployment benefits fell for a 2nd straight week, as labor market conditions remained tight despite the Federal Reserve's aggressive interest rate hikes.  Initial claims for state unemployment benefits decreased by 10K to a seasonally adjusted 230K for last, the Labor Dept said.  The previous week's level was revised up by 1K claims.  The forecast called for 240K claims for the latest week.  Economists have anticipated a downturn in the labor market since the Fed began increasing rates in Mar 2022 & some have been bracing for a measurable increase in unemployment claims in the wake of the recent collapse of Yellow trucking company, which has about 30K workers.  But the anticipated shock hasn't arrived & the labor market is continuing to defy expectations as employers hoard workers after struggling to find labor during the COVID-19 pandemic.  Labor market strength & a slowdown in inflation are fanning optimism that the economy could avoid a recession.  The number of people receiving benefits after an initial week of aid, a proxy for hiring, decreased by 9K (1.702M) during the prior week.  These continuing claims remain low by historical standards, indicating that some laid-off workers are experiencing short spells of unemployment.

US Jobless Claims Fall as Labor Market Remains Tight

New orders for manufactured durable goods in Jul, down following 4 consecutive monthly increases, decreased $15.5B (5.2%) to $286B the Census Bureau announced.  This followed a 4.4% Jun increase.  Excluding transportation, new orders increased 0.5% & excluding defense, new orders decreased 5.4%.  Transportation equipment, also down following 4 consecutive monthly increases, drove the decrease, $16.4B (14.3%) to $98.7B.  Shipments of manufactured durable goods in Jul, up 4 of the last 5 months, increased $0.1 to $283.6.  This followed a virtually unchanged Jun increase.  Machinery, up 6 of the last 7 months, drove the increase, $0.1B to $37.9B.  Unfilled orders for manufactured durable goods in Jul, up 7 of the last 8 months, increased $7.3B (0.5%) to $1332B.  This followed a 1.8% Jun increase.  Transportation equipment, also up 7 of the last 8 months, led the increase, $7.0B (0.9%) to $834B.  Inventories of manufactured durable goods in Jul, down 2 consecutive months, decreased $0.2B (virtually unchanged) at $522B.  This followed a 0.1% Jun decrease.  Transportation equipment, also down 2 consecutive months, drove the decrease, $0.3B (0.2%) to $163B.

Durable Goods Orders Declined 5.2% in July

A growing number of Americans are falling behind on their monthly credit card payments, a trend that may be a harbinger of economic troubles ahead, according to a new report from Wells Fargo.  Findings from the bank indicate that credit card delinquencies are surging among commercial banks – particularly at small lenders.  Late credit card payments at banks that are outside the top 100 in asset size recently surged to a record high.  Those delinquencies raise the pressure on small- & medium-sized banks, which are already grappling with tightening credit conditions in the wake of 3 major bank failures earlier this year.  "The economy still has a cash cushion, but many consumers are exhausting their credit, while income growth has slowed sharply," the Wells Fargo strategists wrote.  "Our outlook remains for a short, moderate recession and then recovery for most of 2024 and likely into 2025."  The report comes amid signs that Americans are increasingly relying on their credit cards to cover everyday expenses.  The New York Federal Reserve reported earlier in Aug that total credit card debt surged to $1.03T during the 3-month period from Apr-Jun, an increase of $45B (4.6%) from the previous qtr.  It marks the highest level on record in Fed data dating back to 2003.  The dual increase in credit card usage & delinquency rates is particularly concerning because interest rates are astronomically high right now.  The average credit card annual percentage rate, or APR, hit a new record of 20.6% last week, according to a Bankrate database that goes back to 1985.  The previous record was 19% in 1991.  The trouble is that if people are carrying debt to compensate for steeper prices, they could end up paying more for items in the long run.  The New York Fed report also indicated that there has been an uptick in borrowers who are struggling with credit card & auto loan payments.  As of Jun about 2.7% of outstanding debt was in some stage of delinquency, up slightly from the 2.6% recorded the previous qtr.  That remains 2 percentage points lower than the pre-pandemic level.  But the fact that there is any semblance of delinquency rates rising during such a strong labor market is concerning.  Experts have warned the rate may begin to climb higher as student loan payments resume in the fall after the Supreme Court struck down Pres Biden.s forgiveness plan.

Credit card delinquencies are on the rise - and it may be a new sign of trouble

Gold futures settled lower, a day after posting its largest daily percentage gain since the end of Jul.  Prices for the precious metal remained under pressure with  attention turning toward the Federal Reserve. Fed Chair Jerome Powell's speech tomorrow could create significant price movements as investors look for additional clues regarding the direction of monetary policy.  Dec gold fell $1 to settle at $1947 an ounce.

Gold Futures Finish With a Loss Ahead of Powell’s Speech on Friday

Oil futures inched higher, recouping a small portion of losses from a day earlier that pulled prices to their lowest finish in a month.  Oil bulls will need to see renewed evidence of a soft/no-landing scenario in coming global economic releases & better growth metrics overseas.  West Texas Intermediate crude for Oct climbed by 16¢ to settle at $79.05 a barrel.

U.S. Oil Futures Settle Higher a Day After Posting Their Lowest Finish in a Month

The day began with buying, as the the bears took command.  The rest of the day, the bears were in charge & took Dow lower & lower.  Dow is down about 1450 in Aug.  Everybody is hoping Powell will have kind words tomorrow.

Dow Jones Industrials