Dow went up 58, advancers over decliners better than 3-2 & NAZ gained 70. The MLP index was steady in the 239s & the REIT index was off 1+ to the 368s. Junk bond funds were mixed & Treasuries had a little buying which reduced yields (more below). Oil climbed 1+ to 83 & gold slid back 3 to 1969.
AMJ (Alerian MLP Index tracking fund)
An inflation measure closely watched by the Federal Reserve ticked higher in Jul as steep prices continue to squeeze Ms of US households. The personal consumption expenditures (PCE) index showed that consumer prices rose 0.2% from the previous month, according to the Labor Dept. On an annual basis, prices climbed 3.3% – up from 3% the previous month, underscoring the challenge of taming high inflation. The figures were both in line with estimates. Core prices, which strip out the more volatile measurements of food & energy, climbed 0.2% from the previous month & 4.2% from the previous year. While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%, Chair Jerome Powell previously said that core data is actually a better indicator of inflation. Both the core & headline numbers point to inflation that is still running above the Fed's preferred 2% target. Other figures included in the report showed that consumer spending jumped 0.8% in Jul, compared with a 0.6% increase in Jun. Still, many economists anticipate that spending will slow in coming months as spenders continue to grapple with expensive goods, high interest rates & the resumption of federal student loan payments. "Consumers spent freely in July even if it meant dipping into their savings amid slower income growth," said Gregory Daco, EY chief economist. "We anticipate the trend will slow in August and September as elevated prices for goods and services, higher borrowing costs and moderating income limit consumers’ spending appetite."
Key inflation gauge spells bad news for American families
Treasury yields fell as investors looked to the release of key jobs data which could provide insight into the state of the US economy. The 10-year Treasury yield was trading 2 basis points lower at 4.098%, but the 2-year Treasury yield, most sensitive to the Federal Reserve's fed funds interest rate, ticked up less than 1 basis point to 4.89%. Yields & prices move inversely to one another & 1 basis point equals 0.01%. The personal consumption expenditures index, closely monitored by central bank policymakers, ticked up 0.2% month-over-month in July and & 4.2% year-over-year, matching estimates. Personal spending, however, great at a faster pace, expanding by 0.8% versus economists' forecast of 0.7%. Fed Chair Jerome Powell said last week at the central bank’s annual Jackson Hole symposium that inflation remains too high & indicated that interest rates may go higher still. Investors had previously been hoping that the Fed's latest interest rate increase in Jul marked the end of the rate-hiking cycle which began in Mar 2022 & aimed to cool the economy & fight inflation. Economic data released yesterday showed the economy may be pulling back, with the 2nd-qtr gross domestic product revised downward to a 2.1% annual growth rate.
Treasury yields ease ahead of big August jobs report on Friday
China's ambassador to the US, Xie Feng, has blamed US tariffs & export controls for a drop in trade between the 2 countries. China-US trade fell by 14.5% in H1 of the year from a year ago, Xie pointed out. “This is a direct consequence of U.S. moves to levy Section 301 tariffs on Chinese imports, abuse unilateral sanctions and further tighten up export controls,” he added. “Livelihoods of many families have been affected, and businesses from both countries have born the brunt.” The US is China's largest trading partner on a single country basis. YTD US-China trade fell further in Jul with a 15.4% decline from the same period in 2022, China customs data showed. “The biggest risk is any decoupling between China and the United States, and the largest source of insecurity comes from any confrontation between the two,” he said. “To shut out China is to close the door on opportunities, cooperation, stability and development.” Exports remain a major contributor to China's economy, although their share has fallen in recent years.
China says drop in trade with the U.S. is ‘a direct consequence of U.S. moves
Dow Jones Industrials
No comments:
Post a Comment