Markets mixed while tech shares' rebound fails

Dow fell 333 & sliding lower in the last hour, advancers modestly ahead of decliners & NAZ was off 50.  The MLP index added 2+ to the 283s & the REIT index was steady in the 428s.  Junk bond funds crawled higher & Treasuries had limited buying which brought slightly lower yields.  Oil rebounded 1+ to go over 70 (more below) & gold gained 13 to 2539.

Dow Jones Industrials

Private sector payrolls grew at the weakest pace in more than 3½ years in Aug, providing yet another sign of a deteriorating labor market, according to ADP.  Companies hired just 99K workers for the month, less than the downwardly revised 111K in Jul & below the forecast for 140K.  Aug was the weakest month for job growth since Jan 2021, according to data from the payrolls processing firm.  “The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth,” ADP's chief economist, Nela Richardson, said.  The report corroborates multiple data points recently that show hiring has slowed considerably from its blistering pace following the Covid outbreak in early 2020.  Job openings in Jul also touched their lowest point since Jan 2021, according to a Labor Dept report yesterday, while outplacement firm Challenger, Gray & Christmas reported that this was the worst Aug for layoffs since 2009 & the slowest year for hiring since the firm started tracking the metric in 2005.  Wages kept rising, but continued to show an easing pace than some of the earlier gains.  Annual pay increased 4.8% for those who stayed in their jobs, about the same level as Jul, according to ADP.  Markets expect the weakening jobs picture to push the Federal Reserve into lowering interest rates when it meets Sep 17-18.  The main question is how quickly & how aggressively the Fed will move, with current market pricing indicating at least a qtr percentage point cut at this month's meeting & a full percentage point lopped off the federal funds rate by the end of 2024.

August private payrolls rose by 99,000, smallest gain since 2021 and far below estimates, ADP says

Members of the OPEC+ oil alliance have delayed plans to hike production by a scheduled 180K barrels per day in Oct, as part of a program to gradually return a broader 2.2M barrels per day to the market over the following months.  The increase has been delayed by 2 months, according to OPEC+ sources.  The 2.2M-barrel-per-day decline had been a short-term voluntary cut implemented by just 8 members of the OPEC+ alliance.  Crude futures, which slumped in the earlier part of the week, picked up today, with the Ice Brent contract with Nov expiry was trading at $73.63 per barrel, up 1% from the previous settlement.  The front-month Oct Nymex contract was at $70.17 per barrel, higher by 1% from the previous close price.  The 2.2M-barrel-per-day cut, which was implemented over the 2nd & 3rd qtrs, was due to expire at the end of this month.  It was undertaken by Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia & the UAE as a voluntary reduction that falls outside of the official policy binding all members of the OPEC+ coalition, which sums the Organization of the Petroleum Exporting Countries & its allies.  Under official policy, OPEC+ will produce a combined 39.7M barrels per day next year.  A subset of the group's members are separately curbing their output by another 1.7M barrels per day throughout 2025, also on a voluntary basis.

OPEC+ members delay plans to hike production by two months after oil price slump

Ford's (F) US vehicle sales jumped 13.4% last month, led by increases in the company's F-Series trucks & hybrid models. The Detroit automaker reported sales of nearly 183K vehicles in Aug, including a 12.3% increase in trucks & a roughly 50% jump in hybrid vehicles compared to a year earlier.  Its all-electric vehicle sales jumped 29% during that time, including a notable increase in its F-150 Lightning pickup.  Despite the increase in electrified vehicles, traditional cars & trucks with internal combustion engines still represented 86% of Ford's sales last month.  Ford's Aug sales outpaced overall industry estimates of a roughly 6% year-over-year increase from a year earlier, according to Barclays.  Despite steep prices & high interest rates, US auto sales have remained stable in 2024, but they’re not as high as some expected to begin the year.  Barclays lowered its 2024 sales forecast from 16M vehicles to 15.8M, citing a 15.7M sales pace thru Aug.  Ford's US sales thru Aug were up 4.3% to 1.4M units.  Ford stock fell 10¢.

Ford truck, hybrid models lead to 13% increase in August sales

Investors digested more weaker-than-expected labor market data that could help set expectations for both interest rate cut hopes & the health of the US economy.  The market is torn between conflicting impulses as data releases paint a downbeat picture of the economy.  Recent soft readings make the case for deeper rate cuts.  But they could also be a sign the US is on the brink of recession & a "soft landing" is no longer in the cards.  Traders see an almost 50-50 chance the Federal Reserve will lower rates by 0.5% at its Sep meeting.  So far in Sep, Dow is down more than 900.