Markets drift lower after relief rally fails

Dow finished up 30, but decliners ahead of advancers about 5-4 & NAZ gained 86.  The MLP index gained 4+ to the 222s & the REIT index declined 6 to the 407s.  Junk bond funds inched higher & Treasuries had limited buying.  Oil was up 1+ to the 88s & gold dropped 10 to 1707 (more on both below).

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One of the unions representing rail workers said that its members rejected a proposed deal with rail carriers & voted to move forward with a strike that could have severe consequences for the US economy.  The Intl Association of Machinists & Aerospace Workers issued a statement saying that roughly 4900 of its members turned down the tentative agreement with the National Carriers' Conference Committee (NCCC) representing railroads, but noted that they would hold off on striking for at least a few weeks while other unions continue their talks.  "The Tentative Agreement has been rejected and the strike authorization vote was approved by IAM District 19 members," IAM District 19 said.  "Out of respect for other unions in the ratification process, an extension has been agreed to until Sept. 29, 2022 at 12 p.m. ET. This extension will allow us to continue to negotiate changes with the NCCC in the hopes of achieving an agreement our membership would ratify."  "IAM freight rail members are skilled professionals who have worked in difficult conditions through a pandemic to make sure essential products get to their destinations," the statement continued.  "We look forward to continuing that vital work with a fair contract that ensures our members and their families are treated with the respect they deserve for keeping America’s goods and resources moving through the pandemic. The IAM is grateful for the support of those working toward a solution as our members and freight rail workers seek equitable agreements."

Railroad union votes to authorize strike that could hammer economy

More than ½ (55%) of respondents in a new survey from Bankrate.com say their incomes have not kept up with rising household expenses amid persistent high inflation.  Only 33% of respondents said their incomes have either kept up with or exceeded higher household expenses.  The online survey was conducted Aug 17-19& included 2458 adults.  New gov inflation data released yesterday showed inflation in Aug was higher than expected, as the consumer price index increased 0.1% for the month & 8.3% over the past 12 months.  The survey found 40% of employed respondents have received raises in the past 12 months.  Meanwhile, 13% got a better-paying job.  A lucky 8% got both a pay raise & a better-paying job.  The remaining 39% of respondents didn't get either one.  But securing bigger paychecks did not necessarily help workers stave off inflation. ½ of those who are now earning more still say their pay hasn't kept up with rising costs.  Yet 39% said the increase either kept up with or exceeded the increase in household costs.  Just 31% of workers received a pay increase to accommodate higher living costs.  Instead, workers were more likely to secure more pay for other reasons.  That includes 36% who received a performance-based raise, 16% who got a promotion or new responsibilities & 10% who cited other reasons such as contract or seniority.  “The takeaway continues to be that pay raises predominantly come in the form of performance-based increases, promotions or taking on new job responsibilities,” said Greg McBride, chief financial analyst at Bankrate.com.  “The cost-of-living increase is still very much the exception, rather than the rule,” he added.  Performance-based increases were more likely to go to Gen Xers & baby boomers rather than millennial or Gen Z workers.  But pay increases due to promotions or new job responsibilities were more common among Gen Z & millennials, rather than Gen X & baby boomers.

Pay isn’t keeping up with inflation, survey finds. What experts say to do

Monkeypox continues to spread across the US, but the pace of new cases has slowed over the last several weeks, Dr Rochelle Walensky, director of the Centers for Disease Control (CDC) said.  While the virus is still spreading at a rapid clip in certain regions of the US, the growth of new monkeypox cases across the country & globally has been abating in recent weeks, she testified before the Senate Committee on Health, Education, Labor & Pensions.  “We approach this news with cautious optimism,” she added.  The US is working to contain the largest monkeypox outbreak in the world, with more than 22K cases across all 50 states, DC & Puerto Rico.  The disease is rarely fatal, but causes painful lesions resembling pimples or blisters.  There has been one confirmed death in the US as a result of the disease.  The Jynneos vaccine, manufactured by Danish biotech company Bavarian Nordic, is the only approved monkeypox vaccine in the US.  2 doses are administered 28 days apart & CDC officials say it's crucial for people at risk to receive the 2nd shot.

U.S. monkeypox outbreak is slowing, CDC director says 

Oil futures settled higher, buoyed in part by a report that said the Biden administration may consider refilling the nation's Strategic Petroleum Reserve when crude prices dip below $80 a barrel.  While rallies are likely to be constrained by concerns over demand & China's zero-COVID policy, there is, in effect, a Biden put under the oil market.  Oct WTI crude rose $1.17 (1.3%) to settle at $88.48 a barrel. 

Oil futures end higher on speculation the Biden administration may refill the U.S. oil reserve

Gold futures extended their decline to a 2nd session in a row, as a surprisingly strong US Aug inflation print continued to reverberate across markets.  Gold price for Dec fell $8 (0.5%) to settle at $1709 per ounce after losing 1.3% yesterday.  That was the lowest finish for a most-active contract since Jul 20.  Gold peaked on Mon before it began its slide this week.  Now, it's trading just above the closely watched $1700 level.  Gold traders are also feeling enormous pain due to the strength in the $ index, which has been increasing mainly due to higher bets on a more aggressive monetary policy.  The ICE US Dollar index was down 0.3% at 109.505 today, but has gained 0.5% so far this week.  Falling gasoline prices helped deliver a 2nd lower US annual inflation reading in a row as the consumer price index increased by just 0.1% in Aug, but the report also showed inflation has spread more broadly thru the economy & is set to spur the Federal Reserve to sharply raise interest rates again.

Gold extends slide to a second session thanks to unexpected August rise in U.S. inflation

In the AM, bulls tried & tried to get their steam engine rolling, but no success.  This is not a happy time for investors while they wa1t for dreary news about rate hikes from the Fed next week.  Some traders are already looking for a 100 BP increase by the Fed next week.

Dow Jones Industrials