Dow slid back 44, advancers over decliners 4-3 & NAZ was off 14. The MLP index edged up 1+ to the 227s & the REIT index added 1 to 361. Junk bond funds were little changed & Treasuries had more selling driving yields higher (more below). Oil was up pennies to 72 & gold recovered 4 to 1964 after recent weakness.
AMJ (Alerian MLP Index tracking fund)
As the US national debt clock ticks, lawmakers spoke about the potential "catastrophic" effects of a default on "so many different markets." "A default on America would constitute a catastrophe for every facet of the American economy, including the housing market," Rep Ritchie Torres said in response to being asked whether defaulting on the debt would be catastrophic for the housing market. "Here in Congress, we're concerned about foreign adversaries like China," the Dem representative continued. "I would submit to you that if we default on the debt limit, we're going to do infinitely more damage to ourselves than a foreign adversary ever could." Yesterday, House Dems signed a discharge petition in the hopes of forcing a vote on a debt ceiling increase. Discharge petitions can force a vote on legislation even if the majority party objects, but a majority of House lawmakers need to sign it. Reps have rejected the idea of a clean debt ceiling increase without preconditions. They passed the Limit, Save, Grow Act, which would lift the borrowing limit by $1.5T while also rolling back key Biden administration initiatives & cutting the federal gov's discretionary levels back to what they were in 2022. Rep Marjorie Taylor Greene warned a debt default will deliver a hit to Americans' savings accounts & retirement plans. "But the real tragedy is that this government, the administration, has put the American people in this position to begin with. The American people shouldn't be forced to be in this much debt and on the verge of default," Greene noted. "That means that Congress, the administration and the government as a whole has been extremely irresponsible with their hard-earned tax dollars." The Treasury, whose partial job is to keep mortgage rates affordable for families, may also experience "some issues" in debt default aftermath, according to Byron Donalds. "This town does not know how to actually manage things financially. They just like to borrow money and keep spending it, but I am concerned," Donalds added. "And so what it's going to require is the president and Senate Democrats to actually do their job, and come up with a strategy for raising our debt ceiling."
Lawmakers sound alarm as US national debt clock ticks: ‘Catastrophic'
Walmart (WMT), a Dow stock & Dividend Aristocrat, raised its sales & profit outlook for the year
saying consumer spending has "remained resilient" after seeing a boost
in its grocery & e-commerce business. "We continue to gain
market share in the grocery category, including with higher income and
younger shoppers," Walmart CEO Doug McMillon said. During the last 3-month period, the nation's largest retailer noticed
a shift in US sales mix from general merchandise to grocery &
health & wellness as consumers prioritize purchases in the face of
persisting inflation. Meanwhile,
the company also saw strong growth in e-commerce, which rose 27% in the
US. Globally, e-commerce sales rose 26%, up from 17% in the previous
qtr. McMillon said the higher mix of sales in the food &
consumables categories negatively affected gross profit due to the fact
that both categories have a lower margin than general merchandise. Still, its operating profit grew 17.3% during the period. Revenue rose 7.6% to $152.3B, topping estimates. WMT
expects that consolidated net sales will be up 3.5%, higher than
the previous guidance of 2.5-3%. The retailer also projects that
per-share results for the year will be $6.10-6.20, up from the
previous range of $5.90-6.05. The stock fell 1.34.
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Walmart raises outlook after boost in grocery, e-commerce sales
The 2-year Treasury yields was higher as investors weighed comments from Federal Reserve officials on the outlook for interest rate policy & assessed the state of the economy. The 2-year Treasury climbed 6 basis points at 4.332% & the yield on the 10-year Treasury rose 5 basis points at 3.705%. Yields & prices have an inverted relationship & one basis point equals 0.01%. Investors looked to remarks from Fed speakers for hints about monetary policy & assessed how that may affect the economy. NY Federal Reserve Pres John Williams said the longer-term trend of interest rates will remain lower, despite raises to curtail inflation. “Importantly, there is no evidence that the era of very low natural rates of interest has ended,” Williams said. Meanwhile, Federal Reserve Governor Michelle Bowman called for a separate 3rd-party study to investigate the failure of Silicon Valley Bank & other regional firms. Yesterday, Dallas Fed Pres Lorie Logan said she did not believe halting interest rate hikes was justified based on recent economic data. She said progress had been made but upcoming economic reports such as fresh employment & inflation figures would be crucial to the Fed’s next rate decision. That echoed the tone of some central bank officials who hinted earlier in the week that more needed to be done to bring inflation closer to the Fed's target range. Others, however, appeared more cautious, including Chicago Fed Pres Austan Goolsbee, who said that the effect of higher rates is not being felt to its full extent yet.
2-year Treasury yield rises as investors assess Fed rate outlook
Investors have a lot of comments to weigh while they try to figure what actions the Fed will be taking next month.Dow Jones Industrials
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