Dow dropped 289, decliners over advancers about 3-1& NAZ pulled back 157. The MLP index fell 2+ to 245 & the REIT index felll 4+ to the 339s & is down a hefty 50 from its early Aug level while interest rates were climbing. Junk bond funds slid lower & Treasuries had limited selling with yields little changed. Oil went over 90 again & gold was off 14 to 1921.
AMJ (Alerian MLP Index tracking fund)
JPMorgan Chase CEO Jamie Dimon is warning that interest rates could go up quite a bit further as policymakers face the prospects of elevated inflation & slow growth. Though Federal Reserve officials have indicated that they are near the end of their rate-hiking cycle, the head of the largest US. bank by assets said that may not necessarily be the case. Dimon said that the Fed's key borrowing rate could rise significantly from its current targeted 5.25-5.50%. He said that when the Fed raised the rate from near-zero to 2%, it was “almost no move,” while the increase from there to the current range merely “caught some people off guard.” “I am not sure if the world is prepared for 7%,” he added. “I ask people in business, ‘Are you prepared for something like 7%?’ The worst case is 7% with stagflation. If they are going to have lower volumes & higher rates, there will be stress in the system. We urge our clients to be prepared for that kind of stress.” To emphasize the point, Dimon referenced Warren Buffett's much-cited quote, “Only when the tide goes out do you discover who’s been swimming naked.” “That will be the tide going out,” he said about the rate surge. “These 200 [basis points] will be more painful than the 3% to 5%” move. The comments come less than a week after Fed officials, in their quarterly economic update, indicated that they could approve another qtr percentage point increase by the end of the year before beginning to cut a few times in 2024. However, that's predicated on the data continuing to cooperate. Fed Chair Jerome Powell said the central bank won't hesitate to raise rates, or at least keep them at elevated levels, if it doesn't feel like inflation is on a sustained trajectory lower, a higher-for-longer reality with which markets are grappling. “I would be cautious,” Dimon said. “We have to deal with all these serious issues over time, and your deficits can’t continue forever. So rates may go up more. But I hope and pray there is a soft landing.” Treasury yields have been on the rise since last week's Fed meeting, with the 10-year note hovering around 16-year highs.
Dimon warns that the Fed could still raise interest rates sharply from here
Americans' income plunged as the nation grappled with record-high inflation, according to new data from the Census Bureau. Real
median household income declined from $76,330 in 2021 to $74,580 in
2022, a 2.3% drop. That marked the 3ird straight year of decline since
the onset of the COVID-19 pandemic in 2020. But even as incomes fall, inflation continued to rise
across the US. Inflation spiked 7.8% between 2021 & 2022,
representing the largest annual increase in the cost-of-living
adjustment (COLA) since 1981. And
while inflation & income declines affect Americans across generations,
it impacts specific age groups differently. Those with ages of
45-54 faced the deepest cuts to median income, losing 3.0% annually in 2022. Income for those 65 years & older declined 2.1%. To
make ends meet, many Americans have turned to gov assistance. The Supplemental Poverty Measure (SPM) rate, which accounts for
gov benefits, stood at 12.4% in 2022, an increase of 4.6
percentage points from 2021. This marked the first increase in the SPM
since 2010. The Census Bureau attributes this trend to federal tax
policy changes including the expiration of temporary expansions to the
Child Tax Credit (CTC) & the Earned Income Tax Credit (EITC), as well
as the end of pandemic-era stimulus payments.
Household income drops amid high inflation
Automaker Ford (F) that it would pause construction of a billion-dollar plant in Michigan involving a Chinese electric vehicle battery company. Ford said that work on the factory had been paused & spending would be limited,
but declined to pinpoint the exact considerations that factored into
the decision. The company also said it hadn't made a final
decision about the project despite repeatedly defending it for months. "We’re
pausing work and limiting spending on construction on the Marshall
project until we’re confident about our ability to competitively operate
the plant," Ford spokesperson TD Reid said. "We haven’t
made any final decision about the planned investment there." Ford
announced earlier this year that it would invest $3.5B to build the plant in Marshall, Michigan. As part of the
announcement, the automaker said it had reached an agreement with
Contemporary Amperex Technology (CATL), a Ningde, China-based firm, to
manufacture battery cells at the plant using services provided by the
Chinese company. While Dems including Michigan Gov. Gretchen Whitmer
applauded Ford's announcement, since it was unveiled in Feb,
Reps & national security experts have blasted the company for
teaming up with a Chinese firm with ties to the Chinese Communist Party
on such a major investment. The stock fell 6¢.
If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F_aid=CD3289&a_bid=6aeoso5b6f7
Major US automaker backtracks on CCP-tied EV factory in sudden reversal
Since the start of Aug, Dow is down more than 1000. As long as high interest rates continue, the bulls will remain in hiding.
Dow Jones Industrials
No comments:
Post a Comment