Markets edge higher as investors await Fed’s Jackson Hole conference

Dow went up 189, advancers over decliners 3-1 & NAZ gained 54.  The MLP index added 2+ to the 285s & the REIT index was up 2+ to the 213s.  Junk bond funds hardly budged & Treasuries had a little buying which reduced yields slightly (more below).  Oil slid lower in the 76s & gold crawled up 3 to 2540.

Dow Jones Industrials

General Motors (GM) is laying off more than 1000 salaried employees globally in its software & services division following a review to streamline the unit’s operations.  The layoffs, including roughly 600 jobs at GM’s tech campus near Detroit, come less than 6 months after leadership changes overseeing the operations, including former Apple (AAPL) exec Mike Abbott leaving the automaker after less than a year in Mar due to health reasons.  “As we build GM’s future, we must simplify for speed and excellence, make bold choices, and prioritize the investments that will have the greatest impact,” a GM spokesman said.  “As a result, we’re reducing certain teams within the Software and Services organization. We are grateful to those who helped establish a strong foundation that positions GM to lead moving forward.”  The layoffs represent about 1.3% of the company’s global salaried workforce of 76K as of the end of last year.  That included about 53K US salaried employees.  The cuts come as automakers attempt to reduce costs &, in many instances, employee headcount amid fears of an industry downturn, & as they're spending Bs of $s on emerging markets such as all-electric vehicles & so-called software-defined vehicles.  The stock went up 3¢.

GM lays off more than 1,000 salaried software and services employees

Whoever wins the White House in Nov will need to put 3 policy items at the top of the "To Do" list, according to the nation’'top economists.  "A majority of panelists identifies budget deficits and immigration reform as the top two policy issues facing the next administration," said National Association for Business Economics (NABE) Pres Ellen Zentner, chief economic strategist & global head of thematic & macro investing for Morgan Stanley Wealth Management.  NABE's Aug survey also listed the overall economy as the 3rd priority.  59% of participants listed budget deficits as the #1 issue.  The US borrowed over $1.5T over the first 10 months of the fiscal 2024 year, including more than $240B last month, according to the Congressional Budget Office's Monthly Budget Review.  Maya MacGuineas, pres of the Committee for a Responsible Federal Budget, urged the next pres not to waste time in confronting these issues.  "Our fiscal trajectory cannot be left on autopilot – the stakes are far too high and the consequences far too steep to leave our national debt climbing in perpetuity," she warned.  The national debt, which measures what the US owes its creditors — stands at over $35T thru last week, according to the Treasury Dept.  4 decades ago, it averaged just over $900B.  "Considering the sheer size of the challenges we already face – interest costs on course to exceed our defense and Medicare budgets, deficits barreling toward $2 trillion, and no plan in the works to turn things around – how can we afford to sit idle any longer?" she added.  On Fri , VP Kamala Harris unveiled her economic plan coined "Agenda to Lower Costs for American Families."  The broad plan included $25K for first-time homebuyers, multiple housing affordability measures & an expansion of the Child Tax Credit & Earned Income Tax Credit, among other initiatives.  Following the release, the Committee for a Responsible Federal Budget (CRFB) found that these plans would increase federal budget deficits by $1.7T over the next decade.

U.S. economists list top election issues: NABE

Treasury yields were little changed, with the release of Federal Reserve meeting minutes & the closely watched central bank symposium at Jackson Hole on the agenda this week.  The yield on the 10-year Treasury slid nearly 2 basis points lower to 3.877% & the 2-year Treasury yield was near flat at 4.062%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  Investors are still digesting last week's release of US retail sales figures for Jul & weekly initial jobless claims, which were both better than expected.  The figures helped ease recent concerns about the health of the US economy, boosting global stock markets.  Markets continue to fully price in a Fed rate cut in Sep, though they have slashed the odds of a 50 basis point reduction to just 26.5%, according to CME Group's FedWatch tool.  Looking ahead, investors will monitor the release of minutes from the Fed's Jul meeting minutes on Wed.  That comes ahead of the Jackson Hole symposium, which kicks off on Thurs.  Fed Chair Jerome Powell will deliver a speech Fri at the annual event, which attracts economists, monetary policymakers & academics from around the world.

Treasury yields dip ahead of Fed minutes and Jackson Hole

Stocks were broadly steady after posting their best week in a year as investors began counting down to a speech by Fed Chair Jerome Powell at Jackson Hole that could reset rate cut expectations.  Calm returned to a market previously whipsawed by worries about a potential recession.  Last week's rally recouped the losses stacked up in an early Aug sell-off as investors fretted about cracks in the economy, concerns that have since been eased by encouraging inflation & consumer spending data.