Markets ease higher as US GDP data lifts expectations

Dow was up 213, advancers over decliners 2-1 & NAZ gained 35.  The MLP index fell 2+ to the 285s & the REIT index slid back 1 to the 438s.  Junk bond funds were mixed & Treasuries had more selling, driving yields higher (more below).  Oil dropped 1+ to the high 68s (more below) & gold crawled up 3 to 2688.

Dow Jones Industrials

The US economy grew at a 3% annual rate in the 2nd qtr, in line with expectations, according to new data from the Commerce Dept's Bureau of Economic Analysis.  The forecast projected an annual growth rate of 3% in the 2nd qtr, after the 2nd advance read came in at 2.8% in Jul.  The report also revised first-qtr GDP growth to 1.6%, up from 1.4% in the prior reading.  That comes after the economy grew 3.4% in the 4th qtr of 2023.

US economy grew 3% in the second quarter, in line with expectation

US crude oil prices fell nearly 3% on a report that Saudi Arabia is committed to pressing ahead with production increases later this year.  Saudi is prepared to ditch its unofficial oil price target of $100 per barrel, people familiar with the kingdom's thinking said.  Saudi officials are ready to increase oil production in Dec even if the move results in a prolonged period of low oil prices.  West Texas Intermediate Nov contract was $68.15 per barrel, down $1.54 (2.2%) & YTD, US crude oil is down about 5%.  Brent Nov contract was $71.86 per barrel, down $1.60 (2.2%) & YTD, the global benchmark is down nearly 7%.  Prices are also under pressure on the expectation that oil production will rise in Libya.  Factions in the North African country reached a deal yesterday to appoint a new central bank governor.  A political dispute over who should lead the bank has led to production disruptions.  The prospect of rising production is set against a backdrop of soft demand in China, the world's largest crude importer & 2nd-largest consumer.  Oil prices rallied earlier in the week after Beijing announced a new stimulus package.

U.S. crude oil falls nearly 3%, trades below $68 on report Saudi committed to production increase

Treasury yields were higher as investors looked to fresh economic data & remarks from Federal Reserve officials.  The yield on the 10-year Treasury was up by 3.4 basis points at 3.815% & the 2-year Treasury yield was last at 3.61%, after rising by 5.7 basis points.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  After the Federal Reserve cut interest rates by 50 basis points earlier this month, investor attention has shifted back to the state of the US economy & whether a slowdown or downturn is on the horizon.  Investors received encouraging economic data today that supported the view that the central bank's decision to cut interest rates isn't in response to a weakening economy.  Weekly jobless claims pulled back more than expected for last, indicating a still-churning labor market.  Durable goods orders for Aug were unchanged while economists forecast a decline.  The final reading of 2nd-qtr GDP was unrevised at 3%, respectively.  A series of Fed policymakers including central bank Chair Jerome Powell are set to give remarks, which investors will be parsing thru for hints about their expectations for the economy.  Elsewhere, the Swiss National Bank cut its key interest rate by a qtr point, marking the 3rd reduction this year.

Treasury yields steady as investors look to economic data, Fed speaker comments

Investors welcomed a slew of updates, including solid US economic data & China's pledges of more stimulus, while they waited to hear from Jerome Powell.  Helping the upbeat mood were growing expectations for another jumbo interest rate cut from the Federal Reserve.  Traders are pricing in 60% odds of a 0.5% move at its Nov meeting, versus 40% a week ago.