Posts by Gary Hall

Summary Of the Markets Today:

• The Dow closed down 404 points or 1.34%,
• Nasdaq closed down 3.08%,
• S&P 500 down 2.37%,
• WTI crude oil settled at $86 down $3.42,
• USD $113. little changed,
• Gold $1648 down $28.90,
• Bitcoin $19,230 down 0.73% – Session Low 19,154,
• 10-year U.S. Treasury 4.006% up 0.052%
• Baker Hughes Rig Count: U.S. +7 to 769 Canada +1 to 216

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

U.S. import price growth fell to 6.0% year-over-year in September 2022 from 7.8% in August – lead by  lower fuel and nonfuel prices. Price growth for U.S. exports fell to 9.5% in September from 10.7% in August.

Advance estimates of U.S. retail and food services sales for September 2022 was up 8.2% above September 2021 (blue line on graph below). Total sales for the July 2022 through September 2022 period were up 9.2% from the same period a year ago. Unfortunately, when adjusted for inflation – retail sales fell 0.4% year-over-year (red line on graph below).

The total business inventories/sales ratio based on seasonally adjusted data at the end of August 2022 was 1.33. The August 2021 ratio was 1.27. Generally speaking, a rising ratio (like what is happening now) is a sign of a slowing economy – but with all the issues in the supply chain – not sure this normally good indicator is saying anything.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 828 points or 2.83%,
• Nasdaq closed up 2.23%,
• S&P 500 up 2.60%,
• WTI crude oil settled at 89 up $1.78,
• USD $112 down $1,
• Gold $1671 down $6.20,
• Bitcoin $19,140 up 1.71% – Session Low 19,003,
• 10-year U.S. Treasury 3.964% up 0.062%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

As predicted in yesterday’s post, the consumer price index (CPI) came in with growth at 8.2% year-over-year in September 2022. Inflation is far from under control and this allows the Fed to keep boosting the federal funds rate until the economic growth slows to the point inflation begins to fall. The energy sector including fuels and electricity / utilities are leading the charge.

In the week ending October 8, the 4-week moving average of initial unemployment insurance claims was 211,500, an increase of 5,000 from the previous week’s unrevised average of 206,500.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 28 points or 0.10%,
• Nasdaq closed down 0.09%,
• S&P 500 down 0.33%,
• WTI crude oil settled at $87 down $1.57,
• USD $113.31 up $0.01,
• Gold $1682 down $3.80,
• Bitcoin $19,140 up 1.71% – Session Low 19,003,
• 10-year U.S. Treasury 3.898% down 0.041%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The Producer Price Index for final demand increased by 0.4% in September 2022. The index for final demand advanced 8.5% for the 12 months that ended in September. This would suggest that the CPI will come in near 8% (see graph below).

The Federal Reserve released the Minutes of the Federal Open Market Committee which was held on September 20-21, 2022. The bottom line was that the existing policy of aggressively raising the federal funds rate to stop inflation by slowing the economy would continue. Some interesting highlights:

…In discussing potential policy actions at upcoming meetings, participants continued to anticipate that ongoing increases in the target range for the federal funds rate would be appropriate to achieve the Committee’s objectives. 

… Participants observed that inflation remained unacceptably high and well above the Committee’s longer-run goal of 2 percent. Participants commented that recent inflation data generally had come in above expectations and that, correspondingly, inflation was declining more slowly than they had previously been anticipating. Price pressures had remained elevated and had persisted across a broad array of product categories.

… Participants noted that, in keeping with the Committee’s Plans for Reducing the Size of the Federal Reserve’s Balance Sheet, balance sheet runoff had moved up to its maximum planned pace in September and would continue at that pace. They further observed that a significant reduction in the Committee’s holdings of securities was in progress and that this process was contributing to the move to a restrictive policy stance. 

… They noted also that inflation had not yet responded appreciably to policy tightening and that a significant reduction in inflation would likely lag that of aggregate demand. Participants observed that a period of real GDP growth below its trend rate, very likely accompanied by some softening in labor market conditions, was required.

… participants remarked that purposefully moving to a restrictive policy stance in the near term was consistent with risk-management considerations. Many participants emphasized that the cost of taking too little action to bring down inflation likely outweighed the cost of taking too much action. Several participants underlined the need to maintain a restrictive stance for as long as necessary, with a couple of these participants stressing that historical experience demonstrated the danger of prematurely ending periods of tight monetary policy designed to bring down inflation.

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A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 36 points or 0.12%,
• Nasdaq closed down 1.10%,
• S&P 500 down 0.65%,
• WTI crude oil settled at $88 down $2.42,
• USD $113 up $0.06,
• Gold $1673 down $1.50,
• Bitcoin $18,998 down 1.24% – Session Low 18,894,
• 10-year U.S. Treasury 3.931% up 0.046%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 94 points or 0.32%,
• Nasdaq closed down 1.04%,
• S&P 500 down 0.75%,
• WTI crude oil settled at $91 down $2.36,
• USD $113.10 up $0.28,
• Gold $1675 down $34,
• Bitcoin $19,213 down 1.25% – Session Low 19,131,
• 10-year U.S. Treasury 3.888% up 0.064%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 630 points or 2.11%,
• Nasdaq closed down 3.80%,
• S&P 500 down 2.80%,
• WTI crude oil settled at $93 up $3.66,
• USD $112.87 up $0.64,
• Gold $1695 up $1.36
• Bitcoin $19,445 down 2.89% – Session Low 19,364,
• 10-year U.S. Treasury 3.885% up 0.061%
• Baker Hughes Rig Count: U.S. -3 to 762 Canada +2 to 215

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The Bureau of Labor Statistics total nonfarm payroll employment increased by 263,000 in September 2022, and the unemployment rate edged down to 3.5 percent. Notable job gains occurred in leisure and hospitality and in health care. The prime reason the unemployment rate dropped was the civilian workforce was reduced by 59,000 (all while the population increased by 172,000). As you can see from the graph below, the monthly employment gains have been moderating for almost a year.

August 2022 sales of merchant wholesalers were up 0.1% month-over-month and were up 16.1% year-over-year. Total inventories of merchant wholesalers were up 1.3% month-over-month and were up 25.0% year-over-year.
The inventories/sales ratio was 1.31 while the August 2021 ratio was 1.21. Generally speaking, there is no correlation between inventory/sales ratios and recessions except that the ratios spike when a recession is underway.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 347 points or 1.15%,
• Nasdaq closed down 0.68%,
• S&P 500 down 1.03%,
• WTI crude oil settled at $89 up $1.01,
• USD $112.12 up $0.91,
• Gold $1714 up $0.43
• Bitcoin $20,019 down 0.7% – Session Low 19,910,
• 10-year U.S. Treasury 3.820% up 0.61%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

Small business owners reporting labor quality as their top business operating problem remains elevated at 22% in September, according to NFIB’s monthly jobs report. Labor cost reported as the single most important problem to business owners was unchanged at 10%.

In September 2022, the Services PMI registered 56.7%, 0.2 percentage points lower than August’s reading of 56.9%. The Business Activity Index registered 59.1%, a decrease of 1.8 percentage points compared to the reading of 60.9% the previous month. The business activity index correlates better to economic activity. An index value of 50% separates expansion and contraction.

In the week ending October 1, the 4-week moving average for initial unemployment insurance claims was 206,500, an increase of 250 from the previous week’s revised average. This data is saying the economy is relatively stable.

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U.S.-based employers announced 29,989 cuts in September, a 46.4% increase from the 20,485 cuts announced in August. It is 67.6% higher than the 17,898 cuts announced in the same month last year, according to Challenger, Gray & Christmas, Inc.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 42 points or 0.14%,
• Nasdaq closed down 0.25%,
• S&P 500 down 0.20%,
• WTI crude oil settled at $88 up $1.45
• USD $111.06 up $0.86,
• Gold $1717 up $0.75
• Bitcoin $20,209 down 0.7% – Session Low 19,788,
• 10-year U.S. Treasury 3.753% up 0.14%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

The goods and services deficit was $67.4 billion in August 2022, down $3.1 billion from $70.5 billion in July. Yes, the trade deficit has been shrinking because imports have been shrinking whilst exports have remained relatively level (see graph below). Generally a decline in imports is a sign the economy is slowing.

Private sector employment increased by 208,000 jobs in September 2022 according to the September ADP National Employment Report. The biggest gains were in the trade / transportation / utilities sector. The ADP numbers were good this month showing employment remains strong – but historically ADP has not been a good indicator (blue line on graph below) for this Friday’s BLS non-farm private employment (red line on graph below).

Elliott Wave International just released a NEW report that shows you the dangers — and opportunities — unfolding now in key property markets around the world. If you own a home — or are thinking about buying one — you need to read this report. Get it FREE for a limited time at elliottwave.com now ($29 value).

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 825 points or 2.80%,
• Nasdaq closed up 3.34%,
• S&P 500 up 3.06%,
• WTI crude oil settled at $86 up $2.63
• USD $110.44 down $1.23,
• Gold $1725 up $31.60,
• Bitcoin $20,198 up 3.41% – Session Low 19,519,
• 10-year U.S. Treasury 3.635% down 0.02%

*Stock data, cryptocurrency, and commodity prices at the market closing.

Today’s Economic Releases:

Home Price Trends from CoreLogic Through August 2022 showed year-over-year home price appreciation slowed to 13.5% in August, the fourth consecutive month of lower annual growth. Price growth is projected to decelerate to 3.2% by August 2023, with more metro areas now likely to see decreases.

The number of job openings decreased to 10.1 million on the last business day of August Hires and total separations were little changed at 6.3 million and 6.0 million, respectively. Within separations, quits (4.2 million) and layoffs and discharges (1.5 million) were little changed. The bottom line is that job openings are still significantly high, but it appears business in general either is faced with a slowing marketplace or is figuring out how to get by without additional hiring.

New orders for manufactured goods in August 2022, down two consecutive months, were down but virtually unchanged. The unfilled orders-to-shipments ratio was 6.01, down from 6.05 in July. Inventories, down two consecutive months, decreased $1.2 billion or 0.1 percent to $800.2 billion. This followed a virtually unchanged July decrease. The inventories-to-shipments ratio was 1.46, down from 1.47 in July. This data release is indicating manufacturing is pretty much stable.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 765 points or 2.66%,
• Nasdaq closed up 2.27%,
• S&P 500 up 2.59%,
• WTI crude oil settled at $83 up $3.57
• USD $111.85 down $0.25,
• Gold 1701 unchanged,
• Bitcoin $19,547 up 1.45% – Session Low 18,948,
• 10-year U.S. Treasury 3.659% down 0.145%

*Stock data, cryptocurrency, commodity prices as of market close.

Today’s Economic Releases:

Construction spending during August 2022 was down 0.7% month-over-month and up 8.5% year-over-year. During the first eight months of this year, construction spending increased 10.9%. Inflation adjusted construction spending declined 11.7% year-over-year as inflation in this sector exceeds 22% (see graph below)

The September 2022 Manufacturing PMI registered 50.9% which is lower than the 52.8% last month. Any number above 50% represents expansion but this is the lowest since May 2020, when it registered 43.5%. This suggests that this manufacturing sector is barely growing.

A summary of headlines we are reading today: