Posts by Gary Hall

Summary Of the Markets Today:

• The Dow closed up 77 points or 0.23%,
• Nasdaq closed down 0.50%,
• S&P 500 down 0.16%,
• WTI crude oil settled at $88 dup 0.65%,
• USD $106.55 up 0.75%,
• Gold $1774 down 0.87%,
• Bitcoin $22,961 up 1.96% – Session Low 22,485,
• 10-year U.S. Treasury 2.827% up 0.151%
• Baker Hughes Rig Count: U.S. -3 to 764 Canada -1 to 203

Today’s Economic Releases:

The NBER considers indicators including nonfarm payrolls, industrial production, and retail sales, among others, in designating the start and end of U.S. recessions. Today’s July 2022 BLS employment report is showing nonfarm payrolls are far from recession territory with a significant gain in employment.

• The household survey showed an increase of 179,000 whilst the establishment survey says 528,000.
• The employment/population ratio remains on an improvement trend.
• The unemployment rate modestly reduced to 3.5% – but the larger reason for this slight reduction is that the civilian labor force was reduced by 63,000. In all cases, the establishment survey is volatile – and there can be significant changes month-over-month.
• A strong jobs report will allow the Fed to raise the federal funds rate another 75 basis points.

According to the Federal Reserve: “Consumer credit [in June 2022] increased at a seasonally adjusted annual rate of 8.7 percent during the second quarter. Revolving credit increased at an annual rate of 14.6 percent, while nonrevolving credit increased at an annual rate of 6.9 percent. In June, consumer credit increased at an annual rate of 10.5 percent.” Looking at year-over-year growth, credit was up 7.7%.

A summary of headlines we are reading today:

• Russian Refinery Returns To Operations After Drone Strike
• U.S. Drilling Activity Slows As Prices Ease
• AMC plans to issue 517 million shares of preferred stock, under the ticker symbol ‘APE’
• Job Gains & Powell’s Pains Demolish Dovish-Dreams, Spark Market Turmoil This Week
• Firearm Companies Say Packages Shipped With UPS Being Damaged, Disappearing: Reports
• Consumer Credit Surged In June, 2nd Largest Monthly Increase Ever
• Bond Report: Treasury yields surge after blockbuster U.S. July jobs data
• Market Extra: A red-hot July jobs number has traders penciling in another jumbo Fed rate hike

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed down 86 points or 0.26%,
• Nasdaq closed up 0.41%,
• S&P 500 down 0.08%,
• WTI crude oil settled at $88 down 2.90%,
• USD $105.93 down 0.42%,
• Gold $1793 down 0.54%,
• Bitcoin $22,525 down 3.84% – Session Low 22,469,
• 10-year U.S. Treasury 2.663% down 0.085%

Today’s Economic Releases:

Tomorrow the BLS will issue the employment report for July 2022. Small businesses across the country continue to raise wages to keep employees and fill a historically high level of open positions, according to NFIB’s monthly jobs report. Seasonally adjusted, 49% of all owners reported job openings they could not fill in the current period, down one point from June and down two points from May’s 48-year record high. NFIB Chief Economist Bill Dunkelberg says:

Hiring has never been harder for small business owners. The labor shortage remains frustrating for many small business owners as they continue to manage inflation and other economic headwinds. Owners are adjusting business operations where they can to help mitigate lost sales opportunities due to staffing shortages.

The U.S. monthly international trade deficit decreased in June 2022. Exports increased whilst imports decreased. In normal times, slowing imports suggests a slowing economy.

The 4-week moving average of initial unemployment insurance weekly claims increased from the previous week’s revised average – and continues to moderately increase.

U.S.-based employers announced 25,810 cuts in July, a 20.6% decrease from the 32,517 cuts announced in June. It is 36.3% higher than the 18,942 cuts announced in the same month last year, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.

A summary of headlines we are reading today:

• Prices At The Pump Continue To Plunge, But Stronger Demand Could Halt The Trend
• Burger King parent says more customers are redeeming coupons and loyalty rewards
• Nikola’s revenue tops expectations on the delivery of 48 electric trucks
• Restaurant Brands International earnings top estimates, fueled by stronger Tim Hortons, Burger King sales
• Walmart lays off corporate employees after slashing forecast
• Indian investors hunt for value in US stocks amid rate hikes
• From food to fuel: What sparked the transformation in the sugar industry?

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed up 416 points or 1.29%,
• Nasdaq closed up 2.59%,
• S&P 500 up 1.56%,
• WTI crude oil settled at $91 down 3.40%,
• USD $106.39 up 0.04%,
• Gold $1782 down 0.402%,
• Bitcoin $23,431 up 2.23% – Session Low 22,719,
• 10-year U.S. Treasury 2.712% down 0.029%

Today’s Economic Releases:

The Institute for Supply Management (ISM) Services In July 2022 registered 56.7% – higher than the previous month’s 55.3%.

The U.S. Census June 2022 full report on manufacturers’ orders stated “New orders for manufactured goods in June, up thirteen of the last fourteen months, increased $10.8 billion or 2.0 percent“. Unfortunately, this data is not inflation adjusted and the inflation-adjusted data continues to show that manufacturing has been in decline for the last 3 years.

A summary of headlines we are reading today:

• Oil Prices Fall To $90, But Its Not Enough For Biden
• Ford reports big jump in July sales, including for trucks and electric vehicles
• Starbucks earnings beat Wall Street estimates, fueled by U.S. demand for cold drinks
• Explosion In Retail Buying Revealed As Source Of Latest Market Meltup, Tesla Stock Surge
• Crypto: Michael Saylor drops Microstrategy CEO role — Here’s what it means for bitcoin
• Market Extra: This is where emerging-markets guru Mark Mobius sees ‘opportunities’ — and why U.S. stocks haven’t bottomed

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed down 402 points or 1.23%,
• Nasdaq closed down 0.16%,
• S&P 500 down 0.67%,
• WTI crude oil settled at $94 up 0.362%,
• USD $106.20 up 0.10%,
• Gold $1761 up 0.07%,
• Bitcoin $23,001 up 0.10% – Session Low 22,697,
• 10-year U.S. Treasury 2.761 up 1.56%

Today’s Economic Releases:

The CoreLogic Home prices (HPI) increased year-over-year by 18.3% in June 2022 and on a month-over-month basis, home prices increased by 0.6%.  The CoreLogic forecast indicates that home prices will increase on a year-over-year basis by 4.3% from June 2022 to June 2023.

The number of job openings decreased to 10.7 million on the last business day of June 2022. Hires and total separations were little changed at 6.4 million and 5.9 million, respectively. Within separations, quits (4.2 million) and layoffs and discharges (1.3 million) were little changed.

The New York Fed’s Quarterly Report on Household Debt and Credit. The Report shows an increase in total household debt in the second quarter of 2022, increasing by $312 billion (2%) to $16.15 trillion.

The signs from the releases today are of a slowing economy. Remember the 2007 recession was offically recognized one year after it began. If the economy continues to slow, the beginning recession marker would be in 1Q2022.

A summary of headlines we are reading today:

• Gas Shortage Sparks Energy Security Fears In Asia
• Venezuela’s Oil Exports Drop By More than A Third In July
• Mall owners say retailers are still opening stores in spite of recession fears
• Molson Coors stock falls as company cites split in consumer spending on beer
• Ford stock notches its best month since the Great Recession — and keeps rising
• LA County Removes Citizenship Requirements For Government Jobs
• Crypto: Bitcoin has already bottomed, has a fair value of $40,000, says Anthony Scaramucci

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed down 47 points or 0.14%,
• Nasdaq closed down 0.18%,
• S&P 500 down 0.28%,
• WTI crude oil settled at 94 down 4.50%,
• USD $105.43 down 0.47%,
• Gold $1771 down 0.07%,
• Bitcoin $22,988 down 3.78% – Session Low 22,891,
• 10-year U.S. Treasury 2.595% down 0.47%

Today’s Economic Releases:

Construction spending during June 2022 was down 1.1% month-over-month and up 8.3% year-over-year. During the first six months of this year, construction spending is up 10.7% over the same period in 2021. But folks, since there is inflation, construction spending is contracting in 2022 and is down year-over-year – see the red line in the graph below:

According to the Institute of Supply Management, manufacturing activity was little changed in July 2022 – and remains at a level modestly in expansion and remains on an 18-month decline.

A summary of headlines we are reading today:

• Today’s Energy Crisis Spells Disaster For The Global Economy
• Home prices cooled at a record pace in June, according to housing data firm
• Mortgage rates fall sharply after negative GDP report and Fed’s latest hike
• Ford CEO offers more clues about the automaker’s ambitious electric vehicle plans
• “No One Is Positioned For Any Good News:” Record Shorting In Tech Ensures ‘Most Hated Rally’ Will Continue
• Bond Report: Treasury yields fall in choppy trade to start August
• Living With Climate Change: Americans want EV tax incentives. But are they ready to lose gas cars forever?

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed up 316 points or 0.97%,
• Nasdaq closed up 1.88%,
• S&P 500 up 1.42%,
• WTI crude oil settled at $98 up 0.84%,
• USD $105.96 down 0.23%,
• Gold $1763 up 1.33%,
• Bitcoin $23,827 up 0.12% – Session Low 23,485,
• 10-year U.S. Treasury 2.66% down 0.25%
• Baker Hughes Rig Count: U.S. +9 to 767 Canada +9 to 204

Today’s Economic Releases:

Real personal income decreased whilst real personal expenditures grew in June 2022. In overview, there has been little growth in income or expenditures in 2022.

The Chicago Business Barometer slid further in July 2022, extending June’s decline. The indicator fell 3.9-points to 52.1, the lowest level since August 2020.

Job seekers’ relocating for new jobs fell to the lowest level on record in the second quarter, as employers continue to offer remote and hybrid positions to attract talent, and the economy falls into a possible recession. According to Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc.:

When lockdowns took effect in 2020, many workers lost jobs and needed to relocate for new positions, while many others wanted to move or buy property, and sought jobs in their new locations. Others purchased homes or relocated and found remote work. Now, workers want the flexibility of remote work and are seeking jobs that allow them to do it.

The final July 2022 of Michigan Consumer sentiment reading showed little change in consumer sentiment from its historic low in June. The one-year economic outlook fell to its lowest reading since 2009. At the same time, concerns over global factors have eased somewhat.

A summary of headlines we are reading today:

• U.S. Crude Production Sinks In May
• U.S. Drillers Continue To Add Rigs As Crude Prices Rally
• Trucking CEOs expect higher prices, potential disruptions in the second half of the year
• Here are 4 key things to consider if you actually hit the $1.28 billion Mega Millions jackpot
• Dems Set To Push Bill To Ban Congress From Trading Stock
• The US enters ‘technical recession’. But why is Dalal Street rallying?
• Market Snapshot: U.S. stocks pick up steam heading toward the closing bell, S&P 500 on track for best month since November 2020

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed up 332 points or 1.03%,
• Nasdaq closed up 1.08%,
• S&P 500 up 1.21%,
• WTI crude oil settled at $97 down 0.98%,
• USD $106.26 down 0.19%,
• Gold $1755 uo 0.05%,
• Bitcoin $23,864 up 5.02% – Session Low 22,644,
• 10-year U.S. Treasury 2.669% down 0.65%

Today’s Economic Releases:

The 4-week-moving average of initial unemployment insurance claims continues growth – and is at its highest level for 2022.

As expected, real gross domestic product (GDP) declined for the second consecutive quarter in 2Q2022. In the past, two consecutive declines were an automatic recession call – but this criteria has been discarded recently. However, it is safe to say the economy is in a strange place with decreases in private inventory investment, residential fixed investment, federal government spending, state and local government spending, and nonresidential fixed investment. Still, year-over-year GDP growth is 1.6% which is about average for GDP growth seen since the Great Recession (see graph below). My view is that the 3Q2022 will be stronger as it is no longer being compared to the 12%+ GDP growth seen one year ago.

The Kansas City Fed’s manufacturing index remains positive and was little changed in July 2022 – but remains near the lowest levels seen in years.

A summary of headlines we are reading today:

• Gas Levy Could Triple Household Heating Bills In Germany
• Flash Floods Disrupt Operations At Middle Easts Largest Oil Bunkering Hub
• JetBlue won the battle for Spirit. Now it has to win over Biden’s Justice Department
• Comcast shares slide after the cable giant fails to add broadband subscribers for first time ever
• Best Buy cuts its outlook, joining other retailers as inflation pressures shoppers
• Ford beats expectations and raises dividends as the company sells more of its top models
• US economy shrinks again sparking recession fears
• Bond Report: 2-year Treasury leads drop in yields after GDP contraction fuels expectations Fed will slow rate hikes

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed up 436 points or 1.37%,
• Nasdaq closed up 4.06%,
• S&P 500 up 2.61%,
• WTI crude oil settled at 98 up 3.07%,
• USD $106.85 down 0.33%,
• Gold $1734 down 0.03%,
• Bitcoin $22,824 up 9.11% – Session Low 20,855,
• 10-year U.S. Treasury 2.787% up 0.02%

Today’s Economic Releases:

Headlines say new orders for manufactured durable goods in June 2022 increased 1.9% – these numbers are not adjusted for inflation. The good news is that inflation-adjusted durable good has been marginally growing as the inflation-adjusted graph below shows.

The Federal Reserve’s FOMC raised the federal funds rate 75 basis points. This is the fourth rate hike in five months. Their statement reads in part:

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 2-1/4 to 2-1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.

Pending home sales (sales based on contract signings) have now shrunk 20.0% year-over-year. NAR Chief Economist Lawrence Yun says:

Contract signings to buy a home will keep tumbling down as long as mortgage rates keep climbing, as has happened this year to date, There are indications that mortgage rates may be topping or very close to a cyclical high in July. If so, pending contracts should also begin to stabilize.

There was an interesting tidbit in the pending home sales release:

According to NAR, buying a home in June was about 80% more expensive than in June 2019. Nearly a quarter of buyers who purchased a home three years ago would be unable to do so now because they no longer earn the qualifying income to buy a median-priced home today.

A summary of headlines we are reading today:

• Oil Prices Rise Following Fed Rate Hike
• McDonald’s and Chipotle say customers are trading down, visiting less often as inflation hits budgets
• Pending home sales fell 20% in June versus a year earlier as mortgage rates soared
• Mortgage demand declines further, even as interest rates drop a bit
• A Storm Of Indicators Show The US Consumer Is Tapped Out
• US makes huge interest rate rise to tame soaring prices

These and other headlines and news summaries moving the markets today are included below.

Summary Of the Markets Today:

• The Dow closed up 91 points or 0.28%,
• Nasdaq closed down 0.43%,
• S&P 500 up 0.13%,
• WTI crude oil settled at $97 up 1.82%,
• USD $106.45 down 0.11%,
• Gold $1718 up 1.85%,
• Bitcoin $21,803 down 4.22% – Session Low 21,606,
• 10-year U.S. Treasury 2.796 unchanged

Today’s Economic Releases:

The three-month moving average of the Chicago Fed National Activity Index moved marginally into negative territory in June 2022.  This is not indicative of a recession as the values are explained as follows:

A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth; negative values with below-average growth (in standard deviation units); and positive values with above-average growth. Periods of economic expansion have historically been associated with values of the CFNAI-MA3 above –0.70 and the CFNAI Diffusion Index above –0.35.

The point is that the three-month moving average has to fall to a value of -0.70 [this month the value is -0.04] before a recession occurs. The CFNAI is considered the best coincident indicator of the economy.

The Texas Manufacturing Outlook Survey for July 2022 was largely unchanged at 3.8, a reading well below average but still indicative of growth.

A summary of headlines we are reading today:

• Brent-WTI Spread Widens To Over $8 As U.S. Gasoline Demand Slows
• OPEC+ Is Now 2.84 Million Bpd Below Its Oil Production Target
• GM trails far behind Tesla in EV sales — CEO Mary Barra bet the company that will change
• The Mega Millions jackpot is now $810 million. Here’s how much would go to taxes if there’s a winner
• Fear prevents workers reporting low pay – report
• The Fed: Four things you will want to listen for at Wednesday’s Federal Reserve meeting

These and other headlines and news summaries moving the markets today are included below.