Posts by Gary Hall

Summary Of the Markets Today:

• The Dow closed down 292 points or 0.86%,
• Nasdaq closed down 2.01%,
• S&P 500 down 1.29%,
• WTI crude oil settled at 90 down 4.08% for the week%,
• USD $108.12 up 0.58%,
• Gold $1760 down 0.62%,
• Bitcoin $21,374 down 8.58% – Session Low 21,246,
• 10-year U.S. Treasury 2.978 up 0.0987
• Baker Hughes Rig Count: U.S. -1 to 762 Canada unchanged at 201

Today’s Economic Releases:

The Ports of Los Angeles and Long Beach remain the best real-time indicator of imports and exports from the U.S. On a rolling 12-month basis, inbound traffic increased 0.5% in July compared to the rolling 12 months ending in June.   Outbound traffic increased 0.1% compared to the rolling 12 months ending the previous month. The bottom line here is that the economy seems to be treading water at this time with no significant movement upward or downward.

Summary Of the Markets Today:

• The Dow closed up 19 points or 0.06%,
• Nasdaq closed up 0.21%,
• S&P 500 up 0.23%,
• WTI crude oil settled at $91 up 2.85%,
• USD index $107.47 up 0.84%,
• Gold $1773 down 0.02%,
• Bitcoin $23,371 up 0.13%,
• 10-year U.S. Treasury 2.875%  little changed

Today’s Economic Releases:

The Philadelphia Fed Manufacturing Index returned to positive territory in August 2022 after two consecutive negative readings, rising 19 points to 6.2 (see Chart below). Most firms (47 percent) reported no change in current activity this month, while the share of firms reporting increases (26 percent) exceeded the share reporting decreases (20 percent). As this is a survey, one would need months of data to begin to believe the economy is improving.

In the week ending August 13, 2022, the seasonally adjusted initial claims 4 week moving average was 246,750, a decrease of 2,750 from the previous week’s revised average. This was the first time in 4 months that the moving average declined,

Existing-home sales fell for the sixth consecutive month and were down 5.9% from June and 20.2% year-over-year. The median existing-home sales price climbed 10.8% from one year ago to $403,800. That’s down $10,000 from last month’s record high of $413,800.

Summary Of the Markets Today:

• The Dow closed down 172 points or 0.50%,
• Nasdaq closed down 1.25%,
• S&P 500 down 0.72%,
• WTI crude oil settled at $88 up 1.63%,
• USD $106.65 up 0.14%,
• Gold $1778 down 0.63%,
• Bitcoin $23,391 down 1.96%,
• 10-year U.S. Treasury 2.9%  little changed

Today’s Economic Releases:

According to the US Census release, advance estimates of retail and food services sales for July 2022, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were virtually unchanged from the previous month, but 10.3 percent (±0.7 percent) above July 2021. But when adjusted for inflation (red line on graph below), retail/food services have been in contraction year-over-year since March 2022.

Manufacturers and trade inventories for June, adjusted for seasonal and trading day differences but not for price changes, were estimated at an end-of-month level of $2,419.5 billion, up 1.4 percent (±0.1 percent) from May 2022 and were up 18.5 percent (±0.5 percent) from June 2021 – their numbers are not inflation adjusted. However, inventory/sales ratios do not need inflation adjustments and the total business inventories/sales ratio was 1.30. The June 2021 ratio was 1.26. This implies that inventory levels are modestly rising but within levels seen at times of economic expansion.

Today, the Federal Reserve released the minutes for the July 26/27 meeting of the Federal Open Market Committee and the Board of Governors of the Federal Reserve System. We saw no clues in these minutes on the size of the next federal funds rate increase. Highlights include:

• Participants noted that consumer expenditures, housing activity, business investment, and manufacturing production had all decelerated from the robust rates of growth seen in 2021. The labor market, however, remained strong.
• Participants anticipated that U.S. real GDP would expand in the second half of the year, but many expected that growth in economic activity would be at a below-trend pace, as the period ahead would likely see the response of aggregate demand to tighter financial conditions become stronger and more broad-based. Participants noted that a period of below-trend GDP growth would help reduce inflationary pressures and set the stage for the sustained achievement of the Committee’s objectives of maximum employment and price stability.
• Participants noted that indicators of spending and production pointed to less underlying strength in economic activity than was suggested by indicators of labor market activity. With employment growth still strong, the weakening in spending data implied unusually large negative readings on labor productivity growth for the year so far. Participants remarked that the strength of the labor market suggested that economic activity may be stronger than implied by the current GDP data, with several participants raising the possibility that the discrepancy might ultimately be resolved by GDP being revised upward
• Participants remarked that, although recent declines in gasoline prices would likely help produce lower headline inflation rates in the short term, declines in the prices of oil and some other commodities could not be relied on as providing a basis for sustained lower inflation, as these prices could quickly rebound.
• Participants judged that, as the stance of monetary policy tightened further, it likely would become appropriate at some point to slow the pace of policy rate increases while assessing the effects of cumulative policy adjustments on economic activity and inflation. Some participants indicated that, once the policy rate had reached a sufficiently restrictive level, it likely would be appropriate to maintain that level for some time to ensure that inflation was firmly on a path back to 2 percent.

Summary Of the Markets Today:

• The Dow closed down 172 points or 0.50%,
• Nasdaq closed down 1.25%,
• S&P 500 down 0.72%,
• WTI crude oil settled at 88 down 10.25% for the week%,
• USD $106.59 up 0.11%,
• Gold 1781 down 0.46%,
• Bitcoin $23,294 down 2.68% – Session Low 23,263,
• 10-year U.S. Treasury 2.893 up 0.069%

Today’s Economic Releases:

 

A summary of headlines we are reading today:

• How The EU Plans To Cut Natural Gas Consumption By 15%
• Gulf of Mexico Oil Leases Up in the Air Amid Another Court Ruling
• Target’s earnings take a huge hit as retailer sells off unwanted inventory
• Mortgage demand fell last week even as rates declined slightly
• Best Buy to sell over-the-counter hearing devices this fall following change in FDA regulation
• Stocks making the biggest moves midday: Bed Bath & Beyond, Krispy Kreme, Target and more
• Homebuyers are backing out of more deals as high mortgage rates persist and recession fears linger
• Ford Hikes Price Of EV F-150 Up To $8,500, More Than Biden’s “Inflation Reduction” Subsidy
• FOMC Minutes: Anticipation For “Rate Increases” But Risk Fed Could Tighten “More Than Necessary”; Financial Conditions Already “Tightened Notably”
• MemeMoney: Bed Bath & Beyond shares continue to skyrocket; ‘This isn’t about rationality’

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

Summary Of the Markets Today:

• The Dow closed up 151 points or 0.45%,
• Nasdaq closed up 0.62%,
• S&P 500 up 0.40%,
• WTI crude oil settled at $89 down 3.25%,
• USD $106.53 up 0.82%,
• Gold $1778 down 0.45%,
• Bitcoin $23,996 down 1.24% – Session Low 23,937,
• 10-year U.S. Treasury 2.802% down 0.047%

Today’s Economic Releases:

Business activity declined sharply in the August 2022 Empire State Manufacturing Survey. The headline general business conditions index plummeted forty-two points to -31.3. This is definitely a sign of a slowing economy, but one terrible month of data does not a recession make.

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A summary of headlines we are reading today:

• What Does Chinas Dismal Economic Report Mean For Commodities?
• Walmart strikes exclusive streaming deal to give Paramount+ to Walmart+ subscribers
• Stores and suppliers clash over price hikes as shoppers hit by sticker shock
• Homebuilders say the U.S. is in a ‘housing recession’ as sentiment turns negative
• Investors flock to green energy funds as Congress passes climate bill. What to know as assets reach ‘new territory’
• U.S. freight shipping rates have likely peaked, according to new Cass Freight Index data, in another sign that inflation is easing
• The “Big Short” Michael Burry Liquidates Entire Portfolio, Holds Just One Stock At End Of Q2
• Futures Movers: Oil settles with a 3% loss as China growth worries dominate

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

Summary Of the Markets Today:

• The Dow closed up 424 points or 1.27%,
• Nasdaq closed up 2.09%,
• S&P 500 up 1.73%,
• WTI crude oil settled at $92 down 2.53%,
• USD $105.64 up 0.52%,
• Gold $1801 down 0.05%,
• Bitcoin $24,165 up 0.17% – Session Low 23,654,
• 10-year U.S. Treasury 2.838% down 0.05%
• Baker Hughes Rig Count: U.S. -1 to 763 Canada -2 to 201

Today’s Economic Releases:

Following along the path of the Consumer Price Index and the Producer Price Index, Import and Export Price growth slowed in July 2022. U.S. import prices moderated from 10.7% year-over-year to 8.8%. Export prices moderated from 18.1% year-over-year to 13.1%. Import prices are what affect the average consumer but there is no correlation between import price inflation and economic growth.

The U.S. economy looks weaker now than it did three months ago, according to 35 forecasters surveyed by the Federal Reserve Bank of Philadelphia.

	REAL GDP (%)		UNEMPLOYMENT RATE (%)		PAYROLLS (000S/MONTH)
	PREVIOUS	NEW	PREVIOUS	NEW	PREVIOUS	NEW
Quarterly data:
2022:Q3	2.5	1.4	3.5	3.5	293.7	342.5
2022:Q4	2.3	1.2	3.5	3.7	193.2	167.9
2023:Q1	2.1	1.1	3.5	3.8	158.8	89.0
2023:Q2	2.3	1.5	3.5	3.9	61.3	96.6
2023:Q3	N.A.	1.5	N.A.	4.0	N.A.	80.7

Preliminary University of Michigan consumer sentiment moved up very slightly this month to about 5 index points above the all-time low reached in June. All components of the expectations index improved this month, particularly among low and middle-income consumers for whom inflation is particularly salient.

	Aug	Jul	Aug	M-M	Y-Y
	2022	2022	2021	Change	Change
Index of Consumer Sentiment	55.1	51.5	70.3	+7.0%	-21.6%
Current Economic Conditions	55.5	58.1	78.5	-4.5%	-29.3%
Index of Consumer Expectations	54.9	47.3	65.1	+16.1%	-15.7%

A summary of headlines we are reading today:

• Oil Prices Fall As Demand Concerns Persist
• Gulf Of Mexico Pipelines Could Restart Today
• Even airline employees are having trouble finding a seat home from Europe this summer
• Best Buy cuts jobs across the country, after warning of slower sales
• Texas Joins 18 States To Oppose Blackrock’s Woke Agenda
• Pension Funds Suffer Worst Year Since 2009
• Market Extra: Stock buybacks near $800 billion this year after hitting all-time record
• Bond Report: Treasury yields end higher for a second straight week after U.S. consumer-sentiment data

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

Summary Of the Markets Today:

• The Dow closed down 27 points or 0.08%,
• Nasdaq closed down 0.58%,
• S&P 500 down 0.07%,
• WTI crude oil settled at $94 up 2.25%,
• USD $104.82 down 1.39%,
• Gold $1801 down 0.68%,
• Bitcoin $24,211 up 2.34% – Session Low 23,656,
• 10-year U.S. Treasury 2.893% up 1.12%

Today’s Economic Releases:

In the week ending August 6, the advance figure for seasonally adjusted initial claims grew 14,000 from the previous week’s revised level, and the 4 week moving average increased 4,500 from the previous week’s revised average.

The Producer Price Index final demand prices moved up 9.8 percent for the 12 months ended in July 2022. Producer prices are a measure of inflation from the perspective of producers whilst the Consumer Price Index measures inflation from the standpoint of consumers. The bottom line is both the CPI and PPI moderated in July – and going forward, the year-over-year growth will be measured against a period where inflation was growing. Therefore, it is easy to speculate that inflation will continue to moderate.

A summary of headlines we are reading today:

• Shell Halts Oil Output At Three Gulf Of Mexico Platforms
• Disney is raising prices, but this time, don’t blame inflation
• U.S. Postal Service to temporarily hike prices for the holiday season
• Justice Department seeks to unseal Trump raid search warrant, Attorney General Garland says
• Ethereum Soars To 2-Month High As Critical Test Passed, Merge Set For Sept 15
• The US Labor Market Is A House Of Cards – Here Are The Reasons Why
• Semiconductor companies have split into two groups — the resilient and the risky
• Bond Report: Ten-year Treasury yield rises to the highest level in three weeks despite signs of cooler inflation

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

Summary Of the Markets Today:

• The Dow closed up 535 points or 1.63%,
• Nasdaq closed up 2.89%,
• S&P 500 up 2.13%,
• WTI crude oil settled at $91 up 0.998%,
• USD $104.82 down 1.39%,
• Gold $1806 down 0.34%,
• Bitcoin $23,674 up 2.49% – Session Low 22,750,
• 10-year U.S. Treasury 2.786% down 0.11%

Today’s Economic Releases:

The Consumer Price Index for All Urban Consumers (CPI-U) increased 8.5 percent year-over-year before seasonal adjustment – in June 2022 the index had increased 9.0 percent year-over-year. Over the gasoline component of the index moderated whilst food and shelter increased. Depending on how one spends their money, this 8.5 percent increase may be significantly higher. Although inflation did modestly moderate in July, it is still significant and likely puts on the table another 75 basis point increase in the federal funds rate during the September 20/21 Fed meeting.

June 2022 sales of merchant wholesalers, up 1.8 percent month-over-month and 20.4 percent year-over-year. Inventories of merchant wholesalers were up 1.8 percent month-over-month and up 25.5 percent year-over-year. The June inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.26. The June 2021 ratio was 1.21. Generally, the sales-to-inventory ratios spike during a recession.

The number of CEO changes at U.S. companies plunged to 58 in July, down 45% from the 106 CEO exits recorded in June. It is the lowest monthly total since April 2020, when the uncertainty and economic turmoil caused by the pandemic led to 48 CEO exits in that month. Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc. stated:

The economy is facing uncertainty right now, but it’s much more positive than in early 2020. Inflation fell in July, gas prices are falling steadily, the job market remains tight, and supply chain issues have mostly cleared up. Consumers lack confidence at the moment and interest rates are rising to battle inflation, which might slow business borrowing and some growth plans.

The U.S. Treasury’s Monthly Treasury Statement shows the fiscal-year-to-date deficit is $726 billion, a record year-over-year decrease of $1.814 trillion (71%), for the first ten months of the fiscal year. Fiscal-year-to-date Receipts were $787 billion (24%) higher, while Outlays were lower by $1.027 trillion (18%). July has been a deficit month 66 times out of 68 fiscal years since there are usually no major corporate or individual tax due dates in this month.

 

A summary of headlines we are reading today:

• Is U.S. Inflation Actually Cooling Quicker Than Expected?
• Chip Shortages And Inflation Are Plaguing The Auto Industry
• How the EV tax credits in Democrats’ climate bill could hurt electric vehicle sales
• Business travel costs are expected to rise through 2023, industry report says
• Russian Spy Planes Enter Alaska Air Defense Zone In 1st Since Ukraine War: NORAD
• Key Words: No shrinkflation at Kellogg, CEO says. ‘If we make it smaller, we also make it cheaper’
• Bond Report: 2-year Treasury yield slides by most in almost a week after U.S. inflation data bring downside surprises

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

Summary Of the Markets Today:

• The Dow closed down 58 points or 0.18%,
• Nasdaq closed down 1.19%,
• S&P 500 down 0.42%,
• WTI crude oil settled at 91 down 0.2%,
• USD $106.36 down 0.01%,
• Gold 1811 up 0.33%,
• Bitcoin $23,123 down 3.51% – Session Low 22,940,
• 10-year U.S. Treasury 2.781 up 0.18%

Today’s Economic Releases:

NFIB’s Small Business Optimism Index rose 0.4 points in July to 89.9, however, it is the sixth consecutive month below the 48-year average of 98. Thirty-seven percent of small business owners reported that inflation was their single most important problem in operating their business, an increase of three points from June and the highest level since the fourth quarter of 1979. Bill Dunkelberg, NFIB Chief Economist stated:

The uncertainty in the small business sector is climbing again as owners continue to manage historic inflation, labor shortages, and supply chain disruptions. As we move into the second half of 2022, owners will continue to manage their businesses into a very uncertain future.

Nonfarm business sector labor productivity decreased 4.6 percent in the second quarter of 2022. From the same quarter a year ago, nonfarm business sector labor productivity decreased 2.5 percent, reflecting a 1.5-percent increase in output and a 4.1-percent increase in hours worked. The 2.5-percent decline in labor productivity from the same quarter a year ago is the largest decline in this series, which begins in the first quarter of 1948. Unit labor costs in the nonfarm business sector increased 10.8 percent in the second quarter of 2022, This is the largest four-quarter increase in this measure since a 10.6-percent increase in the first quarter of 1982.

In May 2022, 2.7% of mortgages were delinquent by at least 30 days or more including those in foreclosure. This represents a 2-percentage point decrease in the overall delinquency rate compared with May 2021.

A summary of headlines we are reading today:

• EIA Lowers U.S. Oil Production Forecast
• An Iran Nuclear Deal Could Send Oil Prices Tumbling Towards $80
• Germany May Consider Lifting Its Ban On Fracking Amid Energy Crisis
• Copper Prices Slide Sideways As Bulls And Bears Battle It Out
• Northrop Grumman moves Antares rocket work to U.S. from Russia and Ukraine with Firefly partnership
• Inflation Reduction Act extends ‘pass-through’ tax break limits for 2 more years. Here’s what that means for entrepreneurs
• With 87,000 new agents, here’s who the IRS may target for audits

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