markets

• The Dow closed up 410 points or 0.97%, (Closed at 42,864, New Historic high 42,900)
• Nasdaq closed up 61 points or 0.33%,
• S&P 500 closed up 35 points or 0.61%, (Closed at 5,815, New Historic high 5,822)
• Gold $2,673 up $34.20 or 1.28%,
• WTI crude oil settled at $76 down $0.27 or 0.34%,
• 10-year U.S. Treasury 4.088 up 0.006 points or 0.051%,
• USD index $102.94 down $0.05 or 0.05%,
• Bitcoin $62,955 up $2,696 or 4.49%,
• Baker Hughes Rig Count: U.S. +1 to 586 Canada -4 to 219
  U.S. Rig Count is up 1 from last week to 586 with oil rigs up 2 to 481, gas rigs down 1 to 101 and miscellaneous rigs unchanged at 4.

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

Today’s Highlights

JPMorgan Chase and other major U.S. banks kicked off the Q3 2024 earnings season on Friday, helping push the Dow Jones Industrial Average and S&P 500 to new record highs. The Dow rose to a new all-time high. The S&P 500 closed above 5,800 for the first time. All three major indexes finished the week with gains of over 1%. JPMorgan Chase reported better-than-expected Q3 results, with earnings of $4.37 per share beating estimates of $4.021. The bank’s revenue grew to $42.65 billion, surpassing analyst expectations of $40.85 billion. JPMorgan’s shares rose nearly 5% following the earnings release. Wells Fargo also reported strong Q3 results, contributing to the positive sentiment in the financial sector. Investors are weighing recent economic data and its potential impact on Federal Reserve policy: A hot inflation print earlier in the week raised questions about the Fed’s next moves. Wholesale inflation remained unchanged, adding to the complex economic picture. The market is closely watching for signs of how the Fed’s potential rate cuts might affect bank lending margins and profits. Earnings season will continue next week with reports from major companies like Citigroup, United Airlines, ASML, Netflix, and American Express. Investors will be focusing on company forecasts and any early indications of improvement given the lower rate environment.

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Click here to read our current Economic Forecast – October 2024 Economic Forecast: One More Recession Flag Removed Yet Little Headway On Inflation

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Today’s Economic Releases Compiled by Steven Hansen, Publisher:

The Producer Price Index (PPI) declined from 1.9% year-over-year to 1.8% year-over-year. The good news is that there is now disinflation in goods production but growing inflation in services. I cannot believe the spin on this data. Some say the Consumer Price Index (CPI) came in hot but the PPI came in supporting the notion that inflation was moderating. Folks, the opposite is true. To get a handle of the underlying pressures on an inflation index is to remove food and energy. For the CPI,  if food and energy are excluded inflation remains little changed at 3.3% year-over-year. For the PPI, if food and energy are excluded inflation increased from 2.7% year-over-year to 2.8% (see red line on graph below). Everywhere I look – there are inflationary pressures present.

The University of Michigan’s consumer sentiment index decreased from 70.1 in September to 68.9 in October, a drop of 1.2 points. Despite the minor dip, consumer sentiment remains 8% higher than a year ago and nearly 40% above its lowest point in June 2022. This indicates a general trend of improvement in consumer outlook over the past year. Consumers continue to express frustration over high prices, even though inflation expectations have eased significantly since June 2022. The year-ahead inflation expectation rose slightly to 2.9% in October from 2.7% in September.

Here is a summary of headlines we are reading today:

• U.S. Oil Drilling Activity Inches Up
• Tripling Renewable Energy Capacity by 2030 Will Require $1.5 Trillion Per Year
• Will Tesla’s Cybercab Revolutionize Transportation? Analysts Weigh In
• Spanish Power Giant Iberdrola Doubles UK Investment to $31 Billion
• China Starts Tracking Ship Emissions Data
• Geopolitical Risk and Hurricane Milton Push Oil Prices Toward a Weekly Gain
• The Federal Reserve may have pretty much just hit its 2% inflation target
• Dow jumps 400 points to a record on Friday, S&P 500 closes above 5,800 for the first time: Live updates
• Jamie Dimon says geopolitical risks are surging: ‘Conditions are treacherous and getting worse’
• Stock market next week: Earnings season ramps up with more big bank results
• Bitcoin bounces back to $62,000 as economic outlook remains in focus: CNBC Crypto World
• Nation’s Largest Generic Drug Maker To Pay $450 Million To Resolve Kickback, Price-Fixing Claims
• 2-year Treasury yield ends at lowest level in a week after flat producer-price report

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

• The Dow closed down 58 points or 0.14%,
• Nasdaq closed down 10 points or 0.05%,
• S&P 500 closed down 12 points or 0.21%,
• Gold $2,647 up $20.90 or 0.79%,
• WTI crude oil settled at $76 up $2.72 or 3.71%,
• 10-year U.S. Treasury 4.071 down 0.004 points or 0.035%,
• USD index $102.86 down $0.07 or 0.06%,
• Bitcoin $59,796 down $960 or 1.9%,

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

Today’s Highlights

The latest consumer inflation report in the US came in higher than expected, causing stocks to decline on Thursday. The Consumer Price Index (CPI) rose 0.2% month-over-month in September, above the expected 0.1% increase. Core inflation, excluding food and energy, increased 0.3% month-over-month and 3.3% year-over-year. The hotter-than-expected inflation data has reduced expectations for interest rate cuts by the Federal Reserve. Traders now see a 17% chance of no rate cut in November, up from 0% a week ago. Initial unemployment claims rose unexpectedly to 258,000, the highest level since August 2023. The 10-year Treasury yield increased to 4.1%, its highest level since late July.

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Click here to read our current Economic Forecast – October 2024 Economic Forecast: One More Recession Flag Removed Yet Little Headway On Inflation

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Today’s Economic Releases Compiled by Steven Hansen, Publisher:

The Consumer Price Index declined from 2.6% to 2.4% year-over-year in September 2024. If food and energy are excluded inflation remains little changed at 3.3% year-over-year. The driving force in moderating inflation is energy but everywhere I look – there are inflationary pressures present.

In the week ending October 5, the advance figure for seasonally adjusted initial unemployment claims 4-week moving average was 231,000, an increase of 6,750 from the previous week’s unrevised average of 224,250. The increase this week is attributable was Hurricane Helene. Natural disasters like hurricanes often lead to temporary spikes in unemployment claims as businesses are forced to close or reduce operations in affected areas.. There is no recessionary trend in this data.

Here is a summary of headlines we are reading today:

• Australia’s First Major Waste-to-Energy Plant Sparks Debate
• U.S. Clears ConocoPhillips to Recover Venezuela Assets
• The Price of Charging an EV in Europe
• Saudi, UAE, Qatar Lobbying DC to Keep Gulf Oil Safe from Israel
• Finland’s Top Power Utility Targeted With Daily Cyber Attacks
• AMD launches AI chip to rival Nvidia’s Blackwell
• Dow and S&P 500 retreat from records as sticky inflation report weighs on stocks: Live updates
• These income-generating assets are paying yields of more than 5%
• TD Bank pleads guilty in money laundering case, will pay $3 billion in penalties
• Stagflation Signal Stalls Stocks; Sparks Gold Gains
• Stunning Foreign Demand For Strongest 30 Year Auction On Record
• Trump floats new tax break for car loans, saying it’ll help buyers and auto industry

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

• The Dow closed up 432 points or 1.03%,
• Nasdaq closed up 109 points or 0.60%,
• S&P 500 closed up 41 points or 0.71%, (Closed at 5,792, New Historic high 5,797)
• Gold $2,627 down $8.20 or 0.31%,
• WTI crude oil settled at $74 down $0.07 or 0.10%,
• 10-year U.S. Treasury 4.071 down 0.036 points or 0.285%,
• USD index $102.92 up $0.37 or 0.36%,
• Bitcoin $63,127 down $1,141 or 1.84%,

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

Today’s Highlights

US stocks rose on Wednesday, with the S&P 500 and Dow Jones Industrial Average closing at new record highs. The Nasdaq Composite also gained after paring earlier losses. The market was focused on several key developments, including the US Department of Justice considering asking a judge to force Google to sell off parts of its business to address its monopoly in internet search. This news initially pressured Alphabet shares. The minutes from the Fed’s September meeting showed a “substantial majority” of officials supported the 50 basis point interest rate cut, but some favored a smaller 25 basis point cut. This suggests a slightly more hawkish sentiment than previously thought. Investors are awaiting the release of the September Consumer Price Index (CPI) report on Thursday, which will provide further insight into inflation trends and potentially influence the Fed’s future rate decisions. Market expectations for the Fed’s November meeting have shifted, with a 24% chance now priced in for no rate cut, up significantly from previous estimates.

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Click here to read our current Economic Forecast – October 2024 Economic Forecast: One More Recession Flag Removed Yet Little Headway On Inflation

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Today’s Economic Releases Compiled by Steven Hansen, Publisher:

August 2024 sales of merchant wholesalers were up 1.1% from the revised August 2023 level. Total inventories of merchant wholesalers were up 0.6% from the revised August 2023 level. The August inventories/sales ratio for merchant wholesalers, except manufacturers’ sales branches and offices, based on seasonally adjusted data, was 1.35. The August 2023 ratio was 1.35. Employment in this sector is up 0.7% which suggests there is marginal growth  In fact, using US Census own numbers – we see sales growth over 2% year-over-year – and relatively the same as the previous month. Bottom line is that there is no indication of a recession or slowing of this sector.

Here is a summary of the Participants’ Views on Current Conditions and the Economic Outlook in the minutes of the Federal Open Market Committee for the meeting held on September 17-18, 2024:

Participants expressed cautious optimism about inflation trends, noting that while inflation remains elevated, recent data suggests a sustainable return to the 2% target. Key factors influencing this outlook include diminishing pricing power among businesses and a slowdown in nominal wage growth, which is critical for controlling inflation in the services sector. Labor market conditions have eased, with a notable rise in the unemployment rate since April 2023. However, participants agreed that the labor market remains solid, with limited layoffs and manageable job vacancies. The overall economic activity is expanding at a steady pace, supported by resilient consumer spending despite some financial strains on low- and moderate-income households. Participants acknowledged risks to the economic outlook, with reduced upside risks to inflation and increased downside risks to employment. This balance of risks informed their decision to ease monetary policy by lowering the federal funds rate target range by 50 basis points to 4.75% to 5%. While some members preferred a more gradual reduction of 25 basis points, the majority agreed that this adjustment aligns with current economic indicators. Looking ahead, participants anticipate a gradual move toward a more neutral monetary policy stance as inflation trends down sustainably and employment remains near maximum levels. They emphasized that future monetary policy decisions will depend on ongoing economic developments rather than a predetermined course.

Since the meeting, there was a blowout BLS employment report which many believe is inflationary. Likely, this report will temper further federal funds rate reductions. As must know, I did not favor a reduction in the federal funds rate as I believed there remains a significant amount of inflationary pressures which have not moderated.

Here is a summary of headlines we are reading today:

• Shale Producers Prioritize Profit Over Growth
• Chevron Shuts Down Tampa Terminal As Hurricane Milton Approaches
• Exxon Gets Rare Sell Rating On Oversupply Concerns
• Russia’s Planned Idle Refining Capacity Raised by 67% for October
• Mining Giant Rio Tinto to Buy Arcadium Lithium for $6.7 Billion
• IEA: The World Is Not on Track to Triple Renewable Capacity by 2030
• Dow jumps more than 400 points to record close, S&P 500 hits all-time high: Live updates
• Fed officials were divided on whether to cut rates by half a point in September, minutes show
• What the Google break-up threat means for Alphabet’s stock
• Warren Buffett’s S&P 500 bet paid off. Experts weigh in on whether it’s still a winning strategy
• FTC gets ‘troubling reports’ of price gouging for essentials ahead of Hurricane Milton
• Milton Could Trigger $175 Billion Worst-Case Damage Scenario
• FOMC Minutes Show Fed Considerably More Divided Over Size Of Rate Cut
• This is your brain on screens: Phones and computers are creating a FOMO epidemic
• Hurricane Milton is upending cruise itineraries: What travelers need to know in such stormy situations

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

• The Dow closed up 126 points or 0.30%,
• Nasdaq closed up 259 points or 1.45%,
• S&P 500 closed up 55 points or 0.97%,
• Gold $2,641 down $25.40 or 0.95%,
• WTI crude oil settled at $74 down $3.22 or 4.17%,
• 10-year U.S. Treasury 4.026 down 0.002 points or 0.020%,
• USD index $102.50 up $0.03 or 0.03%,
• Bitcoin $62,239 down $997 or 1.44%,

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

Today’s Highlights

US stocks closed higher across the board on Tuesday, with tech stocks leading the gains. The S&P 500 closed near its previous record high. Key factors driving the market performance included Chipmaker Nvidia which led the bounce back in tech stocks. Other “Magnificent Seven” tech giants like Amazon, Apple, and Alphabet also finished firmly in positive territory. Oil prices retreated as Middle East tensions somewhat cooled. The pullback in surging oil prices helped shift investor focus back to interest rates and the US economy. Investors turned their attention to monetary policy, with Federal Reserve officials making comments about the economic outlook. Markets are still adjusting expectations after hopes for large interest rate cuts were dampened. China’s failure to announce another large stimulus package surprised investors and put pressure on oil prices. This led to a slump in Hong Kong stocks as the stimulus-fueled rally in Chinese equities fizzled out.

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Click here to read our current Economic Forecast – October 2024 Economic Forecast: One More Recession Flag Removed Yet Little Headway On Inflation

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Today’s Economic Releases Compiled by Steven Hansen, Publisher:

The NFIB Small Business Optimism Index rose by 0.3 points in September 2024 to 91.5. This is the 33^rd consecutive month below the 50-year average of 98. NFIB Chief Economist Bill Dunkelberg stated:

Small business owners are feeling more uncertain than ever. Uncertainty makes owners hesitant to invest in capital spending and inventory, especially as inflation and financing costs continue to put pressure on their bottom lines. Although some hope lies ahead in the holiday sales season, many Main Street owners are left questioning whether future business conditions will improve.

August 2024 imports were up 6.8% year-over-year, exports up 5.8% year-over-year – and the resulting trade deficit up 18.1% year-over-year. The overall trade deficit is trending up because imports are increasing after a relative lull last year.

Here is a summary of headlines we are reading today:

• EU Unveils New Sanctions to Counter Russian Hybrid Warfare
• Tensions Rise as Ukraine Ends Russian Gas Transit Agreement
• U.S. Set Record-Highs in Natural Gas Power Generation This Summer
• Oil Prices Under Pressure as Supply Disruptions Fail to Materialize
• Oil Prices Tumble 4% as Demand Fears Override Middle East Risk
• Kinder Morgan Shuts Tampa Terminals Ahead of Hurricane Milton
• Hurricane Milton could cause as much as $175 billion in damage, according to early estimates
• S&P 500 jumps nearly 1%, Dow adds 100 points as cooler oil prices lift stocks: Live updates
• The bull market turns two soon. History shows it should keep going, but some investors are wary
• FTX cleared to repay nearly all customers 119% of allowed bankruptcy claims: CNBC Crypto World
• Tampa Bay hasn’t been hit directly by a major hurricane since 1921. Milton may be the one
• “Something Went Totally Nuts” At BLS But Labor Market Indicator Still Strongly Suggests Recession
• Benchmark 10-year Treasury yield closes above 4% for a second day

Click on the “Read More” below to access these, other headlines, and the associated news summaries moving the markets today.

Summary Of the Markets Today:

Summary Of the Markets Today:

• The Dow closed down 185 points or 0.44%,
• Nasdaq closed down 7 points or 0.04%,
• S&P 500 closed down 10 points or  0.17%,
• Gold $2,678 up $8.50 or 0.28%,
• WTI crude oil settled at $74 up $3.83 or 5.31%,
• 10-year U.S. Treasury 3.850 up 0.067 points or 0.54%,
• USD index $101.97 up $0.30 or 0.3%,
• Bitcoin $60,987 up $314 or 0.52%,

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

Today’s Highlights

U.S. stocks slipped on Thursday as investors turned their focus back to the economy and the upcoming monthly jobs report, while concerns over the Middle East conflict pushed oil prices higher. Here are the key points: Investors are bracing for the September jobs report to be released on Friday. This comes after a surprise uptick in private payrolls and signs of loosening in the labor market. Weekly jobless claims increased slightly from the previous week, indicating a general cooling trend in the labor market. A report from Challenger, Gray and Christmas showed planned layoffs in the U.S. decreased from a five-month high. The ongoing Israel-Iran crisis has contributed to rising oil prices for the third consecutive day. Brent crude and West Texas Intermediate futures both gained over 5% following comments from President Biden about a potential Israeli retaliatory attack on Iran’s oil facilities. Signs of labor market deterioration could prompt the Federal Reserve to consider another significant interest rate cut, following last month’s 0.5% reduction. Tesla stock continued to decline, falling more than 3% on Thursday, following disappointing delivery figures and reports of halting U.S. online orders for its cheapest Model 35.

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Click here to read our current Economic Forecast – October 2024 Economic Forecast: One More Recession Flag Removed Yet Little Headway On Inflation

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Today’s Economic Releases Compiled by Steven Hansen, Publisher:

New orders for manufactured goods in August 2024 were down 0.6% year-over-year – down from +3.8% the previous month. I believe that manufacturing remains in a recession and no action to re-shore manufacturing is evident.

U.S.-based employers announced 72,821 job cuts in September 2024, a 4% decrease from the 75,891 cuts announced one month prior. It is up 53% from the 47,457 cuts announced in the same month in 2023. The current layoffs are a sign of a mature market where employers are trying to optimize profits. Andrew Challenger, Senior Vice President of Challenger, Gray & Christmas, Inc. added:

We’re at an inflection point now, where the labor market could stall or tighten. It will take a few months for the drop in interest rates to impact employer costs, as well as consumer savings accounts. Consumer spending is projected to increase, which may lead to more demand for workers in consumer-facing sectors. Layoff announcements have risen over last year, and job openings are flat. Seasonal employers seem optimistic about the holiday shopping season. That said, many of those who found themselves laid off this year from high-wage, high-skill roles, will not likely fill seasonal positions.

In the week ending September 28, the advance figure for seasonally adjusted initial unemployment claims 4-week moving average was 224,250, a decrease of 750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 224,750 to 225,000. There is no sign of a recession in this data.

In September 2024 , the ISM Services PMI^® registered 54.9%, 3.4 percentage points higher than August’s figure of 51.5 percent. The Business Activity Index registered 59.9 percent in September, 6.6 percentage points higher than the 53.3 percent recorded in August, indicating a third month of expansion after a contraction in June. The New Orders Index expanded to 59.4 percent in September, 6.4 percentage points higher than August’s figure of 53 percent. The Employment Index contracted for the first time in three months; the reading of 48.1 percent is a 2.1-percentage point decrease compared to the 50.2 percent recorded in August. These are not great numbers as the US is a services driven economy – but at least they are moving in the right direction.

NFIB’s September jobs report found that 34% (seasonally adjusted) of small business owners reported job openings they could not fill in September, down 6 points from August and the lowest reading since January 2021. It appears that the abnormally high unfilled positions in small business is moderating. NFIB Chief Economist Bill Dunkelberg added:

Overall, the job market appears to be softening. Fewer small firms have openings they can’t fill as we head into fall. But many still report trouble finding qualified applicants and plans to increase compensation is once again on the rise.

Here is a summary of headlines we are reading today:

• AI-Powered Disinformation Campaigns Target U.S. Voters
• Nuclear Power Gains Momentum as Multiple Plants Seek Revival
• Reuters Poll Shows OPEC September Output At Yearly Low
• Oil Explodes 4% Amid Talk of Israel Attacking Iranian Oil & Gas
• Bank of England Warns Middle East Conflict Could Lead to a Major Oil Price Shock
• Here’s everything to expect when the September jobs report is released Friday
• Panic buying amid U.S. ports strike is creating supermarket supply concerns
• U.S. crude oil jumps as Biden comments on possible Israel retaliation against Iran
• OpenAI gets $4 billion revolving credit line, giving it more than $10 billion in liquidity
• States affected by Hurricane Helene warn of price gouging and other scams. Here’s how to avoid being a victim of post-storm schemes
• Why Open AI’s $100 billion 2029 revenue target seems like a tech-fever dream
• 10-year Treasury yield ends at highest level since August after better-than-expected ISM data

Click on the “Read More”

• The Dow closed up 40 points or 0.09%,
• Nasdaq closed up 0.08%,
• S&P 500 closed up 0.01%,
• Gold $2,680 down $10.60,
• WTI crude oil settled at $71 up $1.13,
• 10-year U.S. Treasury 3.783 up 0.04 points,
• USD index $101.61 up $0.42,
• Bitcoin $60,793 down $86 or 0.14%,

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

Today’s Highlights

U.S. stocks drifted higher on Wednesday despite escalating tensions between Israel and Iran, which had initially prompted caution in the market. Stocks had been under pressure at the start of October due to geopolitical concerns, which dampened previous optimism about potential U.S. interest rate cuts. Oil prices extended their surge, with Brent crude and West Texas Intermediate futures rising more than 1% on Wednesday. This follows a significant 5% spike on Tuesday, the largest increase in almost a year6. Traders are factoring in potential supply risks due to heightened attacks between Israel and Iran – as well as the ongoing port strikes on the east and gulf coasts. ADP data showed the private sector added 143,000 jobs in September, surpassing economists’ estimates of 125,000 and significantly higher than August’s 99,000. Tesla shares fell more than 3% as global deliveries rose in Q3 but fell short of Wall Street estimates. Nike shares dropped over 6% after withdrawing its annual outlook and reporting lower-than-expected Q1 revenue.

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Click here to read our current Economic Forecast – October 2024 Economic Forecast: One More Recession Flag Removed Yet Little Headway On Inflation

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Today’s Economic Releases Compiled by Steven Hansen, Publisher:

According to ADP National Employment Report, hiring showed a widespread rebound after a five-month slowdown, with private employers adding 143,000 jobs in September 2024. Year-over-year pay gains for job-stayers fell slightly in September to 4.7%. ADP chief economist Nela Richardson said: “Stronger hiring didn’t require stronger pay growth last month. Typically, workers who change jobs see faster pay growth. But that premium over job-stayers shrank to 1.9 percent, matching a low we last saw in January.” A 143,000 job gains is not excellent but not terrible either. After BLS’s last employment revision, the BLS employment data now aligns better with ADP – and I would expect Friday’s job report to be around 150,000.

Here is a summary of headlines we are reading today:

• China’s Energy Grid Overwhelmed by Renewable Surge
• Robots are Making Nuclear Energy Safer and More Efficient
• OPEC+ Leaves Current Output Cut Policy Unchanged at JMMC
• Oil Moves Higher Despite Rising U.S. Crude Inventories
• Japan Maintains Energy Policy Focused on Boosting Nuclear and Renewables
• The East and Gulf coast ports strike could be a no-win situation for the Biden administration
• OpenAI closes funding at $157 billion valuation, as Microsoft, Nvidia, SoftBank join round
• Dow ekes out narrow gain Wednesday as Middle East tensions weigh on markets: Live updates
• Tesla stock slips after EV maker misses estimates on deliveries
• JPM Analysts Flip-Flop iPhone 16 Demand Forecast In Just Three Days
• 10-year Treasury yield rises from 1-week low as inflation worries return
• Oil prices end at 2-week high as Israel weighs response to Iran missile attack

Click on the “Read More”

• The Dow closed down 173 points or 0.41%,
• Nasdaq closed down 1.53%,
• S&P 500 closed down 0.93%,
• Gold $2,680 up $20.60,
• WTI crude oil settled at $70 up $2.21,
• 10-year U.S. Treasury 3.739 down 0.063 points,
• USD index $101.20 up $0.42,
• Bitcoin $62,041 down $1,845 or 2.91%,

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

Today’s Highlights

US stocks closed lower on Tuesday after Iran fired over 100 ballistic missiles at Israel. Oil prices saw their biggest increases in nearly a year. West Texas Intermediate crude rose over 3% to above $70 per barrel, while Brent crude climbed about 3% to around $74 per barrel. New economic data showed job openings unexpectedly increased in August, while US manufacturing held steady in September, though still in contraction territory. Investors are looking ahead to Friday’s September jobs report for further clues on the economy and Federal Reserve policy. A dockworkers’ strike began on the East and Gulf coasts, threatening to disrupt shipping and potentially impact the economy.

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Click here to read our current Economic Forecast – October 2024 Economic Forecast: One More Recession Flag Removed Yet Little Headway On Inflation

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Today’s Economic Releases Compiled by Steven Hansen, Publisher:

Construction spending during August 2024 was 4.1% above August 2023 (2.8% inflation-adjusted)- down from 5.3% the previous month. Spending on private construction was up 3.1% year-over-year (down from 4.2% the previous month). Public construction spending was up 7.8% year-over-year (down from 9.0% the previous month). The bottom line is that construction growth is moderating which is not good news for one of the bright spots in the economy.

The ISM Manufacturing PMI^® registered 47.2 percent in September 2024 – unchanged from August. A Manufacturing PMI^® above 42.5 percent, over a period of time, generally indicates an expansion of the overall economy. The New Orders Index remained in contraction territory, registering 46.1 percent, 1.5 percentage points higher than the 44.6 percent recorded in August. The September reading of the Production Index (49.8 percent) is 5 percentage points higher than August’s figure of 44.8 percent. The Prices Index went into contraction (or ‘decreasing’) territory for the first time this year, registering 48.3 percent, down 5.7 percentage points compared to the reading of 54 percent in August. The Backlog of Orders Index registered 44.1 percent, up 0.5 percentage point compared to the 43.6 percent recorded in August. The Employment Index registered 43.9 percent, down 2.1 percentage points from August’s figure of 46 percent. The bottom line is that manufacturing continues to be in a recession.

The number of job openings was little changed at 8.0 million on the last business day of August but is down 14.5% year-over-year. What pundits watch is a correlation between job openings and total employment – and this correlation indicates a further slowing of job growth in the coming months. I see no forces at play which suggest a strengthening employment growth.

Here is a summary of headlines we are reading today:

• Falling Energy Prices Drive Eurozone Inflation Below 2% Goal
• Is a New Nuclear Arms Race Inevitable?
• Oil Prices Spike As Iran Sends Volley of 100+ Ballistic Missiles Into Israel
• U.S. Port Strike Could Trigger New Wave of Inflation
• Oil Trader Gunvor Doesn’t Expect Middle East Conflict to Restrict Supply
• U.S. Administration Buys 6 Million Barrels of Crude for SPR
• Iran launches missile attack on Israel for killing of Hezbollah leader, general
• S&P 500 falls, Nasdaq drops 1% to start October as Middle East tensions intensify: Live updates
• Where the charts indicate gold is headed next as it rallies on escalating geopolitical tensions
• Robinhood announces crypto transfers for European customers: CNBC Crypto World
• Tesla Prevails In Lawsuit Alleging Autopilot Fraud
• The “Everything Market” Could Last A While Longer
• Why was the stock market down today? It wasn’t just about Iran.
• 10-year Treasury yield ends at lowest in a week as Iran launches retaliatory strikes on Israel

Click on the “Read More”

• The Dow closed up 17 points or 0.04%,
• Nasdaq closed up 0.38%,
• S&P 500 closed up 0.42%,
• Gold $2,653 down $15.10,
• WTI crude oil settled at $68 up $0.11,
• 10-year U.S. Treasury 3.789 up 0.004 points,
• USD index $100.77 up $0.39,
• Bitcoin $63,306 down $2,339 or 3.56%,

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

Today’s Highlights

The S&P 500, Nasdaq Composite, and Dow Jones Industrial Average all closed September 2024 at new record highs. September, typically a challenging month for stocks, ended with gains across major indexes. The S&P 500 had its best year-to-date performance at September’s end since 1997. It was the best quarter for the S&P 500 since Q4 2021. Factors Driving Performance was the Federal Reserve’s large interest rate cut boosted investor confidence and signs of resilience in the US economy helped lift stocks. Federal Reserve Chair Jerome Powell’s comments on maintaining economic strength while signaling a cautious approach to future rate cuts were well-received. Looking Ahead, Investors are anticipating the September jobs report, due on Friday, as an important indicator of the market’s direction.

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Click here to read our current Economic Forecast – October 2024 Economic Forecast: One More Recession Flag Removed Yet Little Headway On Inflation

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Today’s Economic Releases Compiled by Steven Hansen, Publisher:

The Chicago Business Barometer rose slightly by 0.5 points to 46.6 in September 2024.  The Barometer has now been in a tight range between 45.3-47.4 for four consecutive months. The marginal rise was due to two of the five subcomponents improving significantly: Order Backlogs and Employment.  Meanwhile, reductions in Supplier Deliveries, New Orders and Production restricted the upward move.   This index is important to pundits as they believe it is a window into the ISM Manufacturing Index which will be released tomorrow. I see manufacturing in a recession.

The Dallas Fed Manufacturing index fell modestly in September 2024. The production index, a key measure of state manufacturing conditions, slipped to -3.2, with the negative reading signaling a slight decline in output from August. Most other measures of manufacturing activity also indicated declines this month. The new orders index was largely unchanged at -5.2. The capacity utilization index fell five points to -7.0, and the shipments index retreated back into negative territory, falling eight points to -7.0. Anyway you cut it, manufacturing remains in a recession.

Today, Federal Reserve Chair Jerome Powell delivered a speech to the National Association for Business Economics in Nashville, Tennessee, emphasizing the Fed’s commitment to maintaining economic stability. Powell described the U.S. economy as being in “solid shape” and expressed the Fed’s intention to use its tools to preserve this condition. Powell indicated that if the economy progresses as anticipated, the Fed would gradually reduce interest rates towards a more neutral position. However, he stressed that the central bank is not following a predetermined course, with decisions being made on a meeting-by-meeting basis. The Fed recently implemented a 50 basis point rate cut, which Powell attributed to increased confidence in the Fed’s ability to maintain a robust job market and economy while inflation continues to decline. While some investors had been anticipating another significant rate cut in the near future, Powell’s remarks appeared to temper these expectations. Powell expressed growing confidence that inflation is on a sustainable path back to the Fed’s 2% target. He also noted that the job market remains solid, with low layoff rates and an unemployment rate within the full employment range. During the Q&A session, Powell emphasized that the Federal Open Market Committee is not inclined to cut rates hastily. This cautious stance aligns with the Fed’s goal of balancing economic growth with price stability.