markets

Summary Of the Markets Today:

• The Dow closed up 337 points or 1.07%,
• Nasdaq closed up 2.25%,
• S&P 500 up 1.63%,
• WTI crude oil settled at $85 down $0.05,
• USD $110.89 down $1.11,
• Gold $1658 up $4.10,
• Bitcoin $20,1151 up 4.12% – Session Low 19,249,
• 10-year U.S. Treasury 4.069% down 0.155%

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

Today’s Economic Releases:

The S&P CoreLogic Case-Shiller 20-City Composite posted a 13.1% year-over-year gain, down from 16.0% in the previous month. CoreLogic Deputy Chief Economist Selma Hepp stated:

While the CoreLogic S&P Case-Shiller Index retracts rapidly amid surging mortgage rates — up 13% in August— a handful of markets located in Southeast and South continue to see over 20% annual gains, with Miami and Tampa topping the list. In contrast, Phoenix, Las Vegas and Dallas have now joined the other West Coast cities that are rapidly slowing since the spring peak in home price growth. At this pace, CoreLogic’s Home Price Index forecast suggests annual home price growth will slow to 9% by December, and further down to less than 1% by the end of the first quarter 2023.

The Richmond Fed Manufacturing Survey reported weaker conditions in October 2022. The composite manufacturing index fell from 0 in September to −10 in October, dipping below its August level. Two of its three component indexes deteriorated notably: the indexes for shipments and volume of new orders fell from 14 and −11 in September to −3 and −22 in October, respectively. The third component, the employment index, remained unchanged at 0 in October, as hiring challenges persisted.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 418 points or 1.34%,
• Nasdaq closed up 0.86%,
• S&P 500 up 1.19%,
• WTI crude oil settled at $85 down $0.37,
• USD $111.85 down $0.97,
• Gold $1654 down $2.30,
• Bitcoin $19,341 down 0.82% – Session Low 19,195,
• 10-year U.S. Treasury 4.242% up 0.03%

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

Today’s Economic Releases:

The Chicago Fed National Activity Index (CFNAI)’s three-month moving average moved up to +0.17 in September 2022 from +0.04 in August. Periods of economic expansion have historically been associated with values of the
three-month moving average above –0.70. The bottom line is that this index [which I consider the best coincident index] is saying the economy is healthy and expanding.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 749 points or 2.47%,
• Nasdaq closed up 2.31%,
• S&P 500 up 2.37%,
• WTI crude oil settled at $85 up $0.14,
• USD $111.85 down $0.97,
• Gold $1660 up $22.90,
• Bitcoin $19,066 down 0.70% – Session Low 18,943,
• 10-year U.S. Treasury 4.221% down 0.005%
• Baker Hughes Rig Count: U.S. +2 to 771 Canada -6 to 210

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

Today’s Economic Releases:

The September 2022 Monthly Treasury Statement issued by US Treasury shows the calendar year had a deficit of $1,375,389,000,000.

 

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 90 points or 0.30%,
• Nasdaq closed down 0.61%,
• S&P 500 down 0.80%,
• WTI crude oil settled at 85 down $1.04,
• USD $112.88 down $0.01,
• Gold $1617 down $21.60,
• Bitcoin $19,066 down 0.70% – Session Low 18,943,
• 10-year U.S. Treasury 4.237% up 0.108%

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

Today’s Economic Releases:

Manufacturing activity in the Philly Fed region continued to decline overall this month. The survey’s indicators for general activity and new orders remained negative, and the shipments index was little changed at a low but positive reading. The survey’s future general activity indexes suggest that the surveyed firms expect declines overall over the next six months. Another indication that the manufacturing sector of the U.S. is slowing.

In the week ending October 15, the advance figure for Unemployment Insurance Weekly Claims seasonally adjusted  4 week moving average was 212,250, an increase of 1,250 from the previous week’s revised average. The previous week’s average was revised down by 500 from 211,500 to 211,000. It is expected that the economic slowing as a result of the Fed fighting inflation will cause an increase in initial claims.

September 2022 existing-home sales slowed for the eighth consecutive month to a decline of 23.8% year-over-year. The median existing-home sales price is up 8.4% from one year ago. The inventory of unsold existing homes declined for the second straight month to the equivalent of 3.2 months’ supply at the current monthly sales pace.

Imports into the USA generally indicate how the economy is doing. The Ports of Los Angeles and Long Beach handle 40% of the USA container traffic and is a good indicator of the economy. Imports were down 18% YoY in September, and exports were up 2% YoY.  The tea leaves are saying that the economy is slowing.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 100 points or 0.32%,
• Nasdaq closed down 0.85%,
• S&P 500 down 0.67%,
• WTI crude oil settled at $86 up $1.91,
• USD $112.89 up $0.76,
• Gold $1634 down $21.50,
• Bitcoin $19,216 down 0.14% – Session Low 19,117,
• 10-year U.S. Treasury 4.129% up 0.129%

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

Today’s Economic Releases:

New privately owned housing units continue its downward trend for permits issued (down 3.1% year-over-year – blue line on the graph below) and housing starts (down 7.7% year-over-year – red line on the graph below) – but construction completions remained strong (up 15.7% year-over-year – green line on the graph below). The climbing mortgage rates is affecting this sector.

The October 2022 Federal Reserve’s Beige Book states:

National economic activity expanded modestly on net since the previous report; however, conditions varied across industries and Districts. Four Districts noted flat activity and two cited declines, with slowing or weak demand attributed to higher interest rates, inflation, and supply disruptions. Retail spending was relatively flat, reflecting lower discretionary spending, and auto dealers noted sustained sluggishness in sales stemming from limited inventories, high vehicle prices, and rising interest rates.

The Beige Book summarizes comments from contacts outside the Federal Reserve system. The Beige Book has not been timely in documenting recessions – but this month it appears they are saying the economy grew very little.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 338 points or 1.12%,
• Nasdaq closed up 0.9%,
• S&P 500 up 1.14%,
• Gold $1656 down $7.80,
• WTI crude oil settled at $83 down $2.37,
• 10-year U.S. Treasury 3.996% down 0.019%,
• USD index $112.03 little changed,
• Bitcoin $19,373 down $275

Today’s Economic Releases:

September 2022 Industrial production increased 5.3% year-over-year with the components: manufacturing up 4.8% year-over-year; mining up 11.1% year-over-year; and utilities up 0.5% year-over-year. All components improved over the previous month.

U.S. single-family home rental costs posted an 11.4% year-over-year increase in August 2022, marking the fourth straight month of annual deceleration. Even so, rental costs remained elevated, with annual growth running at about five times the rate than in August 2020 in the midst of the COVID-19 pandemic. A shortage of available rental units continues to fuel price growth, although inflation and worries over a looming recession should begin to temper increases. CoreLogic’s detailed view by rental prices:

• Lower-priced (75% or less than the regional median): 12.9%, up from 7.4% in August 2021
• Lower-middle priced (75% to 100% of the regional median): 12.8%, up from 8.3% in August 2021
• Higher-middle priced (100% to 125% of the regional median): 12.3%, up from 9.4% in August 2021
• Higher-priced (125% or more than the regional median): 10.1%, down from 10.7% in August 2021

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed up 551 points or 1.86%,
• Nasdaq closed up 3.43%,
• S&P 500 up 2.65%,
• WTI crude oil settled at $85.49 down $0.13,
• USD $112.13 down $1.18,
• Gold $1653 up $4.20,
• Bitcoin $19,543 up 1.04% – Session Low 19,156,
• 10-year U.S. Treasury 4.021% up 0.013%

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

Today’s Economic Releases:

The New York Fed’s Manufacturing Survey headline general business conditions index declined eight points to -9.1 in October 2022 (negative numbers suggest worsening conditions). As manufacturing is a minor component of the economy, this indicator by itself is unable to warn of a recession – having said that it does usually suggest an economy which is not strong.

A summary of headlines we are reading today:

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.

Home Prices: How Much Trouble Are YOU In? 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: