markets

Summary Of the Markets Today:

• The Dow closed down 126 points or 0.43%,
• Nasdaq closed up 0.25%,
• S&P 500 down 0.21%,
• WTI crude oil settled at $78 up 2.75%,
• USD $114.25 up $0.14,
• Gold $1635 up $2.00,
• Bitcoin $19,029 down 0.50% – Session Low 18,868,
• 10-year U.S. Treasury 3.988% up 0.108%,

Today’s Economic Releases:

The S&P CoreLogic Case-Shiller 20-City Composite in July 2022 posted a 16.1% year-over-year gain, down from 18.7% in the previous month. CoreLogic Deputy Chief Economist Selma Hepp stated:

In July, the CoreLogic S&P Case-Shiller Index posted an increase of 15.8%, down from a 18.1% gain in June, marking the fourth month of decelerating annual home price appreciation. In addition, month-to-month index turned negative, down 0.3% in July, the first time since late 2018 when the Federal Reserve went through a round of monetary tightening leading to a surge in mortgage rates and subsequent housing market slowdown. Rapid home price deceleration, which is spreading beyond the West Coast markets, was anticipated given the Fed’s actions and will bring home price growth closer in line with income growth. Returning to long-term average of 4-5% annual price growth is closer than initially anticipated – potentially by early 2023.

New orders for manufactured durable goods in August 2022, down two consecutive months, decreased 0.2% month-over-month and is up 8.8% year-over-year. Still, when adjusted for inflation, year-over-year growth is down 0.8% (see graph below):

Sales of new single‐amily houses in August 2022 were at a 28.8% above July rate but is 0.1% below August 2021.  The median sales price of new houses sold in August 2022 was $436,800.  The average sales price was $521,800.

The Federal Reserve Bank of Richmond composite manufacturing index rose fro+m −8 in August to 0 in September, matching its July level.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 330 points or 1.11%,
• Nasdaq closed down 0.60%,
• S&P 500 down 1.03%,
• WTI crude oil settled at $77 down 3.33%,
• USD $114.04 weakens $1.02,
• Gold $1631 down $24,
• Bitcoin $19,193 up 1.43% – Session Low 18,693,
• 10-year U.S. Treasury 3.879% little changed

Today’s Economic Releases:

The Dallas Fed Manufacturing Index improved in September and rose eight points to 9.3, a reading suggestive of stronger output growth.

The Chicago Fed National Activity Index (CFNAI) 3-month moving average increased modestly from last month’s -0.08 to August 2022’s +0.01. A zero value for the monthly index has been associated with the national economy expanding at its historical trend (average) rate of growth. I consider the CFNAI to be one of the best coincident indicators of the economy. The following graph is the monthly index (which is not used for economic forecasting) but shows the inputs from the 4 categories that comprise the index.

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 486 points or 1.62%,
• Nasdaq closed down 1.80%,
• S&P 500 down 1.72%,
• WTI crude oil settled at $79 down 5.60%,
• USD $113.05 weakening 1.44%,
• Gold $1643 down $29,
• Bitcoin $18,739 down 3.43% – Session Low 18,588,
• 10-year U.S. Treasury 3.681 little changed,
• Baker Hughes Rig Count: U.S. +1 to 764 Canada +4 to 215

Today’s Economic Releases:

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 107 points or 0.35%,
• Nasdaq closed down 1.37%,
• S&P 500 down 0.84%,
• Gold $1681 up $5,
• WTI crude oil settled at $83 up $0.58,
• 10-year U.S. Treasury 3.704%  little changed,
• USD index $110.31 weakening 0.60%,
• Bitcoin $19,350 up 4.80%,

Today’s Economic Releases:

A summary of headlines we are reading today:

Summary Of the Markets Today:

• The Dow closed down 522 points or 1.70%,
• Nasdaq closed down 1.79%,
• S&P 500 down 1.71%,
• WTI crude oil settled at $83 down 1.12%,
• USD $111.00 weakening $1.26,
• Gold $1683 up $11.30,
• Bitcoin $19,006 up 0.41% – Session Low 18,815,
• 10-year U.S. Treasury 3.526 little changed

Today’s Economic Releases:

Existing-home sales declined for the seventh consecutive month. Total existing-home sales contracted 0.4% month-over-month in August 2022. Year-over-year, sales declined 19.9%. Sales are now at levels seen in 2012/2013. The median existing-home price for all housing types in August was up 7.7% year-over-year.

The Federal Reserve raised the federal funds rate by 75 bps to 3%-3.25% today, the third straight three-quarter point increase and pushing borrowing costs to the highest since 2008. The FOMC statement said in part:

Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks. The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run … and anticipates that ongoing increases in the target range will be appropriate.

At the same time, the Federal Reserve Board / FOMC released their economic projections which shows a significantly worsening economy since their June 2022 projections. However, there was no forecasted recession in these projections.

Summary Of the Markets Today:

• The Dow closed down 313 points or 1.01%,
• Nasdaq closed down 0.95%,
• S&P 500 down 1.13%,
• Gold $1674 down $4.50,
• WTI crude oil settled at $84 down $1.54,
• 10-year U.S. Treasury 3.559%  little changed,
• USD index $110.16 weakening 0.37%,
• Bitcoin $19,048 down 2.74%,

Today’s Economic Releases:

Privately‐owned housing units authorized by building permits in August 2022 were 10.0% below July and 14.4% below August 2021.  Privately-owned housing starts in August were up 12.2% month-over-month and down 0.1% year-over-year. Privately‐owned housing completions in August were down 5.4% month-over-month but are up 3.1% year-over-year. The new home construction sector remains near or above the pre-pandemic levels.

Mortgage Delinquencies Inch Up From May but Remain Near Record Low in June. For the month of June 2022, 2.9% of all mortgages in the U.S. were in some stage of delinquency (30 days or more past due, including those in foreclosure), representing a 1.5 percentage point decrease compared to 4.4% in June 2021.

Summary Of the Markets Today:

• The Dow closed up 197 points or 0.64%,
• Nasdaq closed up 0.76%,
• S&P 500 up 0.69%,
• WTI crude oil settled at 85 up 0.45%,
• USD $109.63 strengthened 0.12%,
• Gold $1683 up 0.02%,
• Bitcoin $19,514 up 0.45% – Session Low 18,340,
• 10-year U.S. Treasury 3.487 Unchanged,

Today’s Economic Releases:

In another sign that the slowdown in the housing market continues, builder sentiment fell for the ninth straight month in September as the combination of elevated interest rates, persistent building material supply chain disruptions and high home prices continue to take a toll on affordability. Builder confidence in the market for newly built single-family homes fell three points in September to 46, the lowest level since May 2014 with the exception of the spring of 2020.

In a still-tight labor market, 85% of companies are actively hiring, up from 81% in the spring of this year. Despite the need for workers, 53% of companies expect a recession and 31% are taking actions to prepare for a slowdown, according to new survey results from global outplacement and executive leadership coaching firm Challenger, Gray & Christmas, Inc.

Summary Of the Markets Today:

• The Dow closed down 139 points or 0.45%,
• Nasdaq closed down 0.90%,
• S&P 500 down 0.72%,
• WTI crude oil settled at $85 up 0.27%,
• USD $109.74 little changed,
• Gold $1683 up 0.38%,
• Bitcoin $19.649 down 0.18% – Session Low 19,370,
• 10-year U.S. Treasury 3.453% Unchanged,
• Baker Hughes Rig Count: U.S. +4 to 763 Canada +6 to 211

Today’s Economic Releases:

The Atlanta Fed’s GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2022 is 0.5% on September 15, down from 1.3% on September 9. After this week’s releases from the US Department of the Treasury’s Bureau of the Fiscal Service, the US Bureau of Labor Statistics, the US Census Bureau, and the Federal Reserve Board of Governors, decreases in the nowcasts of third-quarter real personal consumption expenditures growth and third-quarter real gross private domestic investment growth from 1.7% and -6.1%, respectively, to 0.4% and -6.4%, respectively, was slightly offset by an increase in the nowcast of third-quarter real government spending growth from 1.3% to 2.0%. What this decline in GDPNow says that the economy was only modestly (and not significantly) improving in 3Q2022 as the previous two quarters in 2022 were in contraction – but it is noteworthy that the data coming at the end of 3Q2022 is weak and may be signaling another contraction in 4Q2022.

Summary Of the Markets Today:

• The Dow closed down 173 points or 0.56%,
• Nasdaq closed down 1.43%,
• S&P 500 down 1.13%,
• WTI crude oil settled at $85 down 3.77%,
• USD $109.75 weakened 0.06%,
• Gold $1673 down 2.14%,
• Bitcoin $19.844 down 2.00% – Session Low 19,612,
• 10-year U.S. Treasury 3.449% Unchanged,

Today’s Economic Releases:

The Philly Fed Manufacturing Index declined in September 2022. The index for returned to negative territory, falling from 6.2 in August to -9.9 this month. The new orders index remained negative, and the shipments index declined but remained positive. This index is showing a weakly growing economy.

Prices for U.S. imports grew 7.8% year-over-year in August following a 8.7% YoY in July whilst U.S. export prices grew 10.8% in August after growing 12.9% the previous month. The trend of inflation is this sector continues to modestly abate.

In the week ending September 10, the advance figure for seasonally adjusted initial unemployment claims 4-week moving average was 224,000, a decrease of 8,000 from the previous week’s revised average. The previous week’s average was revised down by 1,000 from 233,000 to 232,000. New unemployment claims continues to modestly improve which is a sign of an improving economy.

Advance estimates of U.S. retail and food services sales for August 2022, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were 9.1% above August 2021. This is the first month since March 2022 where the inflation-adjusted YoY growth returned to positive territory (1.2% – red line on the graph below). This implies the economy is modestly growing in August.

the September 2022 Empire State Manufacturing Survey index climbed thirty points to -1.5. New orders edged higher, and shipments increased sharply. This index is implying a modest decline in manufacturing.

According to the Federal Reserve, industrial production decreased 0.2% in August. However, year-over-year growth has been holding quite steady at 3.7%. In fact, all elements of industrial production remain in positive territory EXCEPT utilities which show a 1.6% YoY contraction. This data set is indicating the economy is expanding at a healthy rate.

The combined value of distributive trade sales and manufacturers’ shipments for July, adjusted for seasonal and trading day differences but not for price changes, was up 12.5% from July 2021. Inventories Manufacturers’ and trade inventories for July were up 18.4% from July 2021. The key indicator of the health of this sector is the total business inventories/sales ratio which was 1.32. The July 2021 ratio was 1.26. These numbers indicate that inventories are growing with respect to sales – but remain in the range seen in the last 10 years [it could be just the supply chain catching up].

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Summary Of the Markets Today:

• The Dow closed up 30 points or 0.10%,
• Nasdaq closed up 0.74%,
• S&P 500 up 0.34%,
• WTI crude oil settled at $89 up 2.03% for the week,
• USD $109.82 strengthened 0.14%,
• Gold $1705 down 0.73%,
• Bitcoin $19.958 down 1.07% – Session Low 19,691,
• 10-year U.S. Treasury 3.412 Unchanged,

Today’s Economic Releases:

The Producer Price Index for final demand moved up 8.7% for the 12 months ended in August 2022 – down from last month’s 9.8%. The decrease in the index for final demand is attributable to a decline in final demand goods which was somewhat offset by a rise in final demand services. The CPI released yesterday for August 2022 showed an 8.2% YoY rise. In general, the CPI and PPI move in the same direction.