markets

• 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.

• The Dow closed up 138 points or 0.33%, (Closed at 42,313, New Historic high 42,628)
• Nasdaq closed down 0.39%,
• S&P 500 closed down 0.13%,
• Gold $2,674 down $20.70,
• WTI crude oil settled at $69 up $0.92,
• 10-year U.S. Treasury 3.754 down 0.035 points,
• USD index $100.42 down $0.10,
• Bitcoin $65,672 up $581 or 0.89%,
• Baker Hughes Rig Count: U.S. -1 to 587 Canada +7 to 218

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

Today’s Highlights

The major stock indexes traded mixed on Friday but closed the week on a positive note. The mixed performance on Friday came as investors reacted to the latest Personal Consumption Expenditures (PCE) inflation report, which is closely watched by the Federal Reserve. This inflation data boosted expectations for potential interest rate cuts by the Fed, with over 50% of traders now anticipating a 50 basis point cut at the next meeting. Despite Friday’s mixed trading, all three major indexes recorded gains for the week, buoyed by renewed economic confidence. A strong GDP report and moderating inflation have increased belief that the Fed can achieve a “soft landing” while beginning to cut interest rates. The PCE report showed continued easing of price pressures, supporting expectations for Fed rate cuts. Additional stimulus measures from China provided further support to markets. Chip stocks closed lower on Friday, with the PHLX Semiconductor Index dropping 1.8%, though it remained up 4.3% for the week.

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Click here to read our current Economic Forecast – September 2024 Economic Forecast: One Recession Flag Removed With Three Remaining

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

In August 2024, Real (inflation-adjusted) Personal Consumption Expenditures (PCE) increased from 2.8% to 2.9%. Real Disposable Personal Income decreased from 3.2% to 3.1%. From the same month one year ago, the PCE price index for August 2024 increased 2.2% – down from 2.5% the previous month. Prices for goods decreased 0.9 percent and prices for services increased 3.7 percent. Food prices increased 1.1 percent and energy prices decreased 5.0 percent. Excluding food and energy, the PCE price index increased 2.7 percent from one year ago – up from 2.6% the previous month. The bottom line is that in reality there was no change in income or expenditures – so the projection of no change going forward suggests no change in economic growth in the months ahead. And if one only looks at the PCE price index for inflation one would think we are making progress. But the reality is that the Federal Reserve looks at PCE less food and energy – and that actually increased.

Here is a summary of headlines we are reading today:

• U.S. Oil Drilling Sags: Baker Hughes
• Oil Jumps as Middle East Tensions Ignite Supply Fears
• WTI Houston Crude Prices Gain Prominence as U.S. Oil Exports Jump
• India Says It Won’t Buy LNG From Russia’s Sanctioned Arctic Project
• Dow jumps 100 points to close at a record, major averages extend rally to third week: Live updates
• Wall Street braces for a turbulent October with jobs report on deck next week
• Stocks making the biggest moves midday: Wynn Resorts, Rocket Lab USA, Cassava Sciences and more
• Mystery Of Upward GDP Revision Solved: You Are All $500 Billion Richer Now According To A Revised Biden Admin Spreadsheet
• Former ‘Apprentice’ contestant reduces their stake in Trump Media & Technology

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

• The Dow closed up 260 points or 0.62%,
• Nasdaq closed up 0.60%,
• S&P 500 closed up 0.40%, (Closed at 5,745, New Historic high 5,767)
• Gold $2,696 up $11.30,
• WTI crude oil settled at $67 down $2.39,
• 10-year U.S. Treasury 3.794 up 0.013 points,
• USD index $100.55 down $0.36,
• Bitcoin $64,793 up $1,687 or 2.67%,

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

Today’s Highlights

US stocks rallied on Thursday, with the S&P 500 closing at a new record high. The positive momentum was driven by several key factors: The final US GDP growth report for Q2 exceeded expectations, while weekly jobless claims fell to their lowest level in four months. Micron Technology (MU) reported upbeat earnings, boosting the semiconductor sector: Micron stock: +15% PHLX Semiconductor Index (^SOX): +3.7%. Other chip stocks also gained: AMD +3.4%, Qualcomm +2.4%, Intel +1.3%. Chinese leaders announced plans to increase fiscal spending, address the property crisis, and support the stock market. This led to a significant jump in mainland Chinese stocks, with the CSI 300 (000300.SS) on track for its best week in a decade. Super Micro Computer (SMCI). The stock fell 12% following a Wall Street Journal report about a Department of Justice probe into the company, stemming from a recent Hindenburg Research short seller report. Despite the overall chip sector rally, Nvidia shares rose only 0.16%. However, this slight increase was enough to push the company back into the $3 trillion market cap club. Investors are now looking ahead to Friday’s release of the Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation metric.

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Click here to read our current Economic Forecast – September 2024 Economic Forecast: One Recession Flag Removed With Three Remaining

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

New orders for manufactured durable goods in August 2024 are up 1.5% year-over-year (down 1.1% inflation adjusted) – and little changed from the previous month. Durable goods remains a drag on the economy.

Real gross domestic product (GDP) third estimate increased at an annual rate of 3.0% in the second quarter of 2024 unchanged from the second estimate. The implicit price index (inflation) was unchanged at 2.5% year-over-year (2.8% excluding food and energy). My projection is that GDP in 3Q2024 should be little changed from these numbers.

The median number of years that wage and salary workers had been with their current employer was 3.9 years in January 2024, down from 4.1 years in January 2022 and the lowest since January 2002. These are interesting numbers but have little impact on the economy.

Kansas City Fed manufacturing activity declined moderately in September 2024. The month-over-month composite index was -8 in September, down from -3 in August and up from -13 in July. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Manufacturing remains in a recession in the US.

 Pending home sales in August 2024 were down 3.0% year-over-year. I know everyone is thinking the federal funds rate will make houses more affordable – but house price appreciation will offset these gains. NAR Chief Economist Lawrence Yun added:

A slight upward turn reflects a modest improvement in housing affordability, primarily because mortgage rates descended to 6.5% in August. However, contract signings remain near cyclical lows even as home prices keep marching to new record highs.

In the week ending September 21, the advance figure for seasonally adjusted initial unemployment claims 4-week moving average was 224,750, a decrease of 3,500 from the previous week’s revised average. The previous week’s average was revised up by 750 from 227,500 to 228,250. There is no indication of a recession or slowing economy in these numbers.

Here is a summary of headlines we are reading today:

• Ranking the World’s Financial Centers
• Russia Lowers Nuclear Threshold, Citing Western Threats
• Oil Plunges Over 2% on Rumor Saudis Ready To Increase Output
• Russia Could Scrap Gasoline Export Ban if Domestic Surplus Emerges
• The Fed slashed interest rates last week, but Treasury yields are rising. What’s going on?
• Dow jumps more than 250 points, S&P 500 closes higher to post fresh record: Live updates
• David Tepper says the Fed has to cut rates at least two or three more times to keep credibility
• Misinformation running rampant on Facebook has officials concerned about election disruptions
• Hurricane Helene is upgraded to a Category 3 as it barrels toward Florida
• Yield on 2-year Treasury logs biggest jump in five weeks after strong U.S. GDP report
• A port strike would be ill-timed, but disruption could boost these companies

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

• The Dow closed down 293 points or 0.70%, (Closed at 41,915, New Historic high 42,300)
• Nasdaq closed up 0.04%,
• S&P 500 closed down 0.19%, (Closed at 5,722, New Historic high 5,741)
• Gold $2,684 up $6.90,
• WTI crude oil settled at $70 down $1.81,
• 10-year U.S. Treasury 3.789 up 0.053 points,
• USD index $100.98 up $0.51,
• Bitcoin $63,274 down $1,030 or 1.60%,

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

Today’s Highlights

The stock market rally lost steam, with major indexes closing mixed after retreating from all-time highs reached yesterday. Investors are debating the health of the economy and the chances of another large interest rate cut following the Fed’s surprise 0.5% cut. Economic data was mixed – new home sales declined in August, but mortgage applications jumped to the highest level since 2022 as rates dropped. The focus is now on upcoming GDP data and the PCE inflation index report later this week.

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Click here to read our current Economic Forecast – September 2024 Economic Forecast: One Recession Flag Removed With Three Remaining

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

Human Resources Trends & Issues Survey conducted online among 182 HR executives and business leaders nationwide by global outplacement and business and executive coaching firm Challenger Gray & Christmas, Inc. found:

• Cost-Cutting Measures: Companies are actively pursuing cost reductions as they approach the end of the year, focusing on travel, bonuses, salaries, and technology solutions. A survey found that 9% of organizations are using return-to-office policies as part of their cost-cutting strategies, reflecting a shift from traditional methods like layoffs
• AI in the Workplace: There is a growing disconnect between employee usage of AI tools (37% of employees) and corporate policies, with only 12% of companies having formal AI training or strategies. This gap raises concerns about data security and ethical implications as employees navigate AI independently
• Quiet Quitting Concerns: The phenomenon of “quiet quitting,” where employees disengage without resigning, is a significant worry for 33% of companies. However, many lack concrete evidence or tracking mechanisms to assess its impact accurately
• Leadership Perception: Favorable views of leadership have slightly declined, with 54.55% of employees expressing positive opinions. There is an increase in mixed views and a notable rise in companies not tracking leadership perceptions
• Employee Priorities: Flexibility remains the top priority for employees, followed by meaningful work and career advancement. While salary and empathetic leadership are still valued, their importance has decreased compared to previous surveys
• Employer Offerings: Companies are adjusting their offerings in response to employee needs, with a focus on leadership development and DEI initiatives. However, financial incentives like signing bonuses have declined significantly
• Remote Work Trends: The trend towards hybrid and remote work continues, with 54% of companies offering such arrangements. The model of requiring three days in the office has become more common
• Hiring Challenges: Filling roles is becoming easier for some companies, though challenges remain, particularly in specialized fields like healthcare and technology. Despite improvements, 17% of companies are still in hiring freezes

Sales of new single-family houses in August 2024 were up 9.8% above the August 2023. The median sales price of new houses sold in August 2024 was $420,600. The average sales price was $492,700. The seasonally-adjusted estimate of new houses for sale at the end of August was 467,000. This represents a supply of 7.8 months at the current sales rate. New home sales remain a bright spot in the current economy.

Here is a summary of headlines we are reading today:

• Wells Fargo: Oil Prices To Stay Depressed Through 2025 on Global Oversupply
• Global Superpower Ranking Reveals Shifting Power Dynamics
• Oil Prices Decline As Investors Weigh China Stimulus
• Gold Prices Soar on Strong Demand From Hedge Funds and Central Banks
• BlackRock Sees AI Driving a 50% Jump in Asian Energy Demand
• Dow falls nearly 300 points to snap four-day win streak, S&P 500 retreats from record: Live updates
• Mortgage refinance boom takes hold, as weekly demand surges 20%
• Southwest Airlines to cut service and staffing in Atlanta to slash costs
• Surging AI demand could cause the world’s next chip shortage, research says
• Hidden Agendas: Beware Of The Government’s Push For A Digital Currency
• A port strike could be an economic ‘tsunami’ affecting these sectors
• The number of millionaire college athletes has tripled. Here are the top 10 earners this year.

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

• The Dow closed up 84 points or 0.20%, (Closed at 42,208, New Historic high 42,281)
• Nasdaq closed up 0.56%,
• S&P 500 closed up 0.25%, (Closed at 5,733, New Historic high 5,734)
• Gold $2,687 up $34.80,
• WTI crude oil settled at $72 up $1.17,
• 10-year U.S. Treasury 3.732 down 0.006 points,
• USD index $100.37 down $0.48,
• Bitcoin $64,378 up $991 or 1.56%,

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

Today’s Highlights

US stocks experienced modest gains on Tuesday, with both the S&P 500 and Dow Jones Industrial Average achieving record closes. Investor sentiment was bolstered by China’s announcement of significant stimulus measures aimed at revitalizing its economy, which had a positive ripple effect on global markets. Notably, US-listed Chinese e-commerce stocks surged, with JD.com seeing a nearly 14% jump following the news. However, this optimism was tempered by a decline in US consumer confidence; the Conference Board’s index fell to 98.7 in September from 105.6 in August, missing economists’ expectations. The Federal Reserve’s recent interest rate cuts also contributed to market positivity, despite some dissent among policymakers regarding inflation risks. Fed Governor Michelle Bowman expressed concerns about potential inflationary pressures following last week’s half-point rate cut.

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Click here to read our current Economic Forecast – September 2024 Economic Forecast: One Recession Flag Removed With Three Remaining

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

The Conference Board Consumer Confidence Index® fell in September 2024 to 98.7 (1985=100), from an upwardly revised 105.6 in August. Consumer Confidence has been little changed in the the last 2 years. Dana M. Peterson, Chief Economist at The Conference Board added:

Consumer confidence dropped in September to near the bottom of the narrow range that has prevailed over the past two years. September’s decline was the largest since August 2021 and all five components of the Index deteriorated. Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further. Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income. The drop in confidence was steepest for consumers aged 35 to 54. As a result, on a six-month moving average basis, the 35–54 age group has become the least confident while consumers under 35 remain the most confident. Confidence declined in September across most income groups, with consumers earning less than $50K experiencing the largest decrease. On a six-month moving average basis, consumers earning over $100K remained the most confident.

Richmond Fed manufacturing activity remained sluggish in September 2024. The composite manufacturing index edged down from −19 in August to −21 in September. Of its three component indexes, shipments decreased from −15 to −18, new orders increased from −26 to −23, and employment fell from −15 to −22. Manufacturing remains in a recession in the USA.

The S&P CoreLogic Case-Shiller 20-City Composite posted a year-over-year increase of 5.9% in July 2024, dropping from a 6.5% increase in the previous month. CoreLogic Chief Economist Dr. Selma Hepp explains:

With the summer characterized by broader cooling of housing demand amid high mortgage rates, home prices continued to weaken, and July monthly gains appear to be falling below the historical trend. Nevertheless, with a speedy decline in mortgage rates since August, housing market demand tracked by pending sales activity in CoreLogic data is finally showing signs of a rebound, which is expected to boost monthly price gains and return them to historical trends. Interestingly, the weakness in home prices remains in markets that have struggled with demand this year, including markets in Texas and Florida, while more expensive Western markets started to feel the pressure from rising rates in late spring. Going forward, home prices are likely to see a boost from a drop in mortgage rates and improved affordability.

Here is a summary of headlines we are reading today:

• Rising EV Charging Costs Threaten UK’s Electric Vehicle Adoption
• Saudi Aramco Looks To Raise $3 Billion from New Bond Issue
• Goldman Sees Upside for Oil Prices Amid Supply Concerns
• Coal’s Resurgence Challenges Global Energy Transition
• The U.S. Is the World’s Top Gasoline Exporter
• 81% of New Renewable Energy Capacity Added in 2023 Was Cheaper Than Fossil Fuels
• ‘Stop ripping us off’: Senate grills Novo Nordisk CEO on weight loss drug pricing
• September consumer confidence falls the most in three years
• S&P 500 rises to new record high Tuesday, posts back-to-back gains: Live updates
• ‘Childless cat lady’ is a more common lifestyle choice. Here’s what being child-free means for your money
• US accuses Visa of debit card monopoly
• Oil ends higher after back-to-back losses as China announces stimulus measures

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:

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

Today’s Highlights

The Dow Jones Industrial Average closed above 42,000 for the first time in history, marking a significant milestone. The S&P 500 also surged to record highs. This rally was primarily driven by the Federal Reserve’s decision to cut interest rates by 50 basis points, the first rate cut in over four years and growing optimism that the Fed’s rate cut will lead to a “soft landing” for the US economy. Strong performance from tech stocks, particularly the “Magnificent Seven” (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla). Positive economic data, including lower-than-expected jobless claims. The market’s reaction suggests investors are interpreting the Fed’s rate cut as a sign of confidence rather than panic about current economic conditions. Some analysts have revised their forecasts, with Bank of America now expecting further rate cuts by year-end. BMO Capital Markets raised its year-end S&P 500 target to 6,100, the highest among tracked strategists, citing surprising market strength and expectations of a soft landing.

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Click here to read our current Economic Forecast – September 2024 Economic Forecast: One Recession Flag Removed With Three Remaining

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

According to The Conference Board Leading Economic Index® (LEI) for the U.S. declined by 0.2% in August 2024 to 100.2 (2016=100), following an unrevised 0.6% decline in July. Over the six-month period between February and August 2024, the LEI fell by 2.3%, a smaller rate of decline than the 2.7% drop over the six-month period between August 2023 and February 2024. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board perspective:

In August, the US LEI remained on a downward trajectory and posted its sixth consecutive monthly decline. The erosion continued to be driven by new orders, which recorded its lowest value since May 2023. A negative interest rate spread, persistently gloomy consumer expectations of future business conditions, and lower stock prices after the early-August financial market tumult also weighed on the Index. Overall, the LEI continued to signal headwinds to economic growth ahead. The Conference Board expects US real GDP growth to lose momentum in the second half of this year as higher prices, elevated interest rates, and mounting debt erode domestic demand. However, in the Fed’s September 2024 Summary of Economic Projections, policymakers suggested 100 basis points of interest rate cuts are likely by the end of this year, which should lower borrowing costs and support stronger economic activity in 2025.

The September 2024 Philly Fed Manufacturing Business Outlook Survey showed that the general activity rose from -7.0 to 1.7 while the indexes for new orders and shipments declined and turned negative. To me, new orders and shipments mean that the manufacturing sector is in a recession.

Existing-home sales declined 4.2% year-over-year in August 2024. The median existing-home price for all housing types in August was $416,700, up 3.1% from one year ago ($404,200). NAR Chief Economist Lawrence Yun added:

Home sales were disappointing again in August, but the recent development of lower mortgage rates coupled with increasing inventory is a powerful combination that will provide the environment for sales to move higher in future months. The home-buying process, from the initial search to getting the house keys, typically takes several months.

In the week ending September 14, the advance figure for seasonally adjusted initial unemployment claims 4-week moving average was 227,500, a decrease of 3,500 from the previous week’s revised average. The previous week’s average was revised up by 250 from 230,750 to 231,000. No evidence of a recession in these numbers.

According to CoreLogic, Single-family rental prices increased 2.8% year over year in July 2024, down slightly from last month. Rental prices for low-end properties dropped -0.2%, while high-end properties saw rental prices increase 2.9% year over year. The perspective of Molly Boesel, principal economist for CoreLogic:

On the surface, single-family rent growth in July could be characterized as ‘average,’ with the annual and monthly national changes roughly equal to long-term levels. However, a deeper look reveals that rent changes slowed at the lowest end of the market, dropping 0.2% in July from a year earlier. While this drop might be due to a strong year-ago comparison, it is most likely a welcome relief to renters looking for rentals in the lower-priced end of the market.

Here is a summary of headlines we are reading today:

• How Renewables Could Slash Oil and Gas Production Emissions by 80%
• Biden’s Tariff Crackdown Upends Amazon and Walmart’s China Strategy
• UK Cracks Down on Iranian Oil Tycoon’s London Entity
• Rystad: Platform Electrification Could Slash Upstream Emissions by 86%
• Saudi Arabia’s Crude Oil Exports Slumped to an 11-Month Low in July
• European Carmakers Call for Urgent Action as EV Sales Crash
• The Fed has set out on a ‘recalibration’ of policy. Here’s what Powell’s new buzzword means
• Dow jumps 500 points, S&P 500 closes above 5,700 for the first time a day after Fed slashes rates: Live updates
• August home sales drop more than expected, as prices set a new record
• UAW warns of potential strikes at Ford, Stellantis a year after unprecedented work stoppages
• Bitcoin pops to $63,000 as investors digest long-awaited rate cut: CNBC Crypto World
• Oil Rally, Fueled By Fed, CTAs And Record Shorts, Has Room For More Gains
• Interest rates held at 5% but ‘on the path down’
• Why a recession still worries this stock-market veteran, despite the Fed’s rate cut
• Treasury yields end at highest levels in up to 2 weeks after jobless claims, Philadelphia Fed’s factory gauge

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

• The Dow closed down 103 points or 0.25%, (Closed at 41,503, New Historic high 41.982)
• Nasdaq closed down 0.31%,
• S&P 500 closed down 0.29%, (Closed at 5,618, New Historic high 5,690)
• Gold $2,575 down $17.00,
• WTI crude oil settled at $70 down $1.21,
• 10-year U.S. Treasury 3.713 up 0.071 points,
• USD index $100.99 up $0.09,
• Bitcoin $60,218 down $421 or 0.70%,

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

Today’s Highlights

The Federal Reserve cut interest rates by 0.5% on Wednesday, marking its first rate reduction since 2020. This decision was largely anticipated but exceeded some analysts’ expectations of a smaller 0.25% cut. Stocks initially rallied on the news but ended the session lower: The Fed cited increased confidence that inflation is moving toward its 2% target. The decision signals a shift in the Fed’s aggressive stance to combat inflation, which had previously led to rates reaching two-decade highs. This rate cut comes as the Fed aims to balance economic growth concerns with ongoing efforts to control inflation. The market’s mixed reaction reflects uncertainty about the implications of this policy shift for the broader economy. [see more below on the rate cut]

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Click here to read our current Economic Forecast – September 2024 Economic Forecast: One Recession Flag Removed With Three Remaining

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

Privately-owned housing units authorized by building permits in August 2024 were 6.5% below August 2023. Privately-owned housing starts 3.9% above August 2023. Privately-owned housing completions 30.2% above August 2023. To put this sector in perspective, housing completions are the highest seen since March 2007. Even permits are the highest seen since May 2007. In other words, this sector is one of the bright spots in today’s economy.

The Federal Reserve’s Federal Open Market Committee (FOMC) statement for the meeting ending today indicates a significant shift in the Federal Reserve’s monetary policy, with the first rate cut in several years, reflecting growing confidence in the progress of inflation control while maintaining a cautious stance on future economic developments. Key points of this statement:

• The economy continues to expand at a solid pace, although job gains have slowed. The unemployment rate has increased slightly but remains low overall
• Inflation has made further progress towards the Committee’s 2% objective but is still somewhat elevated
• The FOMC has decided to lower the target range for the federal funds rate by 0.5 percentage points, setting it at 4-3/4 to 5 percent. The Committee cites increased confidence in inflation moving sustainably toward 2% and judges that risks to achieving its employment and inflation goals are roughly balanced
• As always, the FOMC will continue to carefully assess incoming data, the evolving economic outlook, and the balance of risks when considering further adjustments to the federal funds rate
• The Committee will continue reducing its holdings of Treasury securities, agency debt, and agency mortgage-backed securities
• The decision was not unanimous. Michelle W. Bowman voted against the action, preferring a smaller rate cut of 0.25 percentage points

The Federal Open Market Committee (FOMC) has released its latest economic projections for the United States economy. These projections suggest that the FOMC expects a gradual improvement in economic conditions, with inflation moving towards the 2% target over the next few years and a slight decrease in unemployment rates. The federal funds rate is projected to decrease gradually, indicating a potential easing of monetary policy in the coming years. Here’s a summary of the key points:

Economic Growth (GDP)
The median projection for real GDP growth:
2024: 1.5%
2025: 1.8%
2026: 1.9%
Longer run: 1.8%

Unemployment Rate
The median projection for the unemployment rate:
2024: 4.1%
2025: 4.1%
2026: 4.0%
Longer run: 4.0%

Inflation
The median projection for PCE inflation:
2024: 2.5%
2025: 2.2%
2026: 2.0%
Longer run: 2.0%

For core PCE inflation (excluding food and energy):

2024: 2.6%
2025: 2.3%
2026: 2.1%

Federal Funds Rate
The median projection for the federal funds rate:
2024: 5.1%
2025: 3.9%
2026: 3.4%
Longer run: 2.5%

The Port of Los Angeles and the Port of Long Beach is a crucial gateway for international trade in the United States. It handles approximately 29% of all containerized international waterborne trade in the U.S. The container traffic data from these ports is often used as a leading indicator for economic trends as it can signal changes in consumer demand and retail activity and fluctuations in container counts can reflect broader economic cycles and global trade patterns. Well in August 2024. Import container counts are up 27% year-over-year – and stands as the third highest import level in history. Export container counts are up 4% year-over-year but remains in a long term decline. The bottom line is that import growth means that the economy is improving and as the industrial production is NOT growing – Americans desire for foreign goods is increasing.

Here is a summary of headlines we are reading today:

• Oil Prices Rise on Jumbo Fed Rate Cut
• Why the EU is Falling Behind in the Global AI Race
• China’s Gasoline Exports Plunge 44% on Loss-Making Margins
• Goldman Sachs: Iron Ore Prices to Fall to $85
• Europe’s Natural Gas Demand and Inventories Rose in July
• Russia’s Oil Revenues Have Dropped by 30% Since June
• Fed meeting recap: Chair Jerome Powell defends central bank’s decision to go big with first cut
• Fed slashes interest rates by a half point, an aggressive start to its first easing campaign in four years
• Dow closes lower, giving up 375-point pop after big Fed rate cut: Live updates
• Traders got their big-rate-cut wish and markets still couldn’t rally
• Bitcoin whipsaws after Fed cuts interest rates for the first time in four years: CNBC Crypto World
• New Wave Of Blasts Rock Beirut For 2nd Day: Hand-Held Radios Explode, Over 300 Wounded
• Treasury-bill rates tumble after Fed delivers biggest interest-rate cut in 16 years
• Moody’s lifts outlook on four big regional banks to stable from negative

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

• The Dow closed down 16 points or 0.04%, (Closed at 41,606, New Historic high 41.835)
• Nasdaq closed up 0.20%,
• S&P 500 closed up 0.03%,  (Closed at 5,635, New Historic high 5,671)
• Gold $2,595 down $13.90,
• WTI crude oil settled at $71 up $1.27,
• 10-year U.S. Treasury 3.644 up 0.023 points,
• USD index $100.98 up $0.22,
• Bitcoin $59,743 up $1,826 or 3.14%,

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

Today’s Highlights

Stocks finished mostly flat on Tuesday as investors remained uncertain about the size of the Federal Reserve’s expected interest rate cut, which is set to be announced on Wednesday. Federal Reserve Meeting The Fed’s two-day policy meeting began on Tuesday, with a rate cut decision expected on Wednesday. Investors are debating whether the Fed will cut rates by 0.25% or 0.50%. As of Tuesday afternoon, traders saw a 65% chance of a 0.50% cut and a 35% chance of a 0.25% cut. Economic Data August retail sales data came in stronger than expected, potentially influencing the Fed’s decision. This was the last major economic report before the Fed’s announcement. Intel shares rose after securing Amazon as a customer for AI chips from its foundry business. Microsoft stock gained after announcing a new $60 billion share buyback program and a 10% dividend increase.

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Click here to read our current Economic Forecast – September 2024 Economic Forecast: One Recession Flag Removed With Three Remaining

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

Advance estimates of U.S. retail and food services sales for August 2024 is up 2.1% from August 2023 – up 1.3% inflation-adjusted. Seems to me there is no trend line which means a continuation of the weak retail sales growth going forward.

In August 2024, industrial production rose 0.0% year-over-year with components manufacturing up 0.2% year-over-year, utilities down 0.9% year-over-year, and mining up 0.1% year-over-year. Capacity utilization moved up to 78.0 percent in August, a rate that is 1.7 percentage points below its long-run (1972–2023) average. I see literally no re-shoring of manufacturing capacity – and manufacturing remains in a recession in the US.

Here is a summary of headlines we are reading today:

• Which Industries Perform Best and Worst After Interest Rate Cuts?
• Can Spain Achieve its 11 GW Hydrogen Target by 2030?
• New Owner of Baker Hughes’ Russian Assets Raises Well Inventory
• The Latest Oil Price Crash Appears to Have Come to an End
• U.S. Energy Department Short on Cash to Refill SPR at Low Prices
• S&P 500 closes little changed Tuesday after notching all-time high ahead of key Fed decision: Live updates
• The Fed’s biggest interest rate call in years happens Wednesday. Here’s what to expect
• Stock market setting itself up for disappointment as it hits all-time high ahead of the Fed
• Bitcoin climbs above $60,000 ahead of Fed rate decision
• Struggling bitcoin miners may be revived by Fed rate decision, regardless of cut size

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