EconCurrents

Summary Of the Markets Today:

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

Today’s Economic Releases:

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

Summary Of the Markets Today:

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

Today’s Economic Releases:

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

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

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

Summary Of the Markets Today:

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

Today’s Economic Releases:

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

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

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

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

Summary Of the Markets Today:

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

Today’s Economic Releases:

A summary of headlines we are reading today:

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

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