EconCurrents

Summary Of the Markets Today:

• The Dow closed down 178 points or 0.43%, (Closed at 40,713, New Historic high 41.027)
• Nasdaq closed down 1.67%,
• S&P 500 closed down 0.89%, (Closed at 5,571, New Historic high 5,643)
• Gold $2,518 down $29.40,
• WTI crude oil settled at $73 up $0.95,
• 10-year U.S. Treasury 3.862 up 0.086 points,
• USD index $101.53 up $0.49,
• Bitcoin $60,314 down $657 or 1.07%,

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

Today’s Highlights:

U.S. stocks declined on Thursday, with technology stocks leading the losses as investors turned their attention to Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium on Friday.  Market Dynamics: The market’s focus has shifted to the Fed’s Jackson Hole symposium, which began on Thursday. Investors are particularly interested in any potential changes in tone from policymakers during Powell’s speech on Friday. This comes after minutes from the Fed’s last meeting revealed that several officials were open to a July rate cut, suggesting a possible pivot in next month’s policy decision. Economic Data: New data from the Department of Labor showed 232,000 initial jobless claims for the week ending August 17, slightly up from the previous week and in line with economists’ expectations. This data has gained increased attention following an official revision to payrolls that indicated the labor market may have been cooling earlier than initially thought. Rate Cut Expectations: Market expectations for interest rate cuts have been fluctuating. While there were earlier hopes for a 0.5% reduction, recent developments have tempered these expectations. Currently, markets are pricing in just a 25% chance of a 50 basis point cut at the Fed’s September meeting, down from 38% the previous day.The upcoming speech by Powell at Jackson Hole is highly anticipated, as investors look for any signals that might contradict or confirm the market’s current optimistic outlook on rate cuts.

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Click here to read our current Economic Forecast – August 2024 Economic Forecast: New Recession Flag

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

The Chicago Fed National Activity Index (CFNAI) three-month moving average, CFNAI-MA3, was unchanged at –0.06 in July 2024 which implies the economy is not recessionary but is in the neighborhood of weak expansion. Twenty-eight of the 85 individual indicators made positive contributions to the CFNAI in July, while 57 made negative contributions. Thirty-one indicators improved from June to July, while 53 indicators deteriorated and one was unchanged. Of the indicators that improved, 12 made negative contributions.

Existing-home sales improved in July 2024 but year-over-year sales fell 2.5%. Total housing inventory was up 19.8% from one year ago with unsold inventory sits at a 4.0-month supply at the current sales pace, down from 4.1 months in June but up from 3.3 months in July 2023. The median existing-home price for all housing types in July was $422,600, up 4.2% from one year ago ($405,600). Note that existing home sales are not a component of GDP.  NAR Chief Economist Lawrence Yun added:

Despite the modest gain, home sales are still sluggish. But consumers are definitely seeing more choices, and affordability is improving due to lower interest rates.

The Kansas City Fed’s manufacturing activity declined less in August 2024 than in July. The month-over-month composite index was -3 in August, up from -13 in July and -8 in June . Manufacturing remains the soft spot in the current economy.

In the week ending August 17, the advance figure for seasonally adjusted initial unemployment claims 4-week moving average was 236,000, a decrease of 750 from the previous week’s revised average. The previous week’s average was revised up by 250 from 236,500 to 236,750. There is no indication in unemployment numbers that a recession is in view.

Here is a summary of headlines we are reading today:

• Oil Buying Opportunity May Have Arrived: Citi
• Is China’s Steel Industry on the Brink of a Major Crisis?
• Experts Skeptical of Lasting Cease-Fire Between Israel and Hamas
• Global Offshore Wind Installations to Surpass 520 GW by 2040
• Ford’s $5 Billion EV Loss Sparks Strategic Shift Towards Hybrids
• Fed Minutes Signal September Rate Cut
• Stocks close lower, Nasdaq slides 1% as Treasury yields rise and Powell speech looms: Live updates
• Peloton shares soar 35% as turnaround plan takes hold, losses shrink
• FDA approves updated Pfizer, Moderna Covid vaccines as virus surges; shots to be available within days
• Philadelphia Fed President Harker advocates for interest rate cut in September
• Stocks making the biggest moves midday: Urban Outfitters, Peloton, Advance Auto Parts and more
• ‘No Israeli Withdrawal, No Ceasefire Deal’: Hamas
• Treasury yields jump by most in at least a week after fresh data ease near-term recession concerns
• Is the August stock-market volatility behind us? This key indicator says not yet.

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:

• The Dow closed up 56 points or 0.14%, (Closed at 40,890, New Historic high 40.974)
• Nasdaq closed up 0.57%,
• S&P 500 closed up 0.42%, (Closed at 5,621, New Historic high 5,633)
• Gold $2,550 down $0.60,
• WTI crude oil settled at $72 down $1.22,
• 10-year U.S. Treasury 3.801 down 0.017 points,
• USD index $101.19 down $0.25,
• Bitcoin $61,550 up $2,528 or 4.28%,

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

Today’s Highlights:

U.S. stocks closed higher on Wednesday, marking a rebound after breaking their longest winning streak of the year. This upward movement came as investors analyzed the Federal Reserve’s latest meeting minutes, which indicated that most officials support a potential rate cut in September if inflation continues to decline. The market’s focus has shifted towards the labor market’s impact on Fed policy, especially as new data revealed that the U.S. economy had 818,000 fewer jobs than previously reported as of March 2024. Despite this adjustment, economists noted that the labor market is softening but not in a state of rapid decline. Investors remain cautious ahead of Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium, with heightened expectations for a September rate cut. In corporate news, Target’s shares surged over 11% after reporting earnings that exceeded Wall Street expectations, while Macy’s shares fell nearly 13% following a sales decline. Overall, the S&P 500 is now less than 1% away from its all-time high, reflecting a broader recovery trend in the market.

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Click here to read our current Economic Forecast – August 2024 Economic Forecast: New Recession Flag

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

The Bureau of Labor Statistics (BLS) has benchmarked the establishment survey with the results released today. These revised counts are derived from state unemployment insurance (UI) tax records that nearly all employers are required to file. This had lead to significant downward revisions to previously reported employment gains, indicating a slower job growth than initially estimated. My take on  this revision

Major Revision Details

The BLS revised job gains downward by 818,000 for the 12-month period ending in March 2024. This substantial adjustment represents a reduction of 0.5% of total employment from April 2023 to March 2024.

Sector-Specific Impacts

The revision affected various sectors differently:

• • Professional and business services saw the largest absolute decrease, with 358,000 fewer jobs than previously reported.
  • Leisure and hospitality followed with a reduction of 150,000 jobs.
  • The information sector experienced the most significant percentage decline at 2.3%.

Economic Implications

This revision has several implications for the economy:

1. 1. It suggests that job growth was slower than initially thought, with approximately 2.1 million jobs created in the year ending March 2024.
   2. The unemployment rate has remained relatively stable at around 4%, despite the downward revision.
   3. The revision has added to concerns about a potential economic slowdown.
   4. It has sparked discussions about whether the Federal Reserve should have considered cutting interest rates sooner.

The Federal Reserve today released the minutes of the Federal Open Market Committee for the meetings held on July 30–31, 2024. There seems to be a sense when reading the minutes, that the Federal Reserve is close to reducing the federal funds rate by 25 basis points – likely at their next meeting. Highlights of the minutes:

Participants observed that inflation had eased over the past year but remained elevated and that, in recent months, there had been some further progress toward the Committee’s 2 percent inflation objective … participants judged that recent data had increased their confidence that inflation was moving sustainably toward 2 percent. Almost all participants observed that the factors that had contributed to recent disinflation would likely continue to put downward pressure on inflation in coming months … 

Participants assessed that supply and demand conditions in the labor market had continued to come into better balance. The unemployment rate had moved up but remained low, having risen 0.7 percentage point since its trough in April 2023 to 4.1 percent in June … Regarding the outlook for the labor market, participants discussed various indicators of layoffs, including initial claims for unemployment benefits and measures of job separations. Some participants commented that these indicators had remained at levels consistent with a strong labor market …

participants observed that consumer spending had slowed from last year’s robust pace, consistent with restrictive monetary policy, easing of labor market conditions, and slowing income growth. They noted, however, that consumer spending had still grown at a solid pace in the first half of the year, supported by the still-strong labor market and aggregate household balance sheets … 

Participants discussed the risks and uncertainties around the economic outlook. Upside risks to the inflation outlook were seen as having diminished, while downside risks to employment were seen as having increased. Participants saw risks to achieving the inflation and employment objectives as continuing to move into better balance, with a couple noting that they viewed these risks as more or less balanced … 

Some participants observed that the banking system was sound but noted risks associated with unrealized losses on securities, reliance on uninsured deposits, and interconnections with nonbank financial intermediaries … Participants generally noted that some banks and nonbank financial institutions likely have vulnerabilities associated with high CRE exposures through loan portfolios and holdings of CMBS … 

In their consideration of monetary policy at this meeting, participants observed that recent indicators suggested that economic activity had continued to expand at a solid pace, job gains had moderated, and the unemployment rate had moved up but remained low. While inflation remained somewhat above the Committee’s longer-run goal of 2 percent, participants noted that inflation had eased over the past year and that recent incoming data indicated some further progress toward the Committee’s objective. All participants supported maintaining the target range for the federal funds rate at 5-1/4 to 5-1/2 percent, although several observed that the recent progress on inflation and increases in the unemployment rate had provided a plausible case for reducing the target range 25 basis points at this meeting or that they could have supported such a decision … 

Many participants noted that reducing policy restraint too late or too little could risk unduly weakening economic activity or employment. A couple participants highlighted in particular the costs and challenges of addressing such a weakening once it is fully under way. Several participants remarked that reducing policy restraint too soon or too much could risk a resurgence in aggregate demand and a reversal of the progress on inflation. These participants pointed to risks related to potential shocks that could put upward pressure on inflation or the possibility that inflation could prove more persistent than currently expected.

Here is a summary of headlines we are reading today:

• Investors Are Flocking to Gold
• EU Slashes Proposed Tariffs on Tesla’s China-Made EVs
• Nigeria’s Massive Dangote Refinery Taking Less American Crude
• Will Buffett Step in to Keep Occidental Afloat?
• Oil Ticks Higher as EIA Reports Inventory Draws Across the Board
• Texas Faces Growing Electricity Needs
• Fed minutes point to ‘likely’ rate cut coming in September
• Nonfarm payroll growth revised down by 818,000, Labor Department says
• U.S. job growth revised down by the most since 2009. Why this time is different
• Epic Systems is building more than 100 new AI features for doctors and patients. Here’s what’s coming
• ‘The Descent Is Upon Us’: Forget The Sahm Rule, This Indicator Has Perfectly Predicted Every US Recession Since 1930
• Red-hot rent rises cool but tenants still struggling

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:

• The Dow closed down 62 points or 0.15%, (Closed at 39,835, New Historic high 40.909)
• Nasdaq closed down 0.33%,
• S&P 500 closed down 0.20%, (Closed at 5,597, New Historic high 5,621)
• Gold $2,523 up $11.30,
• WTI crude oil settled at $74 down $0.55,
• 10-year U.S. Treasury 3.818 down 0.049 points,
• USD index $101.41 down $0.48,
• Bitcoin $59,498 up $46 or 0.08%,

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

Today’s Highlights:

Markets experienced a pause on Tuesday, marking the end of their longest rally this year, as all three major indexes closed lower. The S&P 500 concluded an eight-day streak of gains – the longest since November. Investor attention is now shifting towards Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole Economic Symposium later this week. This event is anticipated to provide insights into potential interest rate cuts, with many expecting Powell to signal a September reduction amid recent positive economic data that supports easing monetary policy. Analysts speculate that a modest cut of 0.25% is likely, while some suggest a more significant 0.5% reduction could be on the table, depending on future labor market reports.In corporate news, Lowe’s saw its stock decline after the company revised its annual profit and sales forecasts downward, reflecting weaker consumer demand for large purchases. In contrast, gold prices continued to rise, surpassing $2,520 per ounce, driven by geopolitical tensions and the prospect of lower interest rates enhancing its appeal as a safe-haven asset.

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Click here to read our current Economic Forecast – August 2024 Economic Forecast: New Recession Flag

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

no releases today

Here is a summary of headlines we are reading today:

• Negative Power Prices Hit Europe as Renewable Energy Floods the Grid
• Lithium Market Potential: Evaluating Supply and Demand Dynamics
• China’s Coal Production Surges to Meet Energy Demands
• Oil Prices Fall As Middle East Worries Ease
• Traders Look for Bullish Cues Ahead of Crucial Fed Meeting
• S&P 500, Nasdaq snap eight-day winning streak as rebound rally pauses: Live updates
• Wyoming blockchain summit kicks off ahead of Fed’s Jackson Hole meeting: CNBC Crypto World
• Morgan Stanley International chair among 6 missing after luxury yacht sinks in Sicily
• General Atlantic set to sell up to 5.1% stake in PNB Housing via open market on Wednesday
• Cyient to sell 14.5% stake in arm Cyient DLM via block deal on Wednesday

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:

• The Dow closed up 237 points or 0.58%, (Closed at 39,896, New Historic high 40.907)
• Nasdaq closed up 1.39%,
• S&P 500 closed up 0.97%, (Closed at 5,559, New Historic high 5,603)
• Gold $2,543 up $5.70,
• WTI crude oil settled at $74 down $2.23,
• 10-year U.S. Treasury 3.875 down 0.017 points,
• USD index $101.88 down $0.59,
• Bitcoin $58,897 up $459 or 0.79%,

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

Today’s Highlights:

US stocks experienced a strong rally on Monday, closing at session highs and marking their best week in a year.

Key Drivers of the Rally:

• Technology and Consumer Discretionary Stocks: These sectors led the gains, with the S&P 500 achieving its longest winning streak since November, now at eight consecutive days. Notably, Nvidia and Tesla saw significant increases in their stock prices, contributing to the Nasdaq’s performance.
• Market Recovery: This upswing follows a period of volatility earlier in August, where concerns about a potential recession had led to a sell-off. Recent data indicating improved inflation and consumer spending have helped ease these fears.

Economic Outlook:

Investor sentiment is shifting towards optimism regarding the economy, with Goldman Sachs reducing its recession forecast from 25% to 20% over the next year. There is growing speculation about the Federal Reserve’s next moves, with traders anticipating a 72% chance of a 0.25% interest rate cut in September.

Upcoming Events: 

Attention is now focused on Fed Chair Jerome Powell’s upcoming speech at the Jackson Hole symposium, which could provide further insights into monetary policy. Additionally, the Democratic National Convention is underway, potentially influencing political and economic expectations.Overall, the stock market’s recent performance reflects a recovery from earlier losses and a more stable outlook for the economy.

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Click here to read our current Economic Forecast – August 2024 Economic Forecast: New Recession Flag

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

The Conference Board Leading Economic Index® (LEI) for the U.S. fell by 0.6 percent in July 2024 to 100.4 (2016=100), following a decline of 0.2 percent in June. Over the six-month period ending in July 2024, the LEI fell by 2.1 percent, a smaller rate of decline than its −3.1 percent over the six-month period between July 2023 and January 2024. Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board perspective:

The LEI continues to fall on a month-over-month basis, but the six-month annual growth rate no longer signals recession ahead. In July, weakness was widespread among non-financial components. A sharp deterioration in new orders, persistently weak consumer expectations of business conditions, and softer building permits and hours worked in manufacturing drove the decline, together with the still-negative yield spread. These data continue to suggest headwinds in economic growth going forward. The Conference Board expects US real GDP growth to slow over the next few quarters as consumers and businesses continue cutting spending and investments. US real GDP is expected to expand at a pace of 0.6 percent annualized in Q3 2024 and 1 percent annualized in Q4.

Here is a summary of headlines we are reading today:

• Aluminum Prices Continue to Slide
• WTI Sheds Nearly 3% as China Demand Dulls
• Russian Oil Depot Fire Rages on After Ukraine Drone Attack
• A Strong HODLing Trend Emerges in Bitcoin
• U.S. Gasoline Prices Fall to Lowest Since March, Diesel Hits Multi-Year Lows
• Colombia Bans Coal Exports to Israel
• S&P 500, Nasdaq post eighth positive session as stocks extend their winning run: Live updates
• SEC charges Carl Icahn with hiding billions in loans backed by IEP stock
• Import Volumes Surge At Nation’s Busiest West Coast Ports Amid Strike & Global Trade War Fears
• Energy prices forecast to rise by 9% in October
• Nvidia’s stock is up 30% from August lows — and earnings could further its momentum
• Treasury yields hold in narrow range as investors await Fed’s Jackson Hole conference
• The Fed’s big hole en route to Jackson Hole: getting out of its own way

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