Category Archives: Daily Insights

Market Insights 9/19/2019

U.S. equities finished mixed after a choppy session, as investors weighed a host of monetary policy announcements released this week, the Fed’s intervention in the overnight lending markets for a third-straight day, and continued upbeat domestic economic data.

Treasury yields finished little changed and the U.S. dollar was slightly lower after existing home sales unexpectedly rose to its highest level since March 2018, jobless claims nudged higher and regional manufacturing activity remained in expansion territory and above forecasts.

Meanwhile, crude oil and gold prices rose.

The Markets…

The Dow Jones Industrial Average fell 52 points (0.2%) to 27,095

The S&P 500 Index was unchanged at 3,007

The Nasdaq Composite rose 6 points (0.1%) to 8,183

In moderate volume, 808 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq

WTI crude oil ticked $0.15 higher to $58.19 per barrel and wholesale gasoline gained $0.04 to $1.70 per gallon

The Bloomberg gold spot price increased $4.31 to $1,498.31 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.2% at 98.34

Leading Indicators flat, existing home sales unexpectedly rise, jobless claims tick higher

The Conference Board’s Index of Leading Economic Indicators (LEI) for August was flat month-over-month versus the Bloomberg projection of a 0.1% dip and compared to July’s downward-revised 0.4% gain. Positive contributions from the building permits, credit and average workweek components of the index were offset by declines for ISM new orders, stock prices, jobless claims and the yield curve.

Existing-home sales rose 1.3% m/m in August to an annual rate of 5.49 million units—the highest since March 2018—compared to expectations of a decline to 5.38 million units from July’s unrevised 5.42 million rate. Sales of single-family homes were higher m/m and versus year-ago levels, while purchases of condominiums and co-ops rose m/m and were little changed y/y. The median existing-home price increased 4.7% from a year ago to $278,200, marking the 90th straight month of y/y gains.

National Association of Realtors Chief Economist Lawrence Yun said, “Buyers are finding it hard to resist the current rates, and the desire to take advantage of these promising conditions is leading more buyers to the market.” However, he cautioned that inventories remain low and are pushing up home prices.

Weekly initial jobless claims rose by 2,000 to 208,000, versus the Bloomberg estimate of 213,000, with the prior week’s figure being revised higher by 2,000 to 206,000. The four-week moving average dipped by 750 to 212,250, while continuing claims declined by 13,000 to 1,661,000, south of estimates of 1,672,000.

Treasuries finished nearly flat, as the yields on the 2-year note and the 30-year bond were unchanged at 1.75% and 2.24%, respectively, while the yield on the 10-year note ticked 1 basis point higher to 1.79%.

Stocks fell after a bumpy session and bond yields were flat after a recent surge, while the U.S. dollar saw pressure and crude oil prices gained modest ground after a wild week, with the global markets grappling with heightened geopolitical concerns and digesting a host of monetary policy decisions, headlined by yesterday’s 25 bp rate cut by the Federal Open Market Committee (FOMC).

Europe higher as financials and energy stocks gain ground, Asia mixed

European equities were higher, with financials gaining ground, along with bond yields in the region and as some of last week’s new stimulus measures from the European Central Bank started to kick in. The markets also digested unchanged monetary policy decisions from the Bank of England (BoE) and out of Switzerland, which followed today’s unchanged stance from the Bank of Japan and yesterday’s expected rate cut out of the U.S.

The BoE noted today that inflation may be cooler than expected amid festering uncertainty regarding the U.K.’s exit from the European Union, known as Brexit, as an October 31st deadline approaches, which could keep economic activity below potential and limit domestically-generated inflationary pressures.

The euro rose versus the U.S. dollar and the British pound nudged higher. In other economic news in the region, U.K. retail sales in August were a bit softer than anticipated. The energy sector is also gaining ground as crude oil prices are rising amid a wild week that has come courtesy of the attacks on Saudi Arabian oil facilities over the weekend.

Stocks in Asia finished mixed as the markets digested an expected rate cut out of the U.S. yesterday, which was followed by today’s Bank of Japan (BoJ) decision to keep its stance steady. Yesterday the Fed’s rate cut was met with some dissention, while the BoJ said today it is becoming necessary to pay closer attention to the possibility that the momentum toward achieving the price stability target will be lost. The BoJ added that it will reexamine economic and price developments at the next monetary policy meeting, when it updates the outlook for economic activity and prices.

Stocks in Japan gained ground, even as the yen recovered a bit from a recent slide, while emerging markets were volatile, with those traded in Hong Kong and India dropped sharply.

Mainland Chinese equities and shares in South Korea moved higher, while securities in Australia also advanced following some mixed August employment data.

Market Insights 9/18/2019

U.S. equities finished mixed in choppy action after the Fed cut the target for its fed funds rate, as widely expected, but indicated division as to future actions.

Treasury yields reversed course to end mixed following the rate decision and crude oil prices again pared back from Monday’s spike as Saudi Arabia suggested a return to normal output levels sooner than expected after the weekend attack on some of its key oil facilities.

The U.S. dollar was higher, but gold ended lower.

The Markets…

The Dow Jones Industrial Average rose 36 points (0.1%) to 27,147

The S&P 500 Index added 1 point to 3,007

The Nasdaq Composite decreased 9 points (0.1%) to 8,177

In moderate volume, 842 million shares were traded on the NYSE and 2.0 billion shares changed hands on the Nasdaq

WTI crude oil fell $1.23 to $58.11 per barrel and wholesale gasoline lost $0.02 to $1.66 per gallon

The Bloomberg gold spot price decreased $6.84 to $1,494.54 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.3% at 98.90

Fed cuts rates, but doubt surrounds future moves

The Federal Open Market Committee (FOMC) concluded its two-day monetary policy meeting, announcing a 25 basis point reduction to its target range for the Fed funds rate to 1.75%-2.00%. The Committee cited “the implications of global developments for the economic outlook as well as muted inflation pressures” as the primary reason for the move.

Information received since it met in July indicates that, “the labor market remains strong and that economic activity has been rising at a moderate rate,” with job gains remaining solid and the unemployment rate low. The Committee added that, “Although household spending has been rising at a strong pace, business fixed investment and exports have weakened, and that overall inflation and inflation for items other than food and energy are running below 2 percent.

The decision was not unanimous, indicating a widening divide among Members over future actions, as St. Louis Fed President James Bullard preferred a 50 bp cut, while Kansas City Fed President Esther George and Boston Fed President Eric Rosengren favored no change to the current target. As well, the Committee’s projected rate increases, known as the “dots plot,” continued to show sharp divisions among Members with regards to the path of rate moves, with nearly half expecting no additional cuts, while a little more than half expect one more cut this year.

Treasuries reversed course to finish mixed following the Fed announcement, as the yield on the 2-year note rose 3 bps to 1.76%, while the yields on the 10-year note and the 30-year bond declined 3 bps to 1.79% and 2.25%, respectively.

Europe modestly higher with monetary policy decisions looming, Asia mixed

European equities nudged higher, with the energy sector rising despite crude oil prices continuing to trim its spike on Monday, as Saudi Arabia suggested output could return to normal levels sooner than expected after oil facilities were attacked over the weekend.

The global markets seemed to tread with some caution ahead of today’s monetary policy decision out of the U.S., which will be followed up by announcements from the Bank of Japan and Bank of England (BoE) tomorrow. U.K. Brexit uncertainty continued to fester as Prime Minister Boris Johnson looks to find an exit deal ahead of the October 31st deadline on the heels of meetings with the European Union.

Ahead of the BoE’s decision, U.K. inflation statistics came in mostly cooler than expected for August. In other economic news, Eurozone construction output fell m/m in July and core consumer price inflation rose in line with expectations. The euro and British pound lost ground versus the U.S. dollar and bond yields in the region were lower.

Stocks in Asia finished mixed, with the energy markets choppy in the wake of the wild swings in crude oil prices on the heels of the recent attack on Saudi Arabian oil facilities and as the region suggested output could return to normal levels sooner than expected.

Also, the global markets appeared a bit cautious ahead of today’s monetary policy decision out of the U.S., which will be followed by tomorrow’s decisions out of Japan and the U.K. Stocks in Japan edged lower, with the yen choppy ahead of the Fed’s decision and as the nation’s exports continued to fall in August but at a smaller rate than projected.

Mainland Chinese equities rose, but those traded in Hong Kong dipped. South Korean securities advanced and Australian listings traded to the downside, while shares in India moved higher.

Market Insights 9/17/2019

U.S. stocks were modestly higher with the global markets exhibiting caution ahead of tomorrow’s Fed monetary policy decision.

Geopolitical concerns continued after the weekend’s attack on Saudi Arabian oil facilities. Crude oil prices gave back some of yesterday’s surge amid reports that Saudi Arabian output may be restored to normal sooner than expected.

Treasury yields and the U.S. dollar were lower, while gold rose.

The Markets…

The Dow Jones Industrial Average rose 34 points (0.1%) to 27,111

The S&P 500 Index added 8 points (0.3%) to 3,006

The Nasdaq Composite increased 32 points (0.4%) to 8,186

In moderate volume, 813 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq

WTI crude oil tumbled $3.56 to $59.34 per barrel and wholesale gasoline lost $0.07 to $1.68 per gallon

The Bloomberg gold spot price increased $3.11 to $1,501.54 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.4% at 98.23

Industrial production and homebuilder sentiment both improve, Fed meeting set to begin

The Federal Reserve’s industrial production rose 0.6% month-over-month in August, above the Bloomberg estimate of a 0.2% increase, and July’s upwardly-adjusted 0.1% dip. Manufacturing, mining and utilities output all grew. Capacity utilization increased to 77.9% from the prior month’s unrevised 77.5% rate, and versus the expected 77.6%. Capacity utilization is 1.9 percentage points below its long-run average.

The National Association of Home Builders (NAHB) Housing Market Index showed homebuilder sentiment in September improved to 68 from August’s upwardly-revised 67 level, compared to forecasts of 66, with a level of 50 separating good and poor conditions. This was the eighth-straight month the index has been north of 60. The NAHB noted that, “Builders’ optimism in recent months is being fueled by low interest rates and solid home buyer demand.

Treasuries were higher, as the yield on the 2-year note declined 3 basis points to 1.72%, while the yields on the 10-year note and the 30-year bond dropped 4 bps to 1.81% and 2.27%, respectively.

Geopolitical concerns remain elevated after the attack on Saudi Arabian oil facilities over the weekend, while the markets were likely cautious as the Fed began its two-day monetary policy meeting.

U.S. equity indexes have emerged out of their recent trading range, but persistent economic and trade uncertainties have not subsided. Clearly, the economic picture is mixed, as manufacturing continues to weaken but the consumer/services segments remain strong. Most Fed watchers expect a 25bp cut tomorrow. Chairman Jerome Powell has downplayed expectations of a rate-cutting cycle, calling the July cut a “mid-cycle adjustment;” and some Fed Presidents, such as Eric Rosengren, have pointed to gradual increases in wages and prices to justify holding rates steady. Doing so could disappoint investors and result in increased volatility. Regardless, we still have doubts that rate cuts is the medicine for what ails the economy.

Europe and Asia mixed on heightened geopolitical tensions and ahead of Fed

European equities finished mixed, with the markets grappling with heightened geopolitical tensions after the attack on Saudi Arabian oil facilities over the weekend the sent crude oil prices spiking yesterday. Also, the markets likely traded cautiously as tomorrow’s monetary policy decision out of the U.S. looms, and will be followed by decisions out of Japan and from the Bank of England. September German investor sentiment figures were released, with confidence regarding the current situation falling more than expected but the expectations component slipping slightly less than anticipated.

The euro rose versus the U.S. dollar and bond yields in the region were mixed. The British pound also gained ground, modestly adding to a recent run as Brexit uncertainty continued to fester.

Stocks in Asia finished mixed, with the markets digesting yesterday’s spike in oil prices as geopolitical concerns increased in the wake of the weekend’s attack on Saudi Arabian oil facilities, while caution likely set in ahead of tomorrow’s monetary policy decision out of the U.S. Chinese data continues to suggest slowing economic activity as the nation reported a deceleration in August home prices, which came on the heels of the weekend’s softer-than-expected reads on industrial production, retail sales and fixed asset investment. Stocks in Japan ticked higher, with the yen continuing to slip as the markets returned to action following yesterday’s holiday.

Market Insights 9/16/2019

U.S. equities began the new week on a down note amid heightened geopolitical concerns after a Saudi Arabian oil facility was attacked over the weekend, which in turn sent crude oil prices soaring.

Treasury yields fell, giving back some of a recent jump, and the U.S. dollar was higher, with a read on regional manufacturing activity slowing more than expected but remained in expansion territory, while gold gained ground.

The Markets…

The Dow Jones Industrial Average fell 143 points (0.5%) to 27,077

The S&P 500 Index lost 10 points (0.3%) to 2,998

The Nasdaq Composite declined 23 points (0.3%) to 8,154

In moderately-heavy volume, 909 million shares were traded on the NYSE and 1.8 billion shares changed hands on the Nasdaq

WTI crude oil rallied $8.04 $62.90 per barrel and wholesale gasoline jumped $0.20 to $1.75 per gallon

The Bloomberg gold spot price increased $11.19 to $1,499.72 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was up 0.4% at 98.61

Regional manufacturing activity slows more than expected to start the week

The Empire Manufacturing Index showed output from the New York region decelerated more than expected but remained in expansion territory (a reading above zero) for September. The index declined to 2.0 from August’s 4.8 level, with the Bloomberg forecast calling for a decline to 4.0.

Treasuries rose after last week’s drop, as the yield on the 2-year note declined 4 basis points to 1.75%, while the yields on the 10-year note and the 30-year bond dropped 6 bps to 1.84% and 2.31%, respectively.

Tomorrow, the economic calendar will begin to heat up, as the Federal Open Market Committee (FOMC) will begin its two-day monetary policy meeting, while the Fed’s industrial production and capacity utilization report is slated for release, forecasted to show production increased 0.2% m/m for August and utilization nudged higher to 77.6%.

Europe lower, Asia mixed on heightened geopolitical tensions, Chinese data and Brexit focus

European equities finished lower, though the energy sector rallied as crude oil prices surge amid heightened geopolitical concerns after an attack on Saudi Arabian oil facilities over the weekend. Global growth worries were also bolstered by some softer-than-expected industrial production, retail sales and fixed asset investment data out of China. Brexit uncertainty continued to fester with Prime Minister Boris Johnson expected to meet face-to-face for the first time with European Commission President Jean-Claude Junker today.

The euro and British pound were down versus the U.S. dollar, with the markets awaiting this week’s monetary policy decisions out of the U.S., the U.K. and Japan. Bond yields were lower and several key interest rates remain in negative territory.

Stocks in Asia finished mixed with oil prices spiking in the wake of the weekend’s attack on Saudi Arabia’s oil facilities, while the markets digested some disappointing Chinese economic data for August and awaited monetary policy decisions out of the U.S., Japan and the U.K.

China’s industrial production rose at the slowest pace in over 17 years, while its retail sales and fixed asset investment were also softer than expected. Stocks in mainland China finished little changed, while those traded in Hong Kong fell. Indian equities declined, but Australian securities ticked higher and South Korean listings advanced. Japanese markets were closed for a holiday.

Weekly Market Pulse

WEEK OF SEP. 9 THROUGH SEP. 13, 2019

The stock market went straight up last week — the Dow Jones was up 1.57% while the S&P 500 and Nasdaq added 0.96% and 0.91%, respectively.

Eight of eleven sectors were higher, led by Financial’s 3.83% jump and Energy’s 3.47% spike. Real Estate dropped 3.04% on the week.

Internationally, Developed Markets climbed 2.19% and Emerging Markets similarly went 1.64% higher.

After inverting to end the month of August, the 10-2 Year Treasury Yield Spread has consistently widened and is currently 0.11%.

Last week, investors rotated rather than retreated, indicating that there is potential for this bull market to continue to charge on.

Small- and mid-caps sharply outperformed their large-cap brethren, while the S&P 500’s value subset significantly outpaced its growth counterpart.

Finally, cyclical sectors retook the lead, lapping the slowing defensive groups. Many technicians hold out little hope for stocks in general to set meaningful new highs without being accompanied by small caps. And with small-caps beginning to show some leadership, investors are hopeful that these indices will soon set new highs of their own.

While that would be encouraging, history says it would not necessarily be a game changer, as post simultaneous new highs by large and small caps over the past 40 years have led to only slight improvements in performance

Market Insights 9/13/2019

U.S. equities finished mixed and nearly unchanged heading into the weekend, as early upbeat sentiment surrounding U.S.-China trade optimism and positive economic data was tempered by caution ahead of a number of key central bank meetings next week.

Retail sales came in above expectations and scored a sixth-straight month of gains and consumer sentiment bounced off a near three-year low.

Treasury yields were solidly higher and the U.S. dollar ticked lower, while crude oil prices declined and gold was also down.

The Markets…

The Dow Jones Industrial Average rose 37 points (0.1%) to 27,220

The S&P 500 Index lost 2 points (0.1%) to 3,007

The Nasdaq Composite declined 18 points (0.2%) to 8,177

In moderate volume, 812 million shares were traded on the NYSE and 1.9 billion shares changed hands on the Nasdaq

WTI crude oil moved $0.24 lower to $54.85 per barrel and wholesale gasoline was unchanged at $1.55 per gallon

The Bloomberg gold spot price declined $11.70 to $1,487.56 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was down 0.1% at 98.21

Markets were higher for the week, as the DJIA increased 1.5%, the S&P 500 Index gained 1.0% and the Nasdaq Composite advanced 0.9%

Retail sales continue to rise, September consumer sentiment rebounds from multi-year low

Advance retail sales for August rose 0.4% month-over-month, versus the Bloomberg forecast of a 0.2% increase, and July’s 0.7% rise was upwardly-revised to a 0.8% gain. Last month’s sales ex-autos were flat m/m, compared to expectations of a 0.1% gain and July’s unrevised 1.0% increase. Sales ex-autos and gas ticked 0.1% higher, compared to estimates of a 0.2% gain, and July’s unadjusted 0.9% increase. The control group, a figure used to calculate GDP, increased 0.3%, matching projections, and compared to July’s revised 0.9% increase.

This was the sixth-straight month of gains for retail as strong sales of autos and building materials, along with continued solid online activity, led the way to more than offset some weakness in clothing and furniture sales, as well as a drop for department stores.

The September preliminary University of Michigan Consumer Sentiment Index rose to 92.0 from August’s read of 89.8, and north of the 90.8 expectation. After the index posted the lowest level since October 2016 in August, it rebounded as both the current conditions and expectations components of the index gained ground. The 1-year inflation forecast ticked higher to 2.8% from 2.7%, but the 5-10 year inflation forecast fell to 2.3% from the previous 2.6% rate.

Treasuries were solidly lower following the data, as the yield on the 2-year note rose 7 basis points to 1.80%, while the yields on the 10-year note and the 30-year bond jumped 12 bps to 1.90% and 2.38%, respectively.

Stocks have been threatening record highs, bond yields continue to recover, the U.S. dollar has slipped, crude oil prices modestly added to a down week, and gold finished lower. Eased trade tensions between the U.S. and China have been a main source of support for stocks and bond yields, as the U.S. briefly delayed increased tariffs on China and President Donald Trump said the U.S. could consider an interim trade deal with China, which made further trade concessions regarding the agriculture front.

The markets continue to grapple with the easing of monetary policy from global central banks, with the European Central Bank (ECB) moving deeper into negative interest rate territory yesterday and resuming quantitative easing measures with open-ended asset purchases to begin November 1st. This sets the stage for next week’s monetary policy decisions from the Fed, Bank of Japan and Bank of England.

Europe and Asia higher on trade and ECB stimulus

European equities were mostly higher, as the markets digested the upbeat consumer data out of the U.S., while financials led the way with bond yields rising and as yesterday’s increased stimulus measures from the European Central Bank (ECB) included eased lending facility terms for banks. Yesterday, the ECB announced a 10 bps cut to its deposit facility rate to -0.50%, while announcing the resumption of open-ended asset purchases of 20 billion euros a month starting November 1st,.

U.K. Brexit worries seemed to ease a bit, as Prime Minister Boris Johnson is expected to meet face-to-face for the first time with European Commission President Jean-Claude Junker on Monday, which appeared to foster some hope of a deal. The news came after the prospect of a no-deal exit from the European Union was recently tamped down after some parliamentary defeats for Boris Johnson. In economic news, the Eurozone trade surplus unexpectedly widened in July. The euro gained ground on the U.S. dollar and the British pound rallied.

Stocks in Asia finished higher, buoyed by the continued thawing of U.S.-China trade tensions as the former briefly delayed increased tariffs on the latter and U.S. President Trump said he would consider an interim trade deal, but added that he would prefer to get a whole deal done. Also, China made further trade concessions by adding some U.S. agriculture products to its exemptions from additional tariffs.

The markets appeared to also get some support from the increased stimulus measures announced yesterday from the European Central Bank. Stocks in Japan increased, with the yen continuing a recent drop, while those traded in Hong Kong also advanced. Australian securities ticked higher, and shares in India rose amid the eased trade concerns and following late-yesterday’s economic reports that showed consumer price inflation accelerated at a smaller rate than expected for August and its industrial production rose much more than expected in July. Markets in mainland China and South Korea were closed for holidays.

Stocks rally for third-straight week

Keeping up with the choppiness theme seen since January 2018, U.S. stocks posted a string of three-straight weekly rallies, which came on the heels of four-straight weekly drops, with trade remaining the main catalyst. U.S.-China tensions continued to thaw with both sides offering conciliatory measures as a face-to-face meeting approaches early next month.

U.S. economic data continued to keep recession concerns in check, with a surge in consumer credit, a drop in jobless claims and somewhat warmer inflation statistics joining Friday’s upbeat retail sales and consumer sentiment reports. Adding to the backdrop, geopolitical concerns continued to cool, while China announced more banking sector stimulus measures and the European Central Bank eased monetary policy further to try to boost their slowing economies.

With stocks in rally mode, next week’s monetary policy decision from the Federal Open Market Committee (FOMC) is poised to be the next catalyst for the markets to contend with. Although another 25 bp cut to its target fed funds rate has been priced in when the two-day meeting concludes on Wednesday, the FOMC’s updated economic projections and subsequent press conference from Fed Chairman Jerome Powell is likely to be highly scrutinized, given the thawed trade tensions and continued relatively solid economic data.

Market Insights 9/11/2019

U.S. equities finished higher amid continued subdued U.S.-China trade tensions, while investors await tomorrow’s European Central Bank monetary policy decision and the Fed’s announcement next week.

Treasury yields were up in choppy action following a slightly higher-than-expected, but still-tame, read on U.S. wholesale price inflation, and the U.S. dollar gained ground, while crude oil prices turned sharply lower on news that President Trump was weighing easing sanctions on Iran, and gold finished in the green.

The Markets…

The Dow Jones Industrial Average rose 228 points (0.9%) to 27,137

The S&P 500 Index was 21 points higher (0.7%) at 3,001

The Nasdaq Composite advanced 86 points (1.1%) to 8,170

In moderate volume, 845 million shares were traded on the NYSE and 2.3 billion shares changed hands on the Nasdaq

WTI crude oil tumbled $1.65 to $55.75 per barrel and wholesale gasoline was down $0.02 at $1.57 per gallon

The Bloomberg gold spot price rose $10.33 to $1,496.11 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.3% higher at 98.63

Wholesale price inflation slightly hotter than expected, mortgage applications rise

The Producer Price Index (PPI) showed prices at the wholesale level in August ticked 0.1% higher month-over-month, above the Bloomberg forecast of a flat reading, and versus July’s unrevised 0.2% rise. The core rate, which excludes food and energy, rose 0.3% m/m, versus expectations calling for a 0.2% increase and compared to July’s unadjusted 0.1% dip. Y/Y, the headline rate was 1.8% higher, versus projections to match July’s 1.7% increase. The core PPI rose 2.3% y/y last month, north of estimates calling for a 2.2% increase, and compared to July’s unrevised 2.1% gain.

The MBA Mortgage Application Index rose 2.0% last week, following the prior week’s 3.1% drop. The increase came as a 0.4% rise in the Refinance Index was met with a 4.5% gain for the Purchase Index. The average 30-year mortgage rate dropped 5 basis points to 3.82%.

Treasuries were lower, as the yield on the 2-year note was up 2 bps at 1.68%, while the yields on the 10-year note and the 30-year bond were 4 bps higher at 1.74% and 2.22%, respectively.

Europe and Asia mostly higher as trade concerns remain in check

European equities were mostly higher, as the euro fell versus the U.S. dollar as the markets await tomorrow’s monetary policy decision from the ECB, with expectations of new stimulus measures elevated. Trade concerns, which have cooled a bit to help a recent rally in the global markets, remained subdued, with China announcing tariff exemptions and the nation set to resume talks with the U.S. early next month.

The British pound also trimmed a recent rally versus the greenback that had come from a series of parliamentary defeats for Prime Minister Boris Johnson that dampened no-deal Brexit worries, but Brexit uncertainty remains elevated after Johnson pledged to not request an extension ahead of the October 31st deadline. Bond yields were mixed after a recent recovery, but negative rates in key parts of in the region remain.

Stocks in Asia finished mostly higher, with U.S.-China trade concerns remaining relatively in check, with China offering tariff exemptions and the two largest world economies expected to resume trade talks early next month. Also, the markets are awaiting tomorrow’s monetary policy decision from the ECB in Europe and next week’s Fed decision out of the U.S., with expectations running high of additional stimulus measures.

Japanese equities advanced, with the yen extending losses, while markets in South Korea, Australia and India also gained ground. Chinese markets were mixed ahead of the release of some lending statistics after the closing bell, which showed August aggregate financing—a measure of total credit issued—and new yuan loans both came in stronger than expected.

Stocks in mainland China dipped, but those traded in Hong Kong jumped, bolstered by banks and developers amid speculation the government may announce measures related to land policy

Market Insights 9/10/2019

U.S. equities finished mixed, as the increased optimism surrounding upcoming U.S.-China trade talks ran up against festering global growth concerns to put investors in a cautious mood. .

Treasury yields were higher, and the U.S. dollar gained modest ground, while crude oil prices were mixed in choppy trading and gold continued to pare a recent rally.

….The Markets…

The Dow Jones Industrial Average rose 74 points (0.3%) to 26,909

The S&P 500 Index was nearly a point higher at 2,979

The Nasdaq Composite declined 3 points to 8,084

In moderately-heavy volume, 938 million shares were traded on the NYSE and 2.3 billion shares changed hands on the Nasdaq

WTI crude oil moved $0.45 lower to $57.40 per barrel and wholesale gasoline was up $0.01 at $1.58 per gallon

The Bloomberg gold spot price declined $10.49 to $1,488.64 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.1% higher at 98.39

Small business optimism slips more than expected, job openings dip

The National Federation of Independent Business (NFIB) Small Business Optimism Index for August dipped to 103.1 from July’s unrevised 104.7 level, and versus the Bloomberg expectation of a decrease to 103.5. NFIB President and Chief Executive Officer (CEO), Juanita Duggan noted, “In spite of the success we continue to see on Main Street, the manic predictions of recession are having a psychological effect and creating uncertainty for small business owners throughout the country,” adding that “small business owners continue to invest, grow, and hire at historically high levels, and we see no indication of a coming recession.”

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, dipped to 7.22 million jobs available to be filled in July from June’s adjusted 7.25 million figure, below forecasts of 7.33 million. The hiring rate ticked higher to 3.9% from June’s 3.8% pace, and the separation rate rose to 3.8% from 3.6%.

Treasuries were lower, as the yields on the 2-year and 10-year notes jumped 10 basis points (bps) to 1.67% and 1.72%, respectively, while the 30-year bond rate was 11 basis points (bps) higher at 2.20%.

Stocks were mixed for a second day on the heels of a recent rally that took the markets to within striking distance from record high territory. Gold declined, while bond yields continued to move higher and the U.S. dollar gained modest ground. Trade concerns remain contained as we wait for resumed U.S.-China talks early next month, while geopolitical uneasiness also remains relatively subdued, but global economic data remains soft.

Europe and Asia mixed as markets eye data and trade

European equities finished mixed, with U.S.-China trade fears remaining subdued ahead of next month’s planned resumption of talks, and bond yields in the region continuing to grind higher to likely help the banking sector, though some key rates remain in negative territory.

Markets appeared to tread with some caution ahead of Thursday’s monetary policy meeting from the European Central Bank, while digesting some mixed global economic data. The continued drop in China’s wholesale price inflation garnered some attention and seemed to foster growth concerns, while industrial/manufacturing production figures came in softer than expected. U.K. Brexit uncertainty remained elevated after Prime Minister Boris Johnson pledged to not request an extension ahead of the October 31st deadline, which came amid a series of parliamentary defeats that dampened no-deal Brexit worries. The euro dipped versus the U.S. dollar and the British pound gained modest ground.

Stocks in Asia finished mixed, mirroring the action in the U.S. yesterday, with the markets focusing on the expected resumption of trade talks between the U.S. and China early next month, in which optimism of has underpinned equities as of late. Some mixed Chinese inflation data for August is fostering some economic concerns as the nation’s consumer price inflation was a bit hotter than expected, but wholesale price inflation continued to fall.

Stocks in mainland China dipped, with downside pressure likely being limited by expectations of further stimulus measures in the wake of Friday’s announcement from the People’s Bank of China to reduce the amount of cash banks need to hold in reserve, while those traded in Hong Kong finished little changed. Japanese equities rose, aided by some softness in the yen, and South Korean securities also advanced, while Australian securities declined. Markets in India were closed for a holiday.

Market Insights 9/9/2019

U.S. equities finished mixed after paring early gains following back-to-back weekly gains.

Treasury yields were higher, showing little reaction to the afternoon release of consumer credit, and crude oil prices gained ground, while the U.S. dollar and gold were lower.

…..The Markets….

The Dow Jones Industrial Average rose 38 points (0.1%) to 26,836

The S&P 500 Index was nearly unchanged at 2,979

The Nasdaq Composite declined 16 points (0.2%) to 8,087

In moderate volume, 890 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq

WTI crude oil moved $1.33 higher to $57.85 per barrel and wholesale gasoline was up $0.01 at $1.58 per gallon

The Bloomberg gold spot price declined $5.62 to $1,501.20 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.1% lower at 98.29

Consumer credit surges, economic calendar set to heat up

Consumer credit, released in the final hour of trading, showed consumer borrowing expanded by $23.3 billion during July, the most since late 2017 and well above the $16.0 billion forecast of economists polled by Bloomberg, while June’s figure was adjusted downward to an increase of $13.8 billion from the originally reported $14.6 billion. Non-revolving debt, which includes student loans and loans for vehicles and mobile homes, rose $13.3 billion, a 5.3% increase year-over-year, while revolving debt, which includes credit cards, rose by $10.0 billion, an 11.2% y/y rise.

Treasuries were lower, as the yield on the 2-year note rose 6 basis points (bps) to 1.58%, the yield on the 10-year note advanced 8 bps to 1.63%, and the 30-year bond rate gained 9 bps to 2.11%.

U.S. stocks pared early gains after notching a second-straight weekly rally last week, and crude oil prices were higher, though the U.S. dollar and gold retreated a bit. The global markets have been supported somewhat by resurfaced trade optimism as the U.S. and China said talks will resume early next month, and U.S. economic data has been relatively positive, even after Friday’s mixed August non-farm payroll report. Finally, some peripheral geopolitical risks have cooled somewhat as Hong Kong withdrew a controversial extradition bill that had sparked prolonged protests, Italy’s new government took shape and U.K. parliamentary votes cooled concerns about a no-deal Brexit.

Europe mixed on data and Brexit uncertainties, Asia mostly higher

European equities were mixed, as the markets digested some relatively upbeat economic data in the region, along with some softer-than-expected Chinese trade figures, while U.K. Brexit uncertainty remained. German July exports unexpectedly rose, along with industrial/manufacturing production figures out of the U.K. The U.K’s July GDP came in a bit stronger than projected and Eurozone investor confidence improved more than anticipated for September, but still remained in negative territory.

The British pound extended a recent rally on the data and festering Brexit uncertainty after the recent defeats in parliament for Prime Minister Boris Johnson that tamped down no-deal Brexit fears ahead of the October 31st deadline, but fostered heightened uncertainty regarding the political path forward. The euro rose versus the U.S. dollar and bond yields in the region were mostly higher, but some key rates remain in negative territory.

Stocks in Asia finished mostly to the upside, with global sentiment continuing to find support from relatively eased trade concerns as the U.S. and China said talks will resume early next month. Stocks in mainland China rose, even after some softer-than-expected trade data for August over the weekend, while those traded in Hong Kong finished little changed, as did shares in Australia.

Japanese equities advanced, with the yen a bit choppy, and following the release of the country’s Q2 GDP report, which showed growth slowed to a 1.3% quarter-over-quarter annualized rate, matching forecasts, and from the 2.2% pace posted in Q1.

Market Insights 9/6/2019

U.S. equities finished out the final session of a shortened week mixed, but notched a second solid weekly gain.

Federal Reserve Chairman Jerome Powell’s spoke in Switzerland offering mostly positive reviews of where the U.S. economy stands.

Treasury yields were lower after yesterday’s jump and the U.S. dollar was little changed, while crude oil prices were modestly higher and gold tacked onto yesterday’s plunge.

The Markets…

The Dow Jones Industrial Average rose 69 points (0.3%) to 26,797

The S&P 500 Index added 3 points (0.1%) to 2,979

The Nasdaq Composite declined 14 points (0.2%) to 8,103

In moderately-light volume, 735 million shares were traded on the NYSE and 1.9 billion shares changed hands on the Nasdaq

WTI crude oil moved $0.22 higher to $56.22 per barrel and wholesale gasoline was up $0.02 at $1.57 per gallon

The Bloomberg gold spot price declined $13.58 to $1,505.47 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—was nearly unchanged at 98.41

Markets were higher for the week, as the DJIA increased 1.5%, the S&P 500 Index gained 1.8% and the Nasdaq Composite advanced 1.8%

August nonfarm payroll report mixed

Non-farm payrolls grew by 130,000 jobs month-over-month (m/m) in August, compared to the Bloomberg forecast of a 160,000 increase. The rise of 164,000 seen in July was revised to a gain of 159,000 jobs. Excluding government hiring and firing, private sector payrolls increased by 96,000, versus the forecasted gain of 150,000, after rising by 131,000 in July, revised from the 148,000 increase that was initially reported. The Labor Department said it saw notable jobs gains in health care and financial activities, while the mining sector lost jobs.

The unemployment rate remained at July’s 3.7% rate, in line with forecasts, while average hourly earnings were up 0.4% m/m, above projections to match July’s unrevised 0.3% gain. Y/Y, wage gains were 3.2% higher, versus estimates of a 3.0% increase, and compared to July’s upwardly-adjusted 3.3% gain. Finally, average weekly hours ticked higher to 34.4, matching estimates, from July’s unrevised 34.3 rate. The labor force participation rate rose to 63.2% from 63.0% in July.

Treasuries were higher, as the yields on the 2-year and 10-year notes were down 2 basis points (bps) at 1.52% and 1.55%, respectively, while the 30-year bond rate fell 4 bps to 2.02%.

In a speech in Switzerland on the economy and monetary policy, Federal Reserve Chairman Jerome Powell said that the Central Bank’s pivot to lower interest rates has helped to sustain U.S. economic growth, and that as a result of the recent moves the “outlook is still a favorable one.” He added that while he believes that “trade policy is causing some companies to hold back on investment”, and that there continues to be quite a bit of uncertainty, he expects the difficulties to be contained and does not see the U.S. slipping into a recession.

Europe and Asia higher amid data, lingering trade hopes

European equities finished mostly higher, with the global markets remaining buoyed by increased optimism regarding trade after the U.S. and China announced they will resume talks in Washington early next month. However, a mixed read on August employment in the U.S., along with a larger-than-expected drop in German industrial production for July kept gains in check. In other economic news, Q2 Eurozone GDP growth was revised modestly higher to a 1.2% y/y pace, which was down slightly from the 1.3% expansion posted in Q1.

Heightened Brexit uncertainty continued to be a drag, as Prime Minister Boris Johnson’s recent defeat in parliament dampened the possibility of a no-deal Brexit as an October 31st deadline looms, but it fostered uncertainty regarding the political path forward. The markets also awaited today’s speech from U.S. Federal Reserve Chairman Jerome Powell in Zurich on the economic outlook and monetary policy.

The euro ticked higher versus the U.S. dollar and the British pound fell after a recent rally, while bond yields in the region were mostly lower, with several key rates remaining in negative territory.

Stocks in Asia finished higher to close out the week, with the global markets continuing to find a boost from increased trade optimism as the U.S and China said they will resume talks in Washington early next month.

Stocks in Japan moved higher, with the yen holding onto a recent slide that has come from the eased trade concerns and as economic data was mixed. Japan’s household spending rose in July, though its earnings figures declined for the month.

Mainland Chinese equities advanced with the nation offering further stimulus measures by reducing the amount of cash banks need to hold in reserve, while those traded in Hong Kong also gained ground, shrugging off a credit rating downgrade from Fitch, as telecommunications service supply issues rallied after Italy’s new government exercised special powers to enter into supply deals with some of these companies.