Weekly newsletter October 03 to October 07
October 03, 2022
October 04, 2022
Fed Pivot Trade sparks again as bonds rally, dollar weakens Global bonds and stocks are rallying on hopes that the latest signs of weakness in the US economy will push the Federal Reserve to rethink the aggressive monetary policy tightening that some fear will trigger a recession. While the so-called Fed pivot has long been hoped for, it got another jolt this week with the release of weaker-thanexpected manufacturing data in the US. The dollar extended losses Tuesday, and European equities jumped, following a similar rally in the US on Monday.
Photo: US News
Wall Street rallies as Bond Yields pull back from highs U.S. stocks rallied on Monday and Treasury yields eased off their multiyear highs as Wall Street leaves behind the worst month since the virus pandemic crashed global markets. The S&P 500 rose 2.3% as of 1:29 p.m. Eastern. The Dow Jones Industrial Average rose 682 points, or 2.3%, to 29,408 and the Nasdaq rose 1.9%.
The moves came as traders trimmed bets on future rate hikes, with money markets signaling that the Fed Funds rate will peak by March. The two-year Treasury yield briefly slid below 4% for the first time since Sept. 21. German short-dated bonds rallied even more, with yields down as much as 16 basis points to 1.46%. ING Bank NV strategists remained skeptical about an imminent Fed pivot. Despite Monday’s weakerthan-expected ISM manufacturing figures, the US domestic story “remains rather solid” and leaves Fed tightening prospects alive.
Energy stocks made the biggest gains as U.S. crude oil prices jumped 4.8%. Exxon Mobil rose 4.4%. The oil cartel OPEC is expected to announce production cuts this week. Technology stocks also made strong gains. Microsoft rose 2.6%. Treasury yields fell significantly and relieved pressure on stocks. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.64% from 3.83% late Friday. Consumer spending has been one of the stronger areas of the economy, along with the employment market. Wall Street will get several updates on the latter in the coming week. On Tuesday, the government will release its August report for job openings and turnover. It will release its closely watched employment report, for September, on Friday. Source: https://www.usnews.com/news/business/articles/2022-10-03/asian-shares-mostlylower-as-recession-fears-deepen
Source: https://www.bloomberg.com/news/articles/2022-10-04/fed-pivot-trade-sparksagain-as-stocks-rally-dollar-weakens
October 05, 2022
October 6, 2022
Jobless Claims Rise Last Week to 219,000 The number of people filing for first-time unemployment benefits rose by 29,000 to 219,000, the Labor Department reported on Thursday. That compares to a revised 190,000 in the previous week. The four-week moving average, meanwhile, was 206,500, an increase of 250 from the prior period. Although the number rose by more than 10%, claims numbers do tend to vary week to week and it may have been affected by Hurricane Ian. The report comes one day before the government issues the monthly jobs numbers for September, with expectations that the figure will come in around 200,000 to 250,000 jobs added. On Wednesday, private payroll firm ADP said its monthly survey of hiring showed 208,000 jobs had been created in September. Photo: News TV USA
U.S. starts fiscal year with record $31 trillion in debt, approaching debt ceiling The nation's gross national debt has exceeded $31 trillion, according to a U.S. Treasury report released Tuesday that logs America's daily finances. Nearing the statutory ceiling of roughly $31.4 trillion — an artificial cap Congress placed on the U.S. government's ability to borrow — the debt numbers are hitting an already tenuous economy facing the highest inflation in 40 years, rising interest rates and a strong U.S. dollar.
But there are signs that employers are no longer offering outsize salaries and additional benefits to lure workers as they were a year ago when companies widely reported they were unable to find workers to fill positions. Earlier this week, the government reported the number of job openings had fallen by about 1 million to 10.1 million. But that is still a very high number and despite a few instances of layoffs at major companies like Ford, there is not a widespread effort to shed employees. “Firms seem to struggle to operate at capacity as they have insufficient staffing and have trouble finding qualified workers, especially in health care,” LPL Financial Chief Economist Jeffrey Roach said on Wednesday.
Even as President Joe Biden has touted his administration's deficit reduction efforts this year and recently signed the so-called Inflation Reduction Act, which attempts to tame high price increases caused by a variety of economic factors, economists say the latest debt numbers are a reason for concern. In its August Mid-Session Review, the administration forecasted that this year's budget deficit will be nearly $400 billion lower than it estimated back in March, due in part to stronger than expected revenues, reduced spending and an economy that has recovered all the jobs lost during the multiyear pandemic. Source: https://www.cbsnews.com/news/national-debt-at-record-31-trillion-treasury-says/
Photo: US News Souce: https://www.usnews.com/news/economy/articles/2022-10-06/jobless-claims-riselast-week-to-219-000
October 6, 2022
Photo: CBS News
CDC ends daily reporting of COVID case and death data, in shift to weekly updates After more than two years of publishing data on COVID-19 cases and deaths daily, the Centers for Disease Control and Prevention announced Thursday it would shift to weekly updates to its nationwide tracking of the virus. "To allow for additional reporting flexibility, reduce the reporting burden on states and jurisdictions, and maximize surveillance resources, CDC is moving to a weekly reporting cadence," the agency wrote in a post to explain the move. Starting on October 20, state and local health departments will now only need to report new COVID-19 cases and deaths to the agency every week on Wednesdays. The CDC's COVID-19 Community Level ratings, which guide recommendations on whether counties should be taking steps like masking to curb a surge in hospitalizations, are already updated only weekly on Thursdays. COVID-19 forecasts updated by the agency will also now come on a day later on Thursdays. But he warned that an array of new variants now growing across the country, plus the risk respiratory diseases pose every winter, suggested "it would be a bit cavalier to all of a sudden say we're completely through with it." It also comes as federal health authorities have been bracing for a potential repeat of the past two deadly winter waves of COVID-19, paired with a possibly severe flu season. Source: https://www.cbsnews.com/news/covid-19-cases-deaths-cdc-ends-daily-reportingweekly-updates/