Economic Journal - Friday, 8/7/2015

(As of 7:10 am PST)

US stocks opened lower Friday as investors digested labor market data including the Labor Department’s non-farm payrolls report released early this morning. According to the jobs report, the private sector added 215,000 jobs in July, slightly below estimates, but strong enough to set the stage for a likely September rate hike from the Federal Reserve. The ‘good news-bad news’ trade looks to be unfolding today, as investors sold down shares soon after the release of the jobs report. In overseas action, Asian stocks finished Friday’s session mixed, while China’s Shanghai index climbed 2.25% Friday to close out the week with weekly gains. In Europe, stocks are down across the board with the negative momentum picking up steam after the US jobs report was released this morning. Oil prices are down nearly 1% today, while gold is up slightly. Interest rates spiked momentarily after the jobs report release, but are settling back down as the 10 yr. treasury trades flat today at 2.21%. Heading into Friday’s session, all three US benchmarks look on pace to record weekly losses, with the S&P500 eyeing a 1% weekly decline, while the Dow and Nasdaq face losses of over 1.5%.

Economic Journal - Thursday, 8/6/2015

(as of 7:00 AM PST)

 

It's another weak opening for stocks.  Media companies are leading the market lower with investor darling Disney the most notable decliner, falling 10% yesterday, and another 3% this morning after disappointing the market with weaker future projections.  No big news from Europe or Asia and economic data is sparse today.  Concerns about a Federal Reserve rate hike next month also have investors on edge.  It looks like a difficult day for the bulls as negative momentum seems the order of the day.  Precious metals are near flat-line, while oil is drifting lower.

Economic Journal - Wednesday, 8/5/2015

(As of 7:05 am PST)

US stocks are on the rise early Wednesday looking to snap a three day losing streak. It’s a busy data day with the most notable report coming from payroll processor, Automatic Data Processing (ADP), which showed private sector job growth slowing in July with only 185,000 jobs added – well below the 220,000 forecasted.  The softer-than-expected reading has some investors speculating that Friday’s non-farm payrolls report could also show signs of weakness, which may cause the Fed to consider pushing out their rate hike timeline. Though the ADP report often is a poor guide to the more reliable Labor Dept. report released Friday, traders will often look to it for clues on the labor market and I think we may be seeing the bid up in stocks today as a result of the weakness in the ADP. Corporate earnings are also contributing to today’s rise in stocks with reports from Priceline and First Solar beating expectations. Shares of Apple Inc. are also recovering today after a recent skid has thrust the world’s largest company back into the headlines. In Asia, stocks finished Wednesday’s session mixed despite positive data out of China’s services sector. European stocks were broadly higher. Gold is down slightly today while oil is up 1%. If today’s early rally is based solely on the ADP report expect it to fade as the day wears on.

Economic Journal - Tuesday, 8/4/2015

(As of 7:15 am PST)

US stocks opened near the unchanged line a day after all three indexes closed firmly lower. Disappointing economic data and falling oil prices caused the weakness Monday, with investors taking a cautious stance into a data rich week which culminates in Friday’s private sector jobs report. The US non-farm payrolls report, a key market moving report, will be especially scrutinized this week, as investors will be looking for clues to the strength of the labor market in considering when the Federal Reserve bank will move to raise interest rates. Today’s lone economic report showed factory orders in the US increasing 1.8% in June, slightly below forecast. In overseas action, Asian markets finished today’s trading mixed with the big story coming out of China as regulators moved to restrain the volatility in China’s stock market by revising rules on short selling for investors. China’s Shanghai index rallied by 3.7% in Tuesday’s session. In Europe, equity markets look to be on pace for a mostly down day across the board. Oil is recovering some of yesterday’s losses trading up 2% to just over $46/barrel while gold and other precious metals are up slightly. Interest rates are higher today while the US dollar is flat against major world currencies.

Economic Journal - Monday, 8/3/2015

(as of 6:50 AM PST)

Markets are down a little after an early release of PMI data, a key measure of economic activity, did not meet expectations.  At 52.7 the reading still indicates economic expansion, but it was less than forecast and investors seem to be overreacting, sending stocks lower.  International news is not helping at the start.  China's Shanghai Index resumed its decline after negative economic data this weekend while Europe is mostly to the plus side.  The Greek stock market finally opened after an extended period of suspension and, predictably, it was down 17%, with investors weighing in on several weeks of financial drama.  Energy continues to face headwinds.  Oil is down over 2% and big energy companies are down as well.  Gold is also continuing its downward path although it appears to be stabilizing.  With a large number of companies having already reported this quarter, earnings are coming in ahead of expectations, but still slightly down.  Future projected profits and revenue have not been impressive and momentum to the downside seems to be taking hold.