Economic Journal - Tuesday, 9/30/2014

(as of 7:00 AM PST)

Negative momentum seems to be digging in.  Markets are down marginally after overnight futures were mostly positive seeming to indicate a mild rise at the start.  International news is weighing on investors.  The protests in Hong Kong are having an impact and even the Russian sanctions seem to be having a negative global impact as the Russian Ruble is at historic lows.  The US dollar is continuing a strong rally with global investors seeking a safe haven to park their money in a world that seems much less secure than it was a month ago.  US economic data is mixed.  The Chicago PMI, a key measure of industrial activity, was strong with a reading of 60, but it was down from last month's measure of 64.  Unsettled is probably the best term for this market.  As we enter October investors must surely be nervous as they reflect on a month with a history of significant market corrections.  Oil and gold are both down on the surging US dollar. 

Economic Journal - Monday, 9/29/2014

(As of 7:20 am PST)

Violent protests in China over the weekend have sent global equities lower to start the week.  Pro-democracy protests which broke out over the weekend in Hong Kong’s busiest commercial districts have caused several banks and financial institutions to shut down branches. The rally aimed at protesting Beijing’s new election plan has created quite a stir, effecting financial markets throughout Asia and spreading to the European and US markets today.  All three major US indexes are lower to start the week.  Economic data will be plentiful this week.  Already today we’ve seen reports on consumer spending and personal incomes that have met or exceeded expectations. Later in the week investors will be keying in on the non-farm payrolls jobs report and an important policy meeting at the European Central Bank.  There’s a lot to keep investors busy this week.  Expect a wild close to the third quarter.

Economic Journal - Friday, 9/26/2014

(As of 7:20 am PST)

US stock indexes are higher this morning recovering some of yesterday's sharp losses.  Economic data spurred on early gains as the final reading of third quarter GDP showed growth in line with expectations at 4.6%.  Also encouraging to investors was the University of Michigan consumer sentiment report which showed sentiment rising in September to the highest level since July 2013.  In stock news, shares of Apple are up 2%, recovering some of yesterdays losses after the iPhone maker came under pressure over bending claims of its new iPhone 6. Also on a positive note, shares of Nike are soaring, up 10% after posting better than expected earnings results yesterday.  International markets were mixed with Asian indexes finishing the week on a mostly lower note, and European stocks mostly higher after starting the day down. Gold is down and oil up while interest rates jumped after several straight days of declines.  Despite today’s early recovery markets are on pace for weekly losses of 1%-2%. There’s a cautious tone going into the weekend as investors weigh geopolitical events around the world with slowing growth in China and tightening monetary policy in the US.

Economic Journal - Thursday, 9/25/2014

(As of 7:20 am PST)

Yesterday’s stock rally was short-lived with today’s action giving back nearly all of yesterdays gains.  Disappointing economic data fueled the selling pressure early.  Orders for durable goods plunged 18.5% in August, a record decline, after gaining 22.5% in July.  The swing was due in most part to the normally volatile transportation sector. Boeing for example signed 324 contracts in July compared to only 107 in August.  Stripping out the transportation sector, durable goods orders increased by 0.7%. In other economic news, jobless claims rose 12,000, still hovering near an 8 month low.  The tech heavy Nasdaq is leading the declines for the major indexes.  Shares of Apple are down 2.5% dragging many tech stocks lower.  In international markets, Asian finished mixed after news that China is considering replacing its current central bank chief.  European markets were on the decline most of the day despite dovish remarks from ECB President Mario Draghi who signaled the central bank is considering another round of QE to help tackle low inflation.  Treasuries rallied on the remarks sending interest rates lower. Gold is down while oil added slightly.

Economic Journal - Wednesday, 9/24/2014

(As of 7:20 am PST)

Markets are trading near the unchanged line after a brief recovery at the open.  Worries over global growth and Middle East tensions have weighed on markets as of late sending US indexes on a 3 day losing streak.  Stocks moved higher early after a report on housing showed US new-home sales surged in August to a 6 month high.  The gains were short lived however as investors turned back to worries over growing Middle East tensions as a US-led coalition of airstrikes in Syria against the Islamic State have captured headlines this week.  Later in the day, investors will be keying in on several speeches from Fed officials, looking for hints on the timeline of the Fed’s short term rate hike.  International markets are mixed today while gold and oil are lower.  Interest rates are down for the fourth straight day as money continued to flow into the safe haven treasury.  Today’s market action looks poised for another session of losses.

Economic Journal - Tuesday, 9/23/2014

(As of 7:20 am PST)

US stocks opened with a cautious tone this morning.  Weak data out of Europe sent European markets sharply lower and was cause of concern for US investors early.  Better-than-expected manufacturing data out of China was largely overlooked as momentum turned negative right from the open.  Geopolitical fears are also adding to the negative sentiment the morning after the US conducted its first round of airstrikes against the Islamic State in Syria. Economic data is light again this morning with a report on home prices showing prices inched higher in July, but at a slower pace than expected.  Oil and gold are higher as is the safe-haven treasury forcing a drop in interest rates.  With a Federal Reserve that remains accommodative many strategists are continuing to call this environment for stocks favorable. However that doesn’t mean a slight pullback in the short term may also be due.  Expect volatility to pick up throughout the day and week as investors assess portfolio positions and strategies heading into the 4^th quarter.