- US stocks close lower. No record closes today.
- More from BoC Gov Macklem, expressing concern over Trump's attack on Fed independence
- Bank of Canada Macklem: Powell is doing very good job under tryin circumstances
- Crude oil settled at $63.41. Up $1.13 on the day
- Trump:With the support of the EU, Ukraine is in position to fight &win all of Ukraine back
- BOC's Macklem: For many investors, the value of the USD as a hedge has been dented
- The US dollar edges lower after Powell. Bonds bid
- S&P 500 gives back yesterday's gains, now flat on the week
- U.S. Treasury sells $69 billion of 2 year notes at a high yield of 3.571%
- The full text from Chair Powell's speech
- European indices close mostly higher
- Energy stocks rally as major tech players retreat
- Trump: Europe needs to immediately cease all Russia energy purchases
- Fed's Bostic: I could support a 1.75-2.25% inflation target down the road
- US September Richmond Fed composite index -17 vs -7 prior
- US September flash S&P Global services PMI 53.9 vs 54.0 expected
- Fed's Bowman: Worried the Fed is behind the curve on the jobs market
- Philly Fed non-manufacturing index -12.3 vs -17.5 prior
- Canada August new housing price index -0.3% vs -0.1% prior
- Fed's Goolsbee: We have a low-hiring, low-firing jobs market
- US Q2 current account deficit $251.3B vs 256.8B expected
- investingLive European FX news wrap: Awaiting the US PMIs and more Fedspeak
The major US stock indices ran out of steam today. The indices have been overbought given the recent run higher and it seemed it was simply time to move lower.
Earlier today, the S&P flash PMI data come in about as expected, but was lower than the prior month:
- Manufacturing flash PMI 52.0 vs 53.0 last month
- Services flash PMI 53.9 vs 54.5 last month
- Composite 53.6 vs 54.6 last month.
Although lower, the silver lining is the numbers remain above the 50 level indicating an expansionary trend.
For the major indices, since August 20, (22 days or around a month of trading), the indices have done well with the Nasdaq leading the way:
- Nasdaq index is up 9.07% to the recent all-time highs
- S&P is up 5.60% to the recent all-time highs
- Dow is up 4.79% to the recent all -time highs.
The solid gains seen over the last month are reason enough to lead to a correction lower.
Today, the
- Dow fell -0.19%,
- S&P fell -0.55% and the
- Nasdaq fell -0.95%.
Fed's Powell spoke today for the first time since the FOMC rate decision and although he is not a central banker on a mission, but instead is like one who is driving in heavy highway traffic,. i.e., he has both hands on the wheel and a foot ready to hit the brakes at the first sign of danger.
Key comments on monetary policy from his speech were:
“Near-term risks to inflation are tilted to the upside and risks to employment to the downside—a challenging situation.”
“Two-sided risks mean that there is no risk-free path. If we ease too aggressively, we could leave the inflation job unfinished. If we maintain restrictive policy too long, the labor market could soften unnecessarily.”
“The increased downside risks to employment have shifted the balance of risks to achieving our goals.”
“We judged it appropriate at our last meeting to take another step toward a more neutral policy stance, lowering the target range for the federal funds rate by 25 basis points to 4 to 4-1/4 percent.”
“This policy stance, which I see as still modestly restrictive, leaves us well positioned to respond to potential economic developments.”
“Our policy is not on a preset course.”
“We remain committed to supporting maximum employment and bringing inflation sustainably to our 2 percent goal.”
Fed's Bostic also spoke today and he was more concerned about inflation. He commented that the could support a future adjustment to the Fed’s inflation target, suggesting a range of 1.75% to 2.25% down the road. While not addressing the current outlook directly, he cautioned that inflation has remained above the 2% goal for more than four years, which is cause for concern. Bostic noted that businesses continue to face cost pressures and often have limited ability to absorb them without passing them on, meaning inflationary pressures are likely to persist. He emphasized that he remains worried about inflation even as discussions about the Fed’s policy framework continue.
US yields moved lower after the comments and are ending the day near the lows for the day:
- 2 year yield 3.588%, -1.3 basis points.
- 5 year yield 3.668%, -2.8 basis points
- 10 year yield 4.105%, -3.9 basis points
- 30 year yield 4.720%, -4.1 basis points
In the forex market, the USD is closing mixed and little changed with the USDCHF the biggest mover of the major currency pairs. Versus the USD, the major currencies showed the following changes vs the USD:
- EUR +0.10%
- JPY +0.03%
- GBP +0.08%
- CHF +0.11%
- CAD -0.10%
- AUD -0.02%
- NZD -0.14%
IN other markets:
- Crude oil is traing up $1.34 or2.15% at $63.62.
- Gold rose $17.46 and reached another record at $3791.08. It is trading at $3763
- Silver is trading near unchanged at $44.00 after reaching another high going back to 2011 at $44.62
- Bitcoin fell -$841 or 0.75% at $111.901. The digital currency traded as high as $117,968 on September 18.
