US stocks slide sharply as the subtle message the Fed’s been delivering lately, the economy’s hitting an air pocket (and they hope not worse), seems to be sinking in.
DJIA loses 146 (1.4%) to 10153, S&P 500 drops 18 (1.7%) to 1073 (and closer to June low of 1050), Nasdaq Comp falls 37 (1.6%) to 2217. NYSE volume is low. Treasurys garnering some headlines, as yields continue falling; two-year low near 2008 Lehman-crisis lows. The Dow is down three of the past four sessions (2.7% in that span); the S&P (3.5%) and Nasdaq (3.1%) are down four of the past four sessions. For the S&P, 1050 marked the low point of the June correction, and that’s coming back onto the radar.
Who said the correction’s over?
Weekly jobless claims show some improvement, although they remain stuck at a level that implies no real job creation. Durable goods orders fall 1.1%, mainly on aircraft.
We’ve been watching the Fed quietly ratchet back their expectations. Well, actually, it’s quiet for a normal group of individuals, for the often abstruse central bank, it practically constitutes screaming. First there was Chairman Ben Bernanke’s testimony to Congress a few weeks back, where he warned the recovery was fragile.
If you like wonky economical humor, and really who doesn’t?, then you have to check out Josh Brown’s rundown of the “economic gangs of New York” over at his Reformed Broker blog. The Austerians, the New Jack Keynesians, the V-Shapers, the Double-Dippers, the One Percenters, the Inflationistas, the New Normalers and the Nihilists, they’re all there. (It works better if you’ve seen “The Gangs of New York,” of course.)
I don’t want to just steal the whole thing, so here’s a little taste, you’ll have to go to his site for the rest:
The Double Dippers – The nomenclature “Double Dipper” can be a bit misleading as many gang members never agreed that the single dip was actually over. Rather, they’ve insistently maintained that minus the effects of quantitative easing, fiscal stimulus and theater-of-the-absurd monetary policy, there never really was a recovery. Michael Pento (Greenfaucet) throws on the leathers and leads this pack, flanked by David Rosenberg (Gluskin Sheff) and Meredith Whitney (eponymous firm). It should be remarked that this gang is growing faster than the others as of this guide’s creation.
By that description, I think that makes me a Double-Dipper.
On today’s Markets Hub, we’re taking a closer look at Treasurys and what, with the 10-year yield sliding closer to the key 3% level, they’re telling us. Unlike 2008, they’re not telling us to panic, but they are warning us about the economy.
The FOMC’s rather sober assessment yesterday of US economic activity is taking some blame for softness in stock markets overseas, and US equity futures suggest moderate declines when regular trading gets underway.
Early focus is on 8:30 a.m. release of weekly jobless claims, which have remained stubbornly high since the end of last year; expectations see a decline of 7,000 in initial claims. May durable goods also due at 8:30 a.m., with total orders expected to fall 1.5%. Kansas City Fed’s June manufacturing survey set for 11:00 a.m. ET.
Euro’s a little weaker at 1.2278, USD index up a bit. S&P futures down 8.90, DJ futures down 68. Ten-year higher, yield at 3.07%.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
The bridge that collapsed on Interstate 5 bridge over the Skagit River in Washington was listed as “functionally obsolete” and “fracture critical,” which means the whole sha-bang could come tumbling down if one major part fails. Click here to read the details from USAToday. This sort of thing shouldn’t be happening in a modern, developed nation. Barry LePatn […]