Not looking for loans, just a place to take a load off.
Both businesses and consumers have been less than eager to take out new loans, and banks in their second-quarter earnings discussions universally lamented the weak loan demand environment.
Now it looks as if banks are easing their loan standards to seduce more demand.
The main message in the Fed’s quarterly senior loan officer survey out today is that, in general, banks have eased their credit standards after a long tightening spell. They’re also becoming more competitive on business loan terms and lines of credit as they try to win new loans from a smaller pool of those actually seeking fresh credit, something Paul and I noted in an Upshot column last month.
If the NYSE held a stock-trading session and nobody came, it would look a lot like what you saw today. US stocks sleepwalked through a slight August session, with the winds buffeting the global economy, making so people so nervous, leaving only a quiet murmur on Wall Street.
DJIA eases 1 to 10302, S&P 500 inches ahead just 0.12 to 1079, Nasdaq Comp adds 8 (0.4%) to 2182, with tech shares bolstered by Dell’s all-cash acquisition of 3PAR. NYSE volume is anemic, just 3.1B shares traded. It was, in fact, the lightest day this year.
But while stocks were somnolent, the action was in the Treasury market: the 10-year yield slid as low as 2.579%, lowest since March 2009. A 2.5-anything number on the 10-year yield should be getting people’s attention. The bond market is talking.
Today’s report from the New York Fed on manufacturing was taken pretty well by the Street. The manufacturing index in August rose slightly from July, but the numbers are still well below their spring levels, and pointing to a significant slowdown in activity. But at least we’re not Japan. Japan’s 2Q GDP positively cratered, with the upshot being that for now at least, China is the world’s second-largest economy.
Those are just more signs that the global recovery thing is flagging.
Elsewhere, Lowe’s reports 10% profit growth, kicking off a big week for retail earnings. Still, the company’s 2H outlook was guarded, and company expects weakness until jobs, housing recover.
The story that Tomi and I wrote last week, and Paul discussed on the blog over the weekend, is still generating a ton of chatter on the web, in the newsroom and on trading floors. Heck, this Huffington Post pickup has more than 1,100 comments on it.
The tone among readers is definitely mixed. Some are intrigued about the indicator and understand that it’s something to keep in their back of their heads as they assess the stock market’s prospects. Others are completely outraged that we’d write such a story, with some claiming its merely sensationalist drivel.
But I think the main takeaway from all the attention and scrutiny of our piece is people are on edge, plain and simple. Investors are worried, panicked if you will, about what’s coming next.
There’s a heightened sense of uncertainty swirling throughout the stock market during the last few weeks. Yes, I know, nothing is ever certain about the market. But these times seem especially dicey, especially after the weaker-than-expected 2Q GDP report, a disappointing July jobs report and a less-than-stellar assessment of the economy from Fed Chairman Ben Bernanke. Consumer spending is way down, the labor market is still a mess, retail sales aren’t close to fully recovering, the housing market can’t find its way and small businesses are more pessimistic than ever.
How about this for a sign of the times? When you search “double dip” on Google, the famous Seinfeld scene is no longer the top response. Instead, you find increasing chatter about the economy double-dipping back into recession.
Lowe’s reported earnings this morning, the first in a string of retailers reporting this week that includes Wal-Mart and Home Depot tomorrow, and what they’re talking about is the same thing all the retailers will be talking about, and what we’re seeing across asset classes and regions: that “uncertain” demand.
That’s what we’re talking about on today’s Markets Hub.
Stocks modestly weaker currently in Europe, mixed in Asia overnight, which paints an ambivalent premarket picture for US equity markets.
Big slowdown in Japan’s latest GDP reading weighs a bit on sentiment. Bid behind Treasurys remains strong, gold higher and oil up slightly. Fairly busy week for US economic data, including NY Fed’s August Empire State survey today at 8:30 a.m. ET, and homebuilders sentiment index set for 10:00 a.m.
Tomorrow we’ll see PPI, housing starts and industrial production & capacity utilization. Home Depot, Wal-Mart, Target and Dell all report earnings this week.
S&P futures down 3.80, DJ futures down 29. Ten-year note higher, yield at 2.62%.
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 […]
President Reagan’s former budget director David Stockman says Edward Snowden performed a heroic act, the Patriot Act should be repealed, and this whole spying-on-U.S.-citizens thing is a symptom of an out-of-control military-industrial complex. Click here to watch him go on YahooFinance. The author of “The Great Deformation: The Corruption of Capitalism in A […]
