US stocks stable, dollar weakens on poor data, backing Fed’s pause.
Wall Street Wavers as Disappointing Economic Data Raises Fed Pause Probability
By Stephen Culp
All three major U.S. stock indexes oscillated slightly between red and green on the penultimate trading day of August, which remains on track to mark the S&P 500’s biggest monthly percentage drop since February, and the tech-laden Nasdaq’s largest slide this year.
A barrage of economic indicators generally surprised to the downside, including private payrolls clocking a 52.3% monthly drop and second-quarter GDP revised significantly lower, to 1.7% on a quarterly annualized basis.
Ironically, weak economic data could be good news for interest rates, as it could give the Federal Reserve a rationale for letting key interest rates stand at next month’s monetary policy meeting.
“The data was the kind of disappointing that markets want to see,” said Thomas Martin, senior portfolio manager at GLOBALT in Atlanta. “It came in weaker than consensus, but it wasn’t too weak, and it fits with the idea that central banks have another data point that makes them more comfortable with holding steady rather than opting for further rate increases.”
Financial markets have currently priced in a 90.5% likelihood of a September Fed pause, according to CME’s FedWatch tool.
The Dow Jones Industrial Average fell 5.16 points, or 0.01%, to 34,847.51, the S&P 500 gained 6.28 points, or 0.14%, to 4,503.91 and the Nasdaq Composite added 32.32 points, or 0.23%, to 13,976.08.
European Stocks Ease Off Two-Week High
Across the Atlantic, European stocks were easing off a two-week high as weakness in the utilities sector was countered by gains in insurance and basic resources.
The pan-European STOXX 600 index lost 0.13% and MSCI’s gauge of stocks across the globe gained 0.35%.
Emerging market stocks rose 0.15%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 0.46% higher, while Japan’s Nikkei rose 0.33%.
Dollar Extends Losses as Economic Data Disappoints
The greenback extended its losses against a basket of world currencies in the wake of disappointing economic data.
The dollar index fell 0.53%, with the euro up 0.51% to $1.0932.
The Japanese yen weakened 0.03% versus the greenback at 145.94 per dollar, while Sterling was last trading at $1.2718, up 0.63% on the day.
Slower Economic Growth Lowers Expectations of Interest Rate Hikes
U.S. Treasury yields slipped after data showed slower-than-expected economic growth, which further lowered expectations of interest rate hikes in the next few months.
Benchmark 10-year notes last rose 3/32 in price to yield 4.11%, from 4.122% late on Tuesday.
The 30-year bond last rose 1/32 in price to yield 4.235%, from 4.237% late on Tuesday.
Crude Prices Rise Despite Hurricane Impact
Crude prices heated up as industry data showed a large inventory draw even as Hurricane Idalia made landfall in Florida, a region responsible for about 15% of U.S. oil output.
U.S. crude rose 0.8% to $81.81 per barrel and Brent was last at $86.15, up 0.77% on the day.
Gold Prices Advance Amid Weak U.S. Dollar
Gold prices advanced in opposition to weakness in the U.S. dollar.
Spot gold added 0.5% to $1,945.99 an ounce.
(Reporting by Stephen Culp; Editing by Sharon Singleton)
New Reports Reveal President Biden’s Use of Fake Names in Emails
Hurricane Idalia Approaches Florida, Controversy Surrounds Gadsden Flag
Former President Trump to Face Trial in January 6th Case
Deadly Wildfire in Maui’s Lahaina Continues to Devastate
International Electronics Companies Apply for India’s Incentive Program
Nvidia Corp’s Soaring Rally Excites Investors
" Conservative News Daily does not always share or support the views and opinions expressed here; they are just those of the writer."
*As an Amazon Associate I earn from qualifying purchases
