The stock market dropped today as worries continue over rising COVID infections, signs that economic growth is slowing and concerns about the direction of fiscal stimulus and monetary policy. Stock valuations have been very high and there is uncertainty if this can be maintained if growth does not continue to accelerate. Several large investment banks are urging caution about US stocks at their current prices. September is historically a poor month for the market and this may happen again after stocks have risen for seven straight months.
The Federal Reserve issued its Beige book commentary on the state of the economy in July and August. It reported that inflation is rising because of a supply shortage that is affecting businesses and that this will likely be passed on to consumers. A shortage of workers is resulting in higher wages. The Fed’s preferred measure of inflation in July was 3.6% but other measures report a higher rate. Economic growth slowed to a moderate pace, driven by increased Delta variant COVID infections.
Job openings were at a record high in July at 10.9 million, up from the previous record of 10.2 million in June. Openings have been rising since January. The estimate was 10.1 million. The JOLTS (Job openings and Labor Turnover Survey) showed that hiring was 6.7 million compared to 6.8 million in June, layoffs were higher at 1.3 million. The job openings : hires ratio, a measure of the ability of companies to find workers, rose to 1.64 in July. There were 4 million workers who quite their jobs which is generally sign that they are confident of finding other employment.
Consumer credit in July increased to 17 billion an annual rate of 4.7%. The estimate was 26 billion. The June value was 37.9 billion and May 34 billion. Revolving credit such as credit cards rose 6.7% compared with 22.4% in June. Nonrevolving credit, mainly auto and student loans, were up 4.1% compared with 7.2%. This data does not include mortgage loans which is the largest amount of consumer debt.
Economic reports for September 9
Initial jobless claims week of September 4: estimate 335,000, previous 340,000
Continuing jobless claims week of August 28: previous 2.75 million.
The SP 500 is down by 0.13% to close at 4514.07. The index is down 0.22% over five days, up 1.49% over one month, up 6.98% over three months and up 32.81% over one year.
The trailing P/E is 31.26 compared to 36.19 one year ago and estimated future P/E 22.26. Dividend yield is currently 1.31 compared with 1.75 one year ago.
Leading stocks were PRGO up 3.74%, GPN up 7.19%, GIS up 4.56%, RE up 4.46% and KHC up 3.93%.
Trailing stocks were PHM down 6.05%, FCX down 5.47%, UHS down 4.28%, STX down 4.24% and SLB down 4.20%.
The Dow Jones industrial Average is down by 0.20% to close at 35031.07. The DOW is down 0.80% over five days, down 1.28% over one month, up 1.70% over three months and up 25.38% over one year.
The trailing P/E is 23.81 compared with 27.43 year ago and an estimated future P/E of 19.24. The current dividend yield is 1.82% compared with 2.20 one year ago.
Leading stocks were KO up 1.35%, V up 1.25%, MMM up 1.24%, MCD up 1.03% and HD up 0.80%.
Trailing stocks were DOW down 1.91%, UNH down 1.39%, BA down 1.33%, GS down 1.30%, and NKE down 1.19%.
The NASDAQ composite is down by 0.57% and closed at 15286.64. NASDAQ is down 0.15% over five days, up 3.53% over one month, up 9.88% over 3 months and up 37.20% over one year.
Leading stocks were EFTR up 111.77%, HLBZ up 84.02%, KDMN up 71.13%, ATER up 29.35% and ICUI up 26.23%.
Trailing stocks were INMB down 22.55%, ALEC down 18.97%, RLYB down 18.83%, ABSI down 17.22%, and SQBG down 16.24%.
The MidCap SP400 is down by 0.35% to close at 2718.56. The SP400 is down 1.51% for the past 5 days, down 0.85% for the past month, down 0.51% for the past 3 months and up 44.56% over the past year.
Leading stocks were ICUI up 26.23%, XEC up 3.78% and LGND up 3.62%.
Trailing stocks were COTY down 10.67%, ADNT down 6.85% and OPCH down 6.21%
The SmallCap SP600 is down by 0.88% to close at 1344.46. The SP600 is down 1.96% for the past 5 days, down 1.63% for the past month, down 4.10% for the past 3 months and up 52.90% over the past year.
Leading stocks were ORGO up 3.85%, CHRS up 3.71% and AMEH up 3.65%.
Trailing stocks were CONN down 8.23%, HLX down 7.57% and OIS down 6.89%.
The CBOE VIX is down 0.99% and closed at 17.96. The VIX is up 11.48% over five days, up 11.83% over one month, up 0.39% over three months and down 37.66% over one year.
On the New York stock exchange 1279 stocks advanced and 2038 declined, while on Nasdaq 1388 advanced and 3013 declined.
There were 97 new 52 week highs and 37 new 52 week lows on NYSE with 83 new highs and 53 new lows on NASDAQ.
The 2 year Treasury note yield is 0.220% and 10 year is 1.344%. The 10 year yield is up 4.4% over five days, up 0.7% over one month, down 14.6% three months ago, and up 63.9% one year ago.
SP500 Sector Performance % change
Consumer Staples +0.77
Real Estate +0.55
Consumer Discretionary +0.16
Health Care -0.08
Information Technology -0.41
Communication Services -0.43
Utilities has been up 0.40% over five days, up 2.00% over one month, up 6.64% over three months and up 16.91% over one year.
Energy has been up 0.09% over five days, down 5.48% over one month, down 14.06% over three months and up 41.59% over one year.