Stocks had another solid showing to start the week, though they’re slightly in the red in the early going today. Crude oil, gold, and silver are mixed, while the dollar is flat and Treasuries are a bit lower.
On the news front...
We’ve talked plenty about China’s economic woes. But another major world economy is struggling with lackluster growth, manufacturing problems, and domestic squabbles...Germany. The International Monetary Fund projects German GDP to shrink this year, in part because of slowing exports to China. Lackluster infrastructure spending and an aging population/labor force are also hampering growth.
As for China, rallies spurred by recent stimulus measures have been fizzling out quickly. Analysts suggest what’s really needed is a policy “bazooka” – something like the massive 4 trillion yuan ($548 billion) stimulus package China threw at the economy back in 2008 when the Great Financial Crisis torpedoed world growth.
Diversified industrial giant 3M (MMM) agreed to pay $6 billion to settle claims related to earplugs it sold to the US military. Claimants alleged they suffered hearing damage, while MMM maintained they worked fine for soldiers who followed instructions. In the end, the settlement price tag came in a few billion dollars below estimates...and MMM shares rose on the news.
Meanwhile, Hurricane Idalia is bearing down on the Florida Gulf Coast. Winds were recently at 80 mph, making it only a Category 1 storm. But the National Hurricane Center expects the system to strengthen to a Category 3 with 120 mph winds before making landfall somewhere in the Florida “Big Bend” area. Best of luck to everyone in the storm’s path.