Is the summer slump finally subsiding? There’s no way to say for certain, of course. But a powerful “up” day yesterday and a minor “W” on the S&P 500 chart makes the backdrop look more encouraging.
Equities are mixed so far today, as are Treasuries, gold, and silver. Crude oil is up modestly, while the dollar is down.
On the news front...
Somewhat softer “JOLTS” data helped fuel the market rally yesterday because it could help take another Federal Reserve rate hike off the table. The acronym JOLTS stands for Job Openings and Labor Turnover Survey. The latest monthly report from the Labor Department showed that job openings fell to 8.83 million in July, the lowest since March 2021. Fewer workers are quitting voluntarily, too.
Chairman Jay Powell has made clear he wants job and wage growth to slow in order to help stem inflation. So, from a policy (and Wall Street) standpoint, this is “good” news. The same goes for this morning’s ADP report for August, which showed a smaller-than-expected 177,000 jobs created.
Here come the bailouts...in CHINA. Troubled Zhongrong International Trust Co. looks set for a state-led rescue designed to ring-fence the company and prevent broader credit contagion in China. I wrote about China’s distressed trust companies earlier this month and how some analysts fear a “Lehman Moment” for the country’s banking and lending sector.
“How to Play the Property Meltdown” isn’t exactly a subtle headline. But the Wall Street Journal story with it has some solid, practical information for investors looking to bargain hunt in commercial real estate. There is more than $200 billion in money waiting to scoop up depressed CRE on the cheap, though “forced sales” aren’t flooding the market yet due to the structure of a lot of CRE financing. As more loans mature, more holders will have to bite the bullet and sell at the prices they can get (not the ones they want!)
Finally, Hurricane Idalia came ashore in the Big Bend region of Florida earlier this morning. The Category 3 storm packed winds of around 125 mph at landfall. Fortunately, it hit a sparsely populated area of the coast rather than one of the state’s major population centers. But associated tornadoes, heavy rain, and windy conditions will still affect a large part of the northern half of the state.