U.S. stocks fell into the red on Tuesday as investors weighed a series of new economic indicators. Meanwhile, reports that Iran is preparing a possible missile attack on Israel caused bond yields to fall and oil prices (CL=F) to rise.
The Dow Jones Industrial Average (^DJI) fell about 0.5% and the S&P 500 (^GSPC) fell about 1% as both major indexes hit new highs last quarter. The Nasdaq Composite Index (^IXIC), which has a high proportion of high-tech stocks, suffered widening losses in early trading, falling about 1.7%.
Fresh jobs and manufacturing data kick off the new quarter as investors look for further clues about the future of the Fed’s easing cycle after Fed Chairman Jerome Powell suggested the central bank is in no hurry to cut rates quickly. Ta.
The number of job openings rose surprisingly in August, further reinforcing the idea that although the labor market is cooling, it is not slowing down rapidly. New data shows there were 8.04 million job openings at the end of August, up from 7.71 million in July.
On the other hand, the US manufacturing industry remained strong in September. The Institute for Supply Management (ISM) announced that last month’s manufacturing PMI was flat at 47.2. A PMI below 50 indicates a contraction in the manufacturing sector, so although the index remained steady, the index remained weak.
Read more: How Fed Rate Cuts Affect Bank Accounts, CDs, Loans, and Credit Cards
The data will prepare investors for Friday’s September jobs report, the highlight of a week focused on economic data. Investors are watching to see if the U.S. economy is cooling, not collapsing.
Meanwhile, a strike by longshoremen on the East Coast and Gulf Coast threatened to halt half of U.S. shipping. The disruption caused by a large-scale economic shutdown could cost the economy billions of dollars a day, cause inflation, put jobs at risk, and influence U.S. politics.
Live6 update
Tuesday, October 1, 2024 8:41 a.m. PDT
Port strikes create risks, but here’s why they don’t promote inflation
A strike by longshoremen began early Tuesday on the East Coast and Gulf Coast, halting half of U.S. shipping and threatening to cost the economy billions of dollars a day.
Ryan Petersen, Flexport’s founder and CEO, said of Yahoo Finance’s market dominance before the strike began: “If it lasts for a few days or a week or more, there will be a huge cascading effect. It will come out,” he said.
He said 15% of the world’s container ships could be grounded, resulting in a “significant reduction in shipping capacity” and supply chain disruptions “much more severe” than the U.S. economy experienced during the pandemic. It was pointed out that it could cause
But Eugenio Aleman, chief economist at Raymond James, doesn’t expect the strike to accelerate inflation, which is the biggest concern as the halt officially begins.
“The strike affects approximately 40% of U.S. container volumes and comes at an inopportune time, ahead of the important holiday shopping season and election, but like the 2021-2022 port closures, it is likely to result in substantial inflation,” Aleman said. It is not intended to promote.” New notes on Tuesday.
“The reason is slower consumer demand. Slower job growth, more discerning consumers, and expected lower shelter costs should limit the upside impact. ”
Read more about the strike and its impact on the economy, politics, and more.
Tuesday, October 1, 2024 7:51am PDT
Oil prices rise on Iranian missile attack headlines
Oil prices rose on Tuesday morning following headlines that Iran was preparing a missile attack on Israel.
West Texas Intermediate (CL=F) rose about 3% to trade above $70 a barrel. Brent crude oil (BZ=F), the international benchmark price, also rose by about 2% and remains at a level slightly below $74 per barrel.
“The United States has indications that Iran is preparing imminently for a ballistic missile attack against Israel,” a senior White House official said in a statement cited by multiple news outlets. “We are actively supporting defense preparations to protect Israel from this attack. A direct military attack on Israel from Iran would have serious consequences for Iran.”
Tensions have risen in the Middle East in recent days after Israel launched ground air strikes in southern Lebanon targeting the Iranian-backed militant group Hezbollah.
Stocks fell on the possibility of a missile attack and mixed employment and economic data released early Tuesday, with the tech-heavy Nasdaq leading the decline.
Tuesday, October 1, 2024 7:04 a.m. PDT
Job openings increased in August, turnover rate decreased
The number of job openings rose surprisingly in August, further reinforcing the idea that although the labor market is cooling, it is not slowing down rapidly.
There were 8.04 million job openings at the end of August, up from 7.71 million in July, according to new data from the Bureau of Labor Statistics released Tuesday. Economists surveyed by Bloomberg expected the report to show a slight increase in job openings in August to 7.67 million.
July’s figures have been revised upward from the originally announced number of 7.67 million job openings.
According to the Job Openings and Labor Turnover Survey (JOLTS), the number of employed people in the same month was 5.31 million, down from 5.41 million in July. The hiring rate in August was 3.3%, down from 3.4% in July. Tuesday’s report also showed the turnover rate, a sign of worker confidence, fell to 1.9%, the lowest level since June 2020.
Tuesday, October 1, 2024 06:34 PDT
Stocks have a slow start to October
U.S. stocks started lower on Tuesday, the first trading day of the October fourth quarter.
The Dow Jones Industrial Average (^DJI) fell about 0.4%, and the S&P 500 (^GSPC) fell about 0.3%, after both major indexes secured new record closing prices on Monday. The Nasdaq Composite Index (^IXIC), which has a high proportion of high-tech stocks, also fell, dropping about 0.3%.
Tuesday, October 1, 2024 6:19 a.m. PDT
Stellantis shares fall further after Jeep recall over fire risk
Jeep maker Stellantis (STLA) fell 1% in premarket trading Tuesday after announcing a recall of more than 150,000 hybrid Jeep SUVs due to “potential fire hazard.”
The drop in Stellantis shares comes just one day after the stock plummeted 12.5% on a bleak outlook for the company’s North American operations. Stellantis, which also makes Dodge and Ram vehicles, said it expects full-year profit margins to be between 5.5% and 7%, rather than its previous double-digit outlook. To survive the deteriorating situation in the global auto industry, automakers are planning cost-cutting measures and discounts, Yahoo Finance reporter Pras Subramanian explained about market dominance.
Meanwhile, the newly issued recall affects the 2020-2024 Jeep Wrangler 4xe and the 2022-2024 Jeep Cherokee 4xe SUV. The company said an internal investigation found 13 fires related to the issue, but estimates that only 5% of recalled vehicles pose a fire risk.
Tuesday, October 1, 2024 5:47am PDT
Barclays pulls no punches with Apple
Barclays analyst Tim Long dropped the mic on Apple (AAPL) this morning in a new note, pointing out weak demand for the iPhone 16.
Here’s what Long has to say:
“In early July, a few weeks after the introduction of Apple Intelligence, a lot of news broke about iPhone production increases.Based on recent supply chain channel research, AAPL cut approximately 3 million units in key semiconductor components. If confirmed, iPhone sales in the December quarter would be the fastest production cut in recent history. Our sell-through research shows global iPhone 16 sales are down 15% year-over-year in the first week of sales. It also tracked iPhone inventory status. This suggests that demand for IP16 was weaker compared to last year, although supply chain constraints for IP15 Pro models led to longer lead times than last year. Demand has exceeded expectations, particularly across the U.S. and China. All of the above data indicates that demand is slower than previously expected. ”
Long reiterated his underweight rating (equivalent to sell) on Apple.
