Congress ended its summer recess as House and Senate lawmakers return to Washington facing a deadline at the end of the month to keep the government open. As Democrats as Republicans maneuver for advantage, it is unclear how an agreement can be reached or how long it may last. Speaker Mike Johnson told rank and file Republicans that he would like to hold a vote as soon as this week on temporary funding that would keep government agencies open until March. But Democrats in both chambers only want temporary funding to last until December; long enough to get past the election, but before a new Congress is seated.
In economic news, all eyes are back on inflation this week with the release of the August CPI data on Wednesday and PPI on Friday.
Historically, this isn’t a great month for stocks:
But Monday was!
The S&P 500 gained 0.9% on Monday after losing 4% last week. The Dow closed almost 500 points higher after dropping 1200 points last week. Nasdaq was up 0.8% after its worst week in over two years, aided by a 3% jump in Nvidia.
sources: CNBC, WSJ, Bloomberg
Closing snapshot
source: MarketWatch
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How low will they go?
Crypto news
U.S. Bitcoin ETFs posted their longest run of daily outflows since they premiered at the beginning of 2024. Investors pulled $1.2 billion from the group of 12 ETFs over the eight days ending September 6th. That said, BTC started the week off higher, though it is still off its highs by about 30%.
sources: Bloomberg, WSJ, BLS, CNBC
“Your fears will always find you.” – David Goggins
More bad news for China
Core inflation rose less than expected last month as extensive deflationary pressures put economic growth at increased risk. China’s CSI 300 Index fell 1.0% Monday and is on the verge of hitting its five-year lows.
sources: Bloomberg, WSJ, CME Group
Europe needs money
In a highly anticipated report, former ECB Chief Mario Draghi stated that the EU needs to invest as much as $884 billion more a year if it wants to remain competitive with China and the U.S. Draghi recommended yearly bond issuance to achieve this target.
sources: Bloomberg, WSJ
Labor growth
While overall job growth in the U.S. rebounded in August, the data for IT workers was less encouraging, Unemployment for IT professionals rose to 6% according to BLS data. Reasons behind the uptick include an ongoing focus on profitability and efficiency, along with a continued shift towards automation and AI.
sources: Bloomberg, WSJ
In other news:
Toyota is cutting its global EV output by 30% due to slower demand.
Drought conditions on the Mississippi River are reducing water levels and sending barge rates soaring.
In a fresh risk to global trade, Donald Trump pledged to invoke a 100% tariff on countries that shun the dollar.
Dock workers from Maine to Texas are finalizing strike plans with less than a month left on their contract and no negotiations scheduled with port employers.
Boeing agreed to increase wages by 25% in a four year deal aimed at preventing a crippling strike.
sources: WSJ, CNBC, Bloomberg, IBD, MarketWatch
The stinger
Disclaimer
This letter is not offering investment, trading, or investment advice nor is based on any individual portfolio or business operation. We are are not a registered investment, stock nor commodity advisor. One should consult with their own registered advisor to discuss investment strategies that are appropriate for their business or personal goals, risk tolerance and financial situation. Information in this report and on any website is derived from a variety of source believed to be reliable however no representation is made that the information is accurate, complete or correct. These lessons, newsletter and site content is not intended nor shall not constitute or be construed as an offer or recommendation to “buy”, “sell”, “trade” or invest in any securities, commodities, futures, options or other asset referred to in said lessons, reports or newsletters. Rather, this research is intended to identify situations and circumstances that those in the trading community should be aware of to better help assess and improve their own risk management skills.
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