Tuesday, October 5, 2021
Pre-market futures are headed back up this Tuesday morning, following another deep day in the red Monday, especially for the tech-heavy Nasdaq, which dropped another 2%+ in its first trading day of the week. With some of the most high-profile names in tech now double-digits off their all-time highs, bargain shopping looks to be in order. The Dow is +150 points at this hour, the S&P 500 is +20 and the Nasdaq is +45 points.
One report out this morning is doing nothing to move the needle on stock-buying, but may have longer-term implications. That is the U.S. Trade Deficit for August, which sank (or “rose,” depending on your perspective) to its widest margin ever: -$73.3 billion, well off the expected -$70.6 billion and the downwardly revised July print of -$70.3 billion. It’s also the third-straight month sub-$70 billion, also for the first time in history.
Exports, led by natural gas, came in at $213.7 billion, tempered by lower totals of auto parts, corn and travel. Imports rose +1.47% to an all-time high $287 billion, as our gap widened among our top trading partners: China added +$3.1 billion to $28.1 billion, and Canada was +$1.4 billion to $5.1 billion. Since the start of the 21st century, the U.S. trade deficit has mostly been on a steep downward trajectory, save for the initial recovery from the Great Recession more than a decade ago.
Speaking of China, another major real estate developer there looks to be in financial trouble. Fantasia, a Shenzhen-based luxury developer, has failed to repay a nearly $206 million bond and another $109 million loan to a company interested in buying up many of Fantasia’s assets. This news follows last week’s plight of Evergrande, an even bigger Chinese real estate developer, which reported it had missed payment on a major loan, as well.
In the past, such failures would have likely been tidied up by the central Chinese government, but President Xi Jinpeng has begun to more aggressively employ a different strategy against fast-growing business entities in the country. That is, it now takes a harder line against big companies taking big risks. Some say it foreshadows economic difficulties in China, which are worse than being reported. Others, like the New York Times this morning, see it as a power grab by President Xi.
After our opening bell this morning, September reads for PMI and ISM Services will hit the tape, with expectations in-line (PMI) and slightly below (ISM) August headline numbers. Both surveys are expected to come in comfortably ahead of the benchmark 50, which represents growth. The question is: how far, how fast is the Services sector growing in the U.S.? Last week’s PMI and ISM Manufacturing numbers were somewhat hotter than expected.
Questions or comments about this article and/or its author? Click here>>
Image: Bigstock
Pre-Markets Bounce Again, Trade Deficit Hits New Record
Tuesday, October 5, 2021
Pre-market futures are headed back up this Tuesday morning, following another deep day in the red Monday, especially for the tech-heavy Nasdaq, which dropped another 2%+ in its first trading day of the week. With some of the most high-profile names in tech now double-digits off their all-time highs, bargain shopping looks to be in order. The Dow is +150 points at this hour, the S&P 500 is +20 and the Nasdaq is +45 points.
One report out this morning is doing nothing to move the needle on stock-buying, but may have longer-term implications. That is the U.S. Trade Deficit for August, which sank (or “rose,” depending on your perspective) to its widest margin ever: -$73.3 billion, well off the expected -$70.6 billion and the downwardly revised July print of -$70.3 billion. It’s also the third-straight month sub-$70 billion, also for the first time in history.
Exports, led by natural gas, came in at $213.7 billion, tempered by lower totals of auto parts, corn and travel. Imports rose +1.47% to an all-time high $287 billion, as our gap widened among our top trading partners: China added +$3.1 billion to $28.1 billion, and Canada was +$1.4 billion to $5.1 billion. Since the start of the 21st century, the U.S. trade deficit has mostly been on a steep downward trajectory, save for the initial recovery from the Great Recession more than a decade ago.
Speaking of China, another major real estate developer there looks to be in financial trouble. Fantasia, a Shenzhen-based luxury developer, has failed to repay a nearly $206 million bond and another $109 million loan to a company interested in buying up many of Fantasia’s assets. This news follows last week’s plight of Evergrande, an even bigger Chinese real estate developer, which reported it had missed payment on a major loan, as well.
In the past, such failures would have likely been tidied up by the central Chinese government, but President Xi Jinpeng has begun to more aggressively employ a different strategy against fast-growing business entities in the country. That is, it now takes a harder line against big companies taking big risks. Some say it foreshadows economic difficulties in China, which are worse than being reported. Others, like the New York Times this morning, see it as a power grab by President Xi.
After our opening bell this morning, September reads for PMI and ISM Services will hit the tape, with expectations in-line (PMI) and slightly below (ISM) August headline numbers. Both surveys are expected to come in comfortably ahead of the benchmark 50, which represents growth. The question is: how far, how fast is the Services sector growing in the U.S.? Last week’s PMI and ISM Manufacturing numbers were somewhat hotter than expected.
Questions or comments about this article and/or its author? Click here>>