Signs of Stagflation Weigh on Stocks and the US Dollar

The SIA Wealth Morning Minutes will not be issued tomorrow. They should return on Monday September 14th.

More signs of Stagflation emerged this morning. US consumer prices increased last month in line with expectations (2.9% vs street 2.9% and previous 2.7%). Perhaps more importantly, we received another troubling employment number as weekly US initial jobless claims jumped significantly above expectations (263K vs street 235K), suggesting a weakening economy. This news increases pressure on the Fed to cut interest rates at its next meeting.

On this news, the US 10-year treasury note yield has dropped back down to 4.00% and the US Dollar has started to tumble as well. US index futures have started to give back previous gains and are currently up 0.1% to 0.2%. Gold has started to bounce up off of early morning lows but is still down 0.6%. Concerns about potentially weakening demand in a struggling economy has knocked Crude Oil down 1.5% so far today. Copper is steady so far.

The European Central Bank maintained its benchmark interest rate at 2.00% at it’s meeting this morning, remaining on hold since a previous series of rate cuts ended back in May. European trading finds the Dax up 0.2%, the FTSE up 0.5% and the CAC up 0.9%. The Euro is down 0.1% so far today, a similar decline to the Pound and Loonie.    

It’s a light day for earnings reports, Adobe reports after the close.

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