U.S. equities ended lower, with the S&P 500 Index retreating from its all-time high, as resurfaced trade and global growth concerns again haunted the markets, overshadowing upbeat earnings results from Dow member Apple, as well as Facebook, Starbucks and Kraft Heinz. Chinese business activity data was again soft and domestic regional manufacturing output unexpectedly dropped, ahead of tomorrow’s key U.S. nonfarm payroll and national manufacturing reports. Treasury yields were lower, along with the U.S. dollar and crude oil prices, while gold was higher.
The Dow Jones Industrial Average (DJIA) fell 140 points (0.5%) to 27,046, the S&P 500 Index lost 9 points (0.3%) to 3,038 and the Nasdaq Composite decreased 12 points (0.1%) to 8,292. In heavy volume, 1.1 billion shares were traded on the NYSE and 2.2 billion shares changed hands on the Nasdaq. WTI crude oil fell $0.88 to $54.18 per barrel and wholesale gasoline was down $0.03 at $1.59 per gallon. Elsewhere, the Bloomberg gold spot price was $15.88 higher at $1,511.54 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—declined 0.4% to 97.31.
Personal income rose 0.3% month-over-month (m/m) in September, matching the Bloomberg forecast, and versus August’s upwardly-revised 0.5% rise. Personal spending increased 0.2%, just shy of estimates of a 0.3% increase, and following August’s favorably-revised 0.2% gain. The September savings rate as a percentage of disposable income was 8.3%. The PCE Deflator was flat m/m, in line with expectations to match the prior month’s unrevised reading. Compared to last year, the deflator was 1.3% higher, below expectations to match August’s unrevised 1.4% increase. Excluding food and energy, the core PCE Index was unchanged m/m, missing expectations calling for it to be in line with August’s unadjusted 0.1% gain. The index was 1.7% higher y/y, matching estimates and below August’s unrevised 1.8% increase.
Weekly initial jobless claims grew by 5,000 to 218,000, versus estimates of 215,000, with the prior week’s figure being revised higher by 1,000 to 213,000. The four-week moving average dipped by 500 to 214,750, while continuing claims increased by 7,000 to 1,690,000, north of estimates of 1,679,000.
The Q3 Employment Cost Index gained 0.7%, in line with estimates and compared to Q2’s unadjusted 0.6% rise.
The Chicago PMI unexpectedly fell further into a level depicting contraction (a reading below 50), dropping to 43.2 in October from September’s 47.1 level and compared to expectations of a slight improvement to 48.0. The index posted the fourth month of contraction in five and hit the lowest level since December 2015, as new orders, production, order backlog and employment all declined.
Treasuries were higher, as the yields on the 2-year and 10-year notes, along with the 30-year bond, dropped 10 bps to 1.52%, 1.70% and 2.18%, respectively.
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