Wall Street kicks off a new month and quarter tomorrow after a surprisingly strong series of gains in recent weeks, but with conflicting signals about the economy from the stock and bond markets.
The US stock indexes ended Friday with a robust performance for the week, last month and the third quarter, confounding many analysts looking for a more defensive posture in light of slowing economic conditions.
In the week to Friday, the Dow Jones Industrial Average climbed 1.5 percent to 11,679.07 after the blue-chip index flirted with its all-time highs hit in January 2000.
The Dow was up 2.6 percent for the traditionally weak month of September and 4.7 percent for the quarter, the best third-quarter performance since 1995.
The broad-market Standard and Poor's 500 advanced 1.6 percent on the week to 1,335.85. It was up 2.6 percent for the month and 5.2 percent for the quarter.
The NASDAQ composite increased 1.8 percent for the week to 2,258.43. The tech-heavy index climbed 3.4 percent for the month and nearly four percent for the quarter.
"The stock market has continued its impressive rally," said Dick Green at Briefing.com, adding that the turning point was a signal from Federal Reserve chairman Ben Bernanke in July that the cycle of interest-rate hikes was coming to an end. "This improved rate outlook is coupled with a continued good outlook on the other basic fundamental factor: Earnings. Economic growth is clearly slowing, but the earnings parade keeps going."
However, analysts say financial markets are sending mixed signals: The stock market sees a positive picture by lifting the Dow to near-record territory while the bond market has been flashing signals of a possible recession.
Robert Brusca at FAO Economics said the inversion of the yield curve -- with rates for short-term bonds topping those for longer-term maturities -- "has given off reliable signals for recession and more reliable signals for economic slowing."
"Stocks and bonds appear to be looking at two very different economies these days," said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.
"Bonds are priced for a significant US economic slowdown, but stocks just aren't seeing it that way," he said.
But Porter noted that "one possible explanation for these seemingly divergent views is that the common factor is a downgrading of the inflation outlook in recent weeks, a potential plus for both markets."
The "disconnect" between the two views "would suggest that financial markets are not assuming the worst for the US economy, and are instead priced for a more benign moderation in growth and, more importantly, cooling inflation pressures. The primary risk to this soft landing scenario would be a sudden snap-back in energy prices."
In the coming week, investors turn their attention to economic reports on construction spending, manufacturing and later on monthly payrolls. The market is also bracing for the waver of quarterly earnings reports later in the month.
"We will see the market switch its focus to third quarter earnings reports and the outlook for the fourth quarter and 2007," said Fred Dickson at DA Davidson.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last