…Stocks move to record highs. Trade fears calmed. 2Q GDP revised higher to 4.2%. Lettuce mystery explained. AZ election results. McCain’s final honors.
Financial Review by Sinclair Noe for 08-29-2018
DOW + 60 = 26,124
SPX + 16 = 2914
NAS + 79 = 8109
RUT + 6 = 1734
10 y un 2.88%
OIL + 1.17 = 69.70
GOLD + 5.80 = 1207.30
Wall Street extended its rally, with the S&P 500 and the Nasdaq Composite, hitting record highs for the fourth straight session. The Russell 2000 also hit a record high today. The Dow Industrial Average moved higher but is still about 500 points shy of the record close 26,616 set back on January 26. When the Dow hits a record high close, we celebrate with milk and cookies. When the S&P and Nasdaq hit record highs, you can celebrate however you want. Statistically, September is the worst month of the year for stocks. In years when there are midterm elections, the returns have been erratic, and the S&P has averaged a 1 percent decline in September, going back to 1946. But it’s often just temporarily bad news for the market, if history is a guide. In those midterm years, the market most often has rallied in the final quarter for an average gain of 7.5 percent. Trade wars top the list of threats heading into September.
Canada appeared to be taking a more conciliatory approach to its ongoing talks with the United States aimed at salvaging the trilateral North American Free Trade Agreement (NAFTA), days after Washington said it had struck a deal with Mexico. However, Canadian prime Minister Justin Trudeau said: “No NAFTA deal is better than a bad NAFTA deal.”
Economic growth was a bit stronger than initially thought in the second quarter. Gross domestic product increased at a 4.2 percent annualized rate, according to the Commerce Department, in its second estimate of GDP growth for the April-June quarter. That was slightly up from the 4.1 percent pace of expansion reported in July and was the fastest rate since the third quarter of 2014. The economy grew at a 2.2 percent pace in the January-March period. The slight upward revision to growth last quarter reflected more business spending on software than previously estimated and less imported petroleum. Stronger software investment and a smaller import bill offset a downward revision to consumer spending. There are signs some of the momentum was lost early in the third quarter. The government reported on Tuesday that the goods trade deficit jumped 6.3 percent to $72.2 billion in July as a 6.7 percent plunge in food shipments weighed on exports; that is part of the ongoing trade wars. While consumer spending has remained strong early in the third quarter, the housing market has weakened further with homebuilding rising less than expected in July and sales of new and previously owned homes falling due to extremely tight inventory of properties.
The National Association of Realtors said pending-home sales declined 0.7% in July. NAR’s index, which tracks real-estate transactions in which a contract has been signed but the transaction hasn’t yet closed, fell to a reading of 106.2. It was the seventh-straight month in which the index was lower on an annual basis.
A judge has dismissed an antitrust lawsuit by investors that accused nine big banks of rigging the roughly $9 trillion government agency bond market from 2005 to 2015. The judge ruled that investors failed to show they were injured by conducting any specific transactions in U.S. dollar-denominated supranational, sub-sovereign and agency bonds that were tainted by the alleged collusion.
This past March, the US experienced the largest multi-state E. coli outbreak in a dozen years. Contaminated lettuce sickened 210 people in 36 states and killed five. Ninety-six victims landed in the hospital, 27 of whom developed kidney failure. Investigators quickly identified romaine lettuce grown near Yuma as the source of the outbreak, but have had trouble pinpointing the cause for months. According to the FDA, it probably came from a large cattle feedlot at one end of a valley near Yuma. The feedlot was near a canal that supplied irrigation water to several lettuce farms. Or maybe dust from the feedlot blew over the lettuce in the fields. They still don’t know exactly what happened. But the general consensus is that there needs to be more distance between cattle feed lots and lettuce
We now know the lineup for the November general election in Arizona. In yesterday’s primary election, Martha McSally won the GOP nomination and Kyrsten Sinema won the Democratic nomination to run for US Senate. The senate race will be one of the most closely watched in the country, and will draw big dollars; and we can expect a boatload of negative attack ads. Regardless of who wins the Arizona Senate race, the state will send its first woman to the Senate in history.
Doug Ducey will face a challenge from David Garcia in the rave for governor. In Congressional races: incumbent Tom O’Halleran will face Wendy Rogers in District 1; Ann Kirkpatrick versus Lea Marquez Peterson in District 2; incumbent Raul Grijalva is challenged by Nick Pierson in District 3; in District 4, incumbent Paul Gosar will face apparent nominee David Brill; in District 5, incumbent Andy Biggs will face Joan Greene; in District 6, incumbent David Schweikert will face either Anita Malik or Heather Ross – Malik leads; District 7 incumbent Ruben Gallego will be unopposed in November; in District 8, a rematch of a special election earlier in the year with Debbie Lesko against Hiral Tipirneni; and in District 9, former Phoenix mayor Greg Stanton will square off against Steve Ferrara.
For Attorney General, incumbent Mark Brnovich will be challenged by January Contreras. Mark Manoil will go against Kimberly Yee for the role of State Treasurer. Secretary of State will have Katie Hobbs against Steve Gaynor – who defeated incumbent Michele Reagan in the primary. Reagan lost by a 2-to-1 margin. Repeated election-related gaffes dogged her from the 2016 presidential preference election to her failure to fully deliver on a website that would allow voters to track political contributions. In the GOP race for the school superintendent nomination, incumbent Diane Douglas appeared to be on her way out. On the Democratic side, longtime politician David Schapira was trailing teacher and newcomer Kathy Hoffman in an unexpectedly tight race for that party’s nod to oversee Arizona’s schools. Scandals at the Arizona Corporation Commission caught up with Commissioner Tom Forese as he sought a second term at the agency that, most notably, regulates utilities. He was running fourth out of five GOP candidates in a race that will send the top-two finishers to the November general election. And in the Democratic race for the commission, Bill Mundell was trailing newcomer Kiana Maria Sears. Although technically not an incumbent, Mundell had served before on the commission and was making a comeback bid.
Yesterday’s balloting was vintage Arizona screw up. Some Arizona voters were met with locked doors when they showed up to polling sites ready to cast their ballots in the state’s primary elections. In dozens of locations across the state’s most populous county, the equipment that would allow them to do so was malfunctioning or had not yet been set up. Also, some polling places were unable to print ballots and that machine ballot readers were nonfunctional. Some voters met with these problems were given provisional ballots. Maricopa County recorder Adrian Fontes blamed Tempe-based Insight Enterprises, the contractor responsible for tech support and the setup of voter check-in equipment. Fontes said Insight was contracted to provide 103 technicians to set up equipment Monday, but only 73 showed up. The company denies the allegation. Let’s hope someone is working on contingency plans for when things go wrong on Election Day.
The body of the late senator John McCain is lying in state at the Arizona Capitol. A police escort processional carried McCain’s body to the Capitol as scores of Arizona veterans, military, law enforcement, fire, and first responders lined the sides of the Capitol Plaza for his arrival. The Capitol is opened to members of the public who want to pay their respects. Tomorrow, Arizonans will line a stretch of Interstate 17 as Arizona National Guard personnel and a motorcade makes its way through Phoenix to a memorial service at North Phoenix Baptist Church. McCain’s wife, Cindy, arrives at the Arizona State Capitol at 9 a.m. MST to pay her respects. An hour later, a memorial service takes place at the church. Senator McCain’s family and friends, along with state, local and tribal officials, and business and civic leaders from across Arizona have been invited to attend the service. In addition, about 1,000 seats have been made available to the public. Former Vice President Joe Biden is expected to speak at the service. The service will be streamed online. As the ceremony concludes, McCain’s body will depart Arizona for the last time. The casket is placed on a plane at Phoenix Sky Harbor International Airport, departing for Washington, D.C. On Friday, another viewing is held at the U.S. Capitol ahead of a final memorial service at the Washington National Cathedral, which takes place at 11 a.m. ET. Saturday morning, McCain’s casket is moved by members of the Armed Forces to a motorcade, which takes him to the Washington National Cathedral. The motorcade will pause at the Vietnam Veterans Memorial where Cindy McCain will lay a ceremonial wreath honoring all whose lives were lost during the Vietnam War. Then at 10 a.m. ET, a private service is held for family, friends, colleagues and various other political leaders. Presidents George W. Bush and Barack Obama are expected to deliver eulogies.