Laura-Hurricane heading directly for Houston and is expected to be a CAT 3 now. Gasoline rallied 6.46% yesterday and 1.74% this morning. Crude oil lagging with a rally of 0.66% yesterday and 0.21% this morning. (BBG) M =Major Hurricane cat 3 or higher
Dow industrial Shake Up … From Mizuho “Exxon Mobil, Pfizer and Raytheon were dropped from the DJIA in the biggest reshuffling of the index in 7 years. Salesforce.com, Amgen and Honeywell to enter. Only seven years ago Exxon was the world’s largest company. Yesterday it was kicked out of the DJIA. Exxon, the longest-serving member of the Dow, was removed from the index after seeing its value plunge by more than half in the past six years, from more than $450 billion as recently 2014 to about $180 billion today. But Even after the changes and AAPL’s weighting dropping from 12%+ to under 3%, the Dow will still have a 23% weighting in Tech.
China Daily “ Constructive dialogue between U.S. and China ,decoupling reports wide of mark Further “This follows a call from Lighthizer and Mnuchin to Chinese Vice President Liu He, that suggests the Phase One trade deal is back on schedule something that has been uncertain lately and stocks markets have experienced decent support overnight.(IFR)
German Aug Ifo new business climate 92.6 vs 92.2 expected from 90.4 previously. Current conditions at 87.9 vs 86.9 expected and 84.5 with expectations at 97.5 vs 98.0 expected and 96.7 previously. As such on the high side overall except for expectations. (IFR News)
Markets… Yields higher throughout Europe Bunds +5 bps, Italian BTPs highest in a month, tomorrow 15 year bund auction might be weighing a bit ,2 year Schatz auction today okay German Curve steepening indicating some optimism surrounding economy. 30 year yields higher as well Germany +7 bps Italy +8 Bps Netherlands +6 bps Bonds and Ultras weighed down by IG issuance, again The latest Abu Dhabi marketing 50 year $ bonds today we see 2 year auction, tomorrows 5 and Thursday 7 years. Powell on Thursday a reminder. Optimism regarding US China, better German Data and Possibly some curve trades as both Germany and US trade steeper. Dollar sideways to lower the trend is sideways over last week likely waiting to hear from Powell before deciding which way to go. Grains Higher as Crop condition drop and optimism from China Comments Corn +1.8% Soy +.5% yesterday SPX gapped open higher touched and closed at an all time high Lumber a bit of an adjustment first down day in 16 Chart look ominous but we need to see todays close to determine if yesterday was just a bump in the uptrend or something else WSJ reporting that” U.S. homebuilders have asked trump to resolve trade issues with China” to make lumber cheaper.