THE LIVYJR FILES

MARKETWATCH

"Dow notches fifth straight gain as investors eye potential change in leadership"

By Chris Matthews and William Watts

Published: Sept 10, 2019 4:23 p.m. ET

U.S. stocks closed at session highs Tuesday as a rally in energy, industrials and materials stocks overshadowed a selloff in momentum-driven technology shares, helping the Dow extend its win streak to five sessions and the S&P 500 index avoid consecutive declines after trading in the red for most of the session.

Apple Inc. was in the spotlight as it announced new model iPhones and other products at its annual launch event Tuesday afternoon.

How did the major benchmarks fare?

The Dow Jones Industrial Average rose 73.92 points, or 0.3%, to 26,909.43, while the S&P 500 index added 0.96 point, or less than 0.1%, to 2,979.39.

The Nasdaq Composite index retreated 3.28 points, or less than 0.1%, to 8,084.15.

At session lows, the Dow fell 118.46 points, or 0.4%, the S&P 500 lost 21.42 points, or 0.7% and the Nasdaq was down 85.75 points, or 1.1%.

What drove the market?

Investors eyed a potential rotation in market leadership from defensive names and fast-growing tech stocks into cyclical sectors, including energy, industrials and materials, all of which have posted gains Tuesday, in contrast with the S&P 500.

“The big story is the continuing rotation that we saw begin a couple days ago,” Willie Delwiche, market strategist with R.W. Baird told MarketWatch.

“If we can actually move away from narrow, defensive leadership into cyclical and small-cap leadership, that would be a healthy development for the market.”

Defensive sectors, including real estate, utilities and consumer staples weighed on the major indexes Tuesday while small capitalization stocks, as measured by the Russell 2000 posted gains.

The share of stocks advancing versus declining on the New York Stock Exchange came in at nearly 3-to-2, a potentially bullish signal going forward, Delwiche said.

Information technology shares were also under pressure Tuesday, down 0.5%, one day after the attorneys general of 50 U.S. states announced an investigation into Google’s ‘potential monopolistic behavior’ on Monday, underscoring regulatory concerns surrounding large tech firms.

Shares of Facebook Inc., Amazon.com Inc., Netflix Inc. all lost ground Tuesday amid a broader sell off momentum-driven growth stocks, as indicated by the 1.6% decline in the iShares Edge MSCI USA Momentum Factor exchange-traded fund.

“The risk is that we get half-way through this rotation, stall out and are left with no momentum anywhere,” Delwiche said.

Meanwhile, concerns about the U.S.-China trade battle appear to have moved to the back burner for investors after being blamed for volatile market action in August.

China has reportedly offered to buy more American agricultural products in exchange for a delay in upcoming tariffs and the easing of a ban against doing business with Chinese telecommunications giant Huawei Technologies, according to the South China Morning Post.

The report comes on the heels of comments by U.S. Treasury Secretary Steven Mnuchin, who told Fox Business Network Monday that he views renewed discussions with Beijing as a sign of good faith.

“The U.S. and China are due to meet next month, and according to Steven Mnuchin…the U.S. is prepared to do a deal, as long as it is good for the U.S.,” said David Madden, market analyst at CMC Markets UK, in a note.

“The lack of hostilities between the U.S. and China is likely to keep stocks in their upward move.

The European Central Bank is expected to deliver additional monetary stimulus when its policy makers meet Thursday, though some officials have appeared to push back against expectations for an aggressive package of measures combining further interest-rate cuts with a new bond-buying program.

The U.S. National Federation of Independent Business on Tuesday said its small-business optimism index fell 1.6 points to a seasonally adjusted 103.1 in August, its worst showing since March.

The rate at which Americans quit their jobs hit an all-time high in July, the Labor Department estimated Tuesday, suggesting that workers are confident in the strength of the job market.

Job openings fell slightly during the month, while layoffs remained at low levels.

Which stocks were in focus?

Investors were watching shares of Apple after it held its annual fall roll-out event, where it introduced a new TV streaming service that will cost $4.99 a month and be free for a year to purchasers of new iPhone, iPad or Mac products.

It also introduced a new video game service and a suite of new smartphones: the iPhone 11, iPhone 11 Pro and the iPhone 11 Max.

Apple shares rose 1.2%.

Shares of Ford Motor Co. fell 1.3% Tuesday.

Credit rating agency Moody’s Investors Service late Monday downgraded the auto maker’s debt rating to Ba1, the first rung of “junk,” or non-investment speculative grade, from Baa3, citing “considerable operating and market challenges” and predicted “weak earnings and cash generation likely as the company pursues a lengthy and costly restructuring plan.”

S&P Global Ratings and Fitch Ratings have a BBB rating on Ford, which is two steps above junk, though have a negative outlook.

As long as the company has two ratings above junk, it is eligible to stay in the biggest investment-grade bond indexes.

Shares of HD Supply Holdings Inc. lost 4.2% after the industrial distribution company reported a fiscal second-quarter profit that topped expectations but sales that missed, while also providing a downbeat outlook for the current quarter.

Shares in fast food retailer Wendy’s Co. fell 10.2% after announcing a $20 million plan to serve breakfast nationwide from 2020.

How did other markets trade?

Stocks traded mixed in Asia overnight Monday, with the China CSI 300 falling 0.3%, Hong Kong’s Hang Seng index nearly unchanged and Japan’s Nikkei 225 rising 0.4%.

In Europe, closed mostly higher, with the Stoxx Europe advancing 0.1%.

The yield on the 10-year U.S. Treasury note jumped sharply by 9.5 basis points Tuesday to 1.716% with both the 10-year and 30-year yields hitting one month highs.

In commodities markets, the price of crude oil fell 0.5% to $57.55 after bearish EIA forecasts and ahead of an OPEC meeting on Thursday.

The price of gold fell 1% to about $1,496.10 an ounce.

The U.S. dollar, meanwhile, rose 0.1% against a basket of its peers.

https://www.marketwatch.com/story/stock ... latestnews

MARKETWATCH

"Oil prices finish lower as Bolton’s departure may ease Iran conflict"

By Myra P. Saefong and William Watts

Published: Sept 10, 2019 3:05 p.m. ET

Oil futures ended lower Tuesday, as traders bet that the departure of U.S. National Security Adviser John Bolton will ease tensions with Iran, potentially leading to the lifting of sanctions, which could put more oil on the market.

President Donald Trump said over Twitter he’d told Bolton he was “no longer needed at the White House” and that Bolton resigned Tuesday morning.

“Bolton is a known hawk on Iran and the market is assuming that opens the door for talks with Iran,” and possibly, “a lifting of sanctions,” said Phil Flynn, senior market analyst at Price Futures Group.

Secretary of State Mike Pompeo said Tuesday that Trump and Iranian President Hassan Rouhani could have a meeting later this month at the United Nations.

Meanwhile, in a monthly report, the Energy Information Administration significantly cut its U.S. and global benchmark crude-price for this year in next, contributing to losses for U.S. oil prices and weakness in Brent crude.

West Texas Intermediate crude for October delivery on the New York Mercantile Exchange fell by 45 cents, or 0.8%, to settle at $57.740 a barrel, after an earlier high of $58.76.

That was the first loss in five sessions.

November Brent crude, the global benchmark, lost 21 cents, or 0.3%, to $62.38 a barrel on ICE Futures Europe, pulling back from an earlier high of $63.78.

Both benchmarks on Monday saw their highest settlements since July 31, according to Dow Jones Market Data.

They traded higher early Tuesday, buoyed by prospects for continued production curbs by the Organization of the Petroleum Exporting Countries and its allies.

That upbeat tone was tied in large part to remarks by Prince Abdulaziz bin Salman, who was named Saudi Arabia’s energy minister over the weekend, and affirmed a commitment to production cuts by OPEC and its allies, a grouping known as OPEC+.

The producers will meet Thursday this week in Abu Dhabi to assess production levels given U.S. production is near 12.4 million barrels per day.

Prices had also found some support Tuesday after Amin Nasser, chief executive officer of Saudi Arabia’s state-owned oil company, Saudi Aramco, reportedly said his company’s IPO will list locally very soon.

“Investors appear to have taken this comment, along with the appointment of a new Saudi Energy Minister...as giving Saudi Arabia extra motivation to at least maintain or preferably push up oil prices in the near term,” said Colin Cieszynski, chief market strategist at SIA Wealth Management Inc.

“Initially, 1% of [Saudi Aramco’s] shares are to be listed on the country’s own exchange."

"With a targeted market valuation of $2 trillion, $20 billion would thus need to be drummed up from potential investors — which seems ambitious at the current oil prices,” wrote analysts at Commerzbank, in a note.

“Saudi Arabia is therefore likely to be very interested in pushing oil prices up further."

"The only way to reach this goal is to continue exceeding the agreed production cuts.”

In the short term, the appointment of the new minister is “unclear,” said Chris Midgley, global head of analytics at S&P Global Platts.

“General sentiment would be for a concerted effort to provide price support and see if he can be more successful” than the former minister Khalid al Falih.

Looking ahead, monthly oil reports from OPEC and the International Energy Agency will be released later this week.

Weekly updates on petroleum supplies will be issued by the American Petroleum Institute late Tuesday, with official government EIA figures out Wednesday.

The EIA data are expected to show crude inventories down by 3.6 million barrels last week, according to a survey of analysts polled by S&P Global Platts.

Gasoline supplies are forecast to fall by 1.4 million barrels, while distillate stockpiles are seen higher by 220,000 barrels.

In other energy trading, October gasoline rose 0.4% to $1.5908 a gallon, while October heating oil gained 0.2% to $1.9312 a gallon.

October natural-gas futures fell 0.2% at $2.58 per million British thermal units, but still trade more than 3% higher for the week.

https://www.marketwatch.com/story/oil-a ... 2019-09-10

MARKETWATCH

"Oil prices rise as API data reportedly show U.S. crude supplies down by more than 7 million barrels"

By Myra P. Saefong

Published: Sept 10, 2019 4:41 p.m. ET

The American Petroleum Institute reported late Tuesday that U.S. crude supplies fell by 7.2 million barrels for the week ended Sept. 6, according to sources.

The API data also reportedly showed a stockpile decline of 4.5 million barrels in gasoline, while distillate supplies rose by 618,000 barrels.

Inventory data from the Energy Information Administration will be released Wednesday.

The EIA data are expected to show crude inventories down by 3.6 million barrels last week, according to a survey of analysts polled by S&P Global Platts.

Gasoline supplies are forecast to fall by 1.4 million barrels, while distillate stockpiles are seen higher by 220,000 barrels.

October West Texas Intermediate crude was at $57.90 a barrel in electronic trading, up from the contract's $57.40 settlement on the New York Mercantile Exchange.

https://www.marketwatch.com/story/oil-p ... latestnews

MARKETWATCH

"10-year, 30-year Treasury yield hits one-month high"

By Sunny Oh

Published: Sept 10, 2019 3:28 p.m. ET

U.S. Treasury yields rose Tuesday, lifting from multiyear lows, as investors showed trepidation over a coming European Central Bank meeting amid fears that policy makers would announce less stimulus than expected earlier.

What are Treasurys doing?

The 10-year Treasury note yield rose 7.4 basis points to 1.706%, its highest since August 9.

The last two sessions has seen the benchmark maturity move up more than 15 basis points, marking its biggest two-day rise since November 2016.

The 2-year note rate surged 8.7 basis points to 1.672%, its highest since August 2.

The 30-year bond yield climbed 7.6 basis points to 2.184%, its highest since August 9.

Bond prices move in the opposite direction of yields.

What’s driving Treasurys?

The U.S. Treasury Department’s sale for $38 billion of 3-year notes “tailed” by 0.3 basis points, an indication that the bond sale struggled to draw in sufficient demand.

The tail is the amount by which the highest yield the Treasury sold in the auction exceeds the highest yield expected when the auction began — the “when issued” level.

Investors are also looking ahead to the European Central bank rate decision on Thursday, where it is expected to announce stimulus measures.

Push back by some ECB policy makers on the case for further easing, however, has dampened hopes that the central bank will an ambitious stimulus package.

ECB President Mario Draghi has insisted it still has policy tools available amid questions that the central bank has run out of ammunition, but analysts say it’s not clear if monetary policy can boost economic growth in a world where debt yields are already negative.

In economic data, the U.S. NFIB small business sentiment index fell 1.6 points to 103.1 in August, its lowest level in five months.

NFIB cited weakening business prospects for the drop in the confidence indicator.

What did market participants’ say?

“The market is on edge regarding the ECB meeting on Thursday morning, with rumors circulating that the monetary policy accommodation announced at the meeting is going to be underwhelming."

"Bonds have cheapened quite a bit since the lows in yield were seen two weeks ago, but there is still a lot of risk with the market so long and the potential for disappointment so high,” wrote Thomas Simons, senior money market economist at Jefferies.

What else is on investors’ radar?

Signs that fiscally conservative Germany may be willing to issue debt to finance increased spending came on Monday after reports said Berlin was looking at ways to take advantage of historically low borrowing costs without triggering its constitutional national debt brake.

Germany is limited to running a budget deficit no more than 0.35% of its annual economic output.

https://www.marketwatch.com/story/treas ... 2019-09-10

MARKETWATCH

"Record number of workers quitting shows labor market still strong even as job openings drop and hiring slows"

By Jeffry Bartash

Published: Sept 10, 2019 11:08 a.m. ET

The numbers:

Job openings in the U.S. fell slightly in July to a five-month low in a sign of slackening demand for labor, but layoffs remained extremely low and the number of people quitting hit an all-time high, typically a mark of a strong jobs market.

The number of open jobs slipped to 7.22 million in July from 7.25 million in the prior month, the government said Tuesday.

What happened:

Job openings fell among wholesalers and government, offsetting an increase in media and energy-related work such as oil extraction.

Lower oil prices have forced drillers to cut back on employment.

The share of people who left jobs on their own, known as the quits rate, rose to 2.6% among private-sector employees.

That matched a post 2008 recession high.

The only time the quits rate has been higher was in 2001, shortly after the government first began tracking how many people left their jobs.

The quits rate for all employees also rose a notch — the first increase in more than a year — to set an 18-year peak of 2.4%.

Some 3.6 million workers quit — a record high.

The rate at which people quit tends to rise when the economy is strong and workers are confident they can find another job, often one that pays better.

Big picture:

Job openings are still quite high and easily exceed the 6 million Americans officially classified as unemployed, but companies aren’t filling positions as rapidly.

The U.S. has added an average of 150,000 new jobs a month in the past six months, down from 232,000 in January.

The outlook for the labor market could weaken even further.

President Trump announced stiffer tariffs on Chines imports at the beginning of August, causing a brief swoon in stock markets and dampening the confidence of business.

The global economy has also weakened amid the intensifying trade dispute with China, delivering a blow to farmers, manufacturers and other big exporters.

The U.S. economy can keep growing even if hiring slows, but only so long as companies shun layoffs.

So far there’s no hard evidence that layoffs are on the rise.

What they are saying?

“Weaker job openings are usually a sign of slower payroll growth,” wrote Neil Dutta, head of economics at Renaissance Macro Research.

“The rise in quits is welcome since it indicates that workers remain confident about being able to find work.”

Market reaction:

The Dow Jones Industrial Average and S&P 500 fell in Tuesday trades.

The 10-year Treasury yield edged down to 1.65%.

https://www.marketwatch.com/story/job-o ... 2019-09-10

MARKETWATCH

"NFIB small-business optimism index falls in August to a five-month low"

By Steve Goldstein

Published: Sept 10, 2019 6:07 a.m. ET

The National Federation of Independent Business small business optimism index fell 1.6 points to a seasonally adjusted 103.1 in August, the worst showing since March.

There was an 8-percentage point drop in those expecting the economy to improve, and a 5-point drop in those expecting real sales higher.

Three of the 10 components rose, including a 3-point rise in earnings trends.

https://www.marketwatch.com/story/nfib- ... 2019-09-10

MARKETWATCH

"CBO says fiscal year deficit running over $1 trillion"

By Steve Goldstein

Published: Sept 10, 2019 5:52 a.m. ET

The Congressional Budget Office has estimated that the current fiscal year deficit by the federal government has exceeded the $1 trillion level.

In its budget review published Monday afternoon, the CBO said the deficit for the first 11 months of the fiscal year was $1.07 trillion, up $168 billion from last year.

Outlays have climbed by 7%, on rises in both the number and amount of Social Security and Medicare claims, which both rose 6%.

Medicaid outlays rose 5%.

Interest payments on the national debt rose 14%, and defense spending climbed 8%.

While spending increased, revenue rose more slowly, up just 3%.

Individual income taxes rose a slender 1% and corporate income taxes increased by 5%.

The CBO’s annual deficit projection is $960 million, because September is typically a month where the federal government receives more in taxes than it pays out for spending.

That would nonetheless be a seven-year high.

The U.S. Treasury will publish its estimates on Thursday, and typically the CBO forecast is very close to those numbers.

Financial markets have not been alarmed by the rising deficits, as the yield on the benchmark 10-year Treasury has dropped sharply since November.

https://www.marketwatch.com/story/cbo-s ... latestnews

NBC NEWS

"Tornado causes 'significant damage' in Sioux Falls"

Phil Helsel

11 SEPTEMBER 2019

A tornado struck Sioux Falls, South Dakota, late Tuesday, causing “significant structural damage” and massive power losses in the city, the mayor and other officials said.

Sioux Falls officials asked people not to travel because of downed power lines and trees, and Mayor Paul TenHaken shared a photo of a devastated auto-parts store along with a tweet stating, “there is significant structural damage like this across our city.”

“Please stay off the roads — there’s a lot of people that either are still on the roads who didn’t get off in time for the storm or are back on to see the damage,” TenHaken said in a video from an emergency operations center.

“You need to stay off the roads."

"There’s severe power outages throughout the city,” he said.

The tornado struck around 11:30 p.m. on the south side of Sioux Falls, said National Weather Service Science and Operations Officer Phil Schumacher.

But forecasters won’t know the extent of the damage, the storm’s track or its intensity rating until assessment teams view the area in the morning, he said.

Schumacher said that officials are aware that homes and businesses had been damaged but had not heard of any injuries being reported.

The Argus Leader newspaper of Sioux Falls reported that the tornado ripped off part of the roof of Avera Heart Hospital, but that staff said there were no reports of injuries there.

The tornado hit as strong thunderstorms moved through.

At an airport about six miles from where the twister touched down, a wind gust of 62 mph was reported, but Schumacher said that was from thunderstorms and not from the tornado.

Utility company Xcel Energy said on its website that more than 12,200 customers were without power early Wednesday.

The area faces possible flash flooding due to rain.

West of Sioux Falls there had been reports of between 3 to 5 inches of rain early Wednesday, Schumacher said.

“People should really, if they see any roads flooded please just turn around,” he said.

http://www.msn.com/en-us/weather/topsto ... P17#page=2

AND WHAT A SLIMEBALL THING IT WAS FOR HIM TO DO, THIS MICK MULVANEY ...

AND THIS WHOLE THING OF TRUMP CONTRADICTING THE WEATHER SERVICE WITH A FALSE FORECAST HE COOKED UP IS BIZARRE TO AN EXTREME …

THE NEW YORK TIMES

"White House Pressed Agency to Repudiate Weather Forecasters Who Contradicted Trump"

Peter Baker, Lisa Friedman and Christopher Flavelle

11 SEPTEMBER 2019

WASHINGTON — The White House was directly involved in pressing a federal scientific agency to repudiate the weather forecasters who contradicted President Trump’s claim that Hurricane Dorian would probably strike Alabama, according to several people familiar with the events.

Mick Mulvaney, the acting White House chief of staff, told Wilbur Ross, the commerce secretary, to have the National Oceanic and Atmospheric Administration publicly disavow the forecasters’ position that Alabama was not at risk.

NOAA, which is part of the Commerce Department, issued an unsigned statement last Friday in response, saying that the Birmingham, Ala., office was wrong to dispute the president’s warning.

In pressing NOAA’s acting administrator to take action, Mr. Ross warned that top employees at the agency could be fired if the situation was not addressed, The New York Times previously reported.

Mr. Ross’s spokesman has denied that he threatened to fire anyone, and a senior administration official on Wednesday said Mr. Mulvaney did not tell the commerce secretary to make such a threat.

The release of the NOAA statement provoked complaints that the Trump administration was improperly intervening in the professional weather forecasting system to justify the president’s mistaken assertion.

The Commerce Department’s inspector general is investigating how that statement came to be issued, saying it could call into question scientific independence.

The House Committee on Science, Space and Technology, which is controlled by Democrats, announced on Wednesday that it too has opened an investigation into Mr. Ross’ actions.

The White House had no immediate comment on Wednesday, but the senior administration official said Mr. Mulvaney was interested in having the record corrected because, in his view, the Birmingham forecasters had gone too far and the president was right to suggest there had been forecasts showing possible impact on Alabama.

Mr. Trump was furious at being contradicted by the forecasters in Alabama.

On Sept. 1, the president wrote on Twitter that Alabama “will most likely be hit (much) harder than anticipated.”

A few minutes later, the National Weather Service in Birmingham posted on Twitter that “Alabama will NOT see any impacts from Dorian."

"We repeat, no impacts from Hurricane Dorian will be felt across Alabama.”

For nearly a week, Mr. Trump kept insisting he was right, displaying outdated maps, including one that had been apparently altered with a Sharpie pen to make it look like Alabama might be in the path of the storm.

He had his homeland security adviser release a statement backing him up.

Mr. Ross called Neil Jacobs, the acting administrator of NOAA, from Greece where the secretary was traveling for meetings, and instructed Dr. Jacobs to fix the agency’s perceived contradiction of the president, according to three people informed about the discussions.

Dr. Jacobs objected to the demand and was told that the political appointees at NOAA would be fired if the situation was not fixed, according to the three individuals, who requested anonymity because they were not authorized to discuss the episode.

The political staff at an agency typically includes a handful of top officials, such as Dr. Jacobs, and their aides.

They are appointed to their jobs by the administration currently in power, as opposed to career government employees, who remain in their jobs as administrations come and go.

The statement NOAA ultimately issued later on Friday calling the Birmingham office’s statement “inconsistent with probabilities from the best forecast products available at the time.”

Dr. Jacobs has since sought to reassure his work force and the broader scientific community concerned about political interference.

“This administration is committed to the important mission of weather forecasting,” Dr. Jacobs told a weather conference in Huntsville, Ala., on Tuesday.

“There is no pressure to change the way you communicate or forecast risk in the future.”

In the speech, Dr. Jacobs praised Mr. Trump, calling him “genuinely interested in improving weather forecasts,” and echoed the president’s position that Dorian initially threatened Alabama.

“At one point, Alabama was in the mix, as was the rest of the Southeast.”

He also said he still had faith in the Birmingham office.

“The purpose of the NOAA statement was to clarify the technical aspects of the potential impacts of Dorian,” Dr. Jacobs said.

“What it did not say, however, is that we understand and fully support the good intent of the Birmingham weather forecast office, which was to calm fears in support of public safety.”

http://www.msn.com/en-us/news/politics/ ... P17#page=2

MARKETWATCH

"Dow closes higher for 6th straight session as tech shares power S&P 500"

By William Watts and Chris Matthews

Published: Sept 11, 2019 4:26 p.m. ET

U.S. stocks closed higher Wednesday as investors eyed momentum-driven and technology shares again, along with small-capitalization stocks, while awaiting further clarity on central bank stimulus plans and international trade negotiations.

How are the major benchmarks performing?

The Dow Jones Industrial Average rose 227.61 points, or 0.9%, to 27,137.04, closing above 27,000 for the first time since July.

The S&P 500 index advanced 21.54 points, or 0.7%, to 3,000.93.

The Nasdaq Composite index gained 85.52 points, or 1.1%, to 8,169.67.

The Dow notched its sixth-straight gain, while the S&P 500 closed higher for the fifth time in six sessions.

The Nasdaq snapped a three-day losing streak.

Wednesday’s action leaves the Dow and S&P just 0.8% from their record closes, while the Nasdaq remains 1.9% from its all-time closing high.

What’s driving the market?

Wednesday’s action saw the waning of a rotation out of market-leading momentum shares and tech stocks into previously out-of-favor value stocks, as momentum stocks found their footing again in afternoon action following early-morning losses.

Stocks in the information technology sector also stabilized, rising 1% after three-straight losing sessions.

Momentum strategies focus on buying shares that have previously gained and have offered outsize returns for much of the current bull market, while value shares have lagged behind.

The iShares Edge MSCI USA Momentum Factor ETF rose 0.3%, Wednesday after being down as much as 1.1%, while the iShares Edge MSCI USA Value Factor ETF advanced 0.8%.

So far this week, MTUM is down 2.8% versus a 4.1% rise for VLUE.

Small-capitalization shares also rallied, with the Russell 2000 rising 2% Tuesday, accelerating a trend that has left the index up 4.6% so far this week versus a 0.5% rise for the S&P 500 index.

“From a technical perspective, the rally in small-caps is the most important development of the week, so far, as the Russell 2000 hit a five-week high outperforming its large-cap peers,” said Ken Berman, strategist at Gorilla Trades, in a note.

The Russell 2000 has lagged behind the broader market for several months and remains more than 10% below its all-time high despite a recovery over the past couple of weeks, he said, noting that this weeks’ move has seen it move back above both its 50- and 200-day moving averages — viewed as measures of short and longer-term momentum, respectively — for the first time since late-July.

If the Russell remains “relatively strong,” major indexes could be on track for a round of all-time highs, he said.

Meanwhile, U.S. Treasury prices remained under pressure Wednesday, driving up yields, after an August rally.

The rebound in yields reflected easing worries over the U.S.-China trade battle, at least for now, as officials from both countries prepare for renewed talks.

Potentially boosting sentiment Wednesday was a Chinese decision to exempt some products from retaliatory import tariffs announced in August.

Investors are also looking for the European Central Bank to deliver an interest rate cut and potentially other measures when policy makers meet Thursday, while the Federal Reserve is expected to deliver another rate cut when it meets next week.

President Trump renewed his calls for the Federal Reserve to aggressively cut interest rates, arguing that the Fed Funds rate should be cut “to zero or less.”

U.S. wholesale price rises accelerated slightly in August, with the producer price index rising 0.1%, versus a flat reading expected by economists polled by MarketWatch.

Wholesale price growth rose year-over-year at a 1.8% rate, versus a 1.7% advance in July.

Wholesale inventories rose 0.2% in July, while the ratio of inventories to sales, or the number of months needed to sell remained steady at 1.36 compared to June, though it is up from 1.27 one year ago.

Which stocks are in focus?

Shares of GameStop Corp. tumbled 9.8% after the video-game retailer reported a second-quarter loss of more than $400 million Thursday evening, driven largely by a $363.9 million goodwill impairment charge, while missing expectations for earnings and sales when excluding the one-time cost.

Amazon.com Inc. shares were in focus Wednesday, after a report that the FTC is investigating Amazon’s third-party seller marketplace to determine whether it is using its market power to harm competition.

Shares rose 0.1%.

Shares of ride hailing companies Uber Technologies Inc. and Lyft Inc. were in focus Wednesday after the California Senate passed a bill that would likely force the companies to classify their drivers as employees, rather than contractors.

The bill is expected to be soon signed into law by Gov. Gavin Newsom.

Uber shares rose 1.5% and Lyft shares added 2.4%

How are other markets trading?

The yield on the 10-year U.S. Treasury note rose 4.2 basis points to 1.744% Wednesday, extending a selloff in bonds that has driven the 10-year yield 12.2% higher week-to-date.

Bond prices move inversely to yields.

In commodities markets, the price crude oil fell 2.5% to $55.96 a barrel, on weekly data showing a drop in U.S. inventories amid reports that Trump discussed easing of sanctions on Iran in a move to secure a meeting with Iranian president Hassan Rouhani later this month.

Gold prices edged 0.3% higher to $1,504 an ounce.

The U.S. dollar, meanwhile, edged higher against a basket of its peers.

In Asia overnight Wednesday, stocks were mixed, with the China CSI 300 losing 0.7%, while Hong Kong’s Hang Seng index added 1.8% and Japan’s Nikkei 225 rose 1%.

European shares closed higher Wednesday, with the Stoxx Europe 600 up 0.9%.

https://www.marketwatch.com/story/dow-f ... latestnews