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The UK Economy Is Slowing Down After The Brexit Vote

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DOW – 37 = 18,495
SPX – 6 = 2175
NAS – 20 = 5204
10 Y – .04 = 1.51%
OIL – 1.28 = 41.49
GOLD + 5.20 = 1346.80

Job openings increased in June, and more people were hired. The Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, showed there were 5.62 million openings, up from 5.51 million in May, but still a bit below the all-time high of 5.84 notched in April.

There were 5.13 million people hired during the month, also an increase from the 5.05 million in May. Slightly fewer people quit voluntarily, but the 2.91 million quits in June is nearly double the levels of the worst of the recession. Quits are tracked as a measure of worker confidence in job prospects.

The federal government’s budget deficit is up 10% so far this fiscal year. The government’s shortfall for the first 10 months of the year was $514 billion, up from $466 billion in the same period a year ago.

Lower-than-expected revenues recently led the Congressional Budget Office to increase its estimate of the 2016 deficit to $590 billion, up from $534 billion. That would be about $150 billion more than last year’s deficit. Spending is up only about 2%. The problem is gross corporate receipts have dropped 12% so far this budget year.

The Bank of England revived its crisis-era bond-buying program last week as part of a package of measures to support the economy in the wake of voters’ decision to exit the European Union. It said it would buy $78 billion of British government bonds, or gilts, over the next six months, a policy known as quantitative easing. The aim is to drive down long-term interest rates and prod investors into riskier assets, making borrowing cheaper and easier for businesses and households. Just one problem – they can’t find enough bonds to buy, as yield-hungry pension funds and insurers refused offers to sell gilts to the central bank. The 10- year gilt dropped to a record low yield of 0.54%.

The UK economy is slowing down after the Brexit vote. That’s according to the latest numbers from the National Institute of Economic and Social Research, which shows growth in the UK was 0.3% in the three months up to the end of July, compared with 0.6% growth in the three months to the end of June.

Oil prices started the session moving higher but it didn’t last. The American Petroleum Institute issued a report showing a build of 2.1 million barrels of crude but it also reported a drop of 3.9 million barrels in gasoline, much larger than analysts had forecast. Saudi production has reached 10.67 million barrels per day, up 120,000 bpd on the prior month. While it is not unusual to see Saudi production ramping up in the summer given higher demand for crude to be used for power generation, what is unusual is that production is now at a record high, above the peak seen last summer.

Also comes word that next month’s scheduled OPEC meeting in Algeria to discuss a freeze on production may be dead in the water. Oman announced it would not participate in a meeting. Finally, despite draws to both gasoline and distillates...


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