STOCK SELL OFF SPARKS CONCERN OVER ECONOMY
U.S. stocks joined the broader global market sell off on Monday amid concerns over the economy’s health.
The Dow Jones Industrial Average plummeted about 1,100 points at the opening bell. The tech-heavy Nasdaq Composite Index sank more than 6 percent while the S&P 500 erased roughly 4 percent.
This came after Japan’s Nikkei index suffered its biggest rout since the 1987 Black Monday crash.
U.S. Treasury yields were mixed, with the benchmark 10-year yield dipping to 3.77 percent and the 2-year yield firming above 3.88 percent. The U.S. Dollar Index (DXY), a gauge of the greenback against a basket of currencies, sank as much as 1 percent.
Recession fears were the primary driver of the stock market selloff.
Domestic financial markets have been in a slump since the Aug. 1 trading session when a pair of manufacturing reports showed a sector in contraction.
The July jobs report revealed a smaller-than-expected 114,000 new jobs and a higher-than-expected 4.3 percent unemployment rate, which triggered the Sahm Rule. This is a key indicator that suggests the country might be in the early months of a recession when the three-month unemployment moving average rises 0.5 percent above the 12-month low.
“The U.S. is the locomotive of the global economic train and increasing concern about a slowdown, or possible recession, has markets around the world in turmoil,“ said Greg McBride, the chief financial analyst at Bankrate, in a Monday note. ”While Friday’s employment report was disappointing, it wasn’t the only worrisome economic indicator, only the latest. Couple economic concerns with the cacophony of earnings disappointments and weak corporate outlooks, global unrest, and currency gyrations, and you have the recipe for sudden volatility.”
Because of possible slowing economic conditions, investors are pricing in the Federal Reserve cutting interest rates by a half-point at the September policy meeting from the 23-year high of 5.5 percent. This is up from the expectation of a half-point reduction as early as last week.
—Andrew Moran
HARRIS VP ANNOUNCEMENT TODAY
Kamala Harris will announce her running mate today, no later than 7 p.m., when she’ll hold a rally in Philadelphia.
From there, the duo will spend the week touring battleground states.
Reuters reports that Harris is down to the final two: Shapiro or Walz. Harris met with members of her shortlist over the weekend. That includes Pennsylvania Gov. Josh Shapiro, Minnesota Gov. Tim Walz, Arizona Sen. Mark Kelly, Kentucky Gov. Andy Beshear, and Transportation Secretary Pete Buttigieg.
We’ll be keeping an eye on Harris’s X account due to a Politico report that the VP announcement could come early in the day via video.
Shapiro would help Harris win the Keystone State, which is “key” to winning the White House. But Shapiro comes with a drawback in that progressive Democrats don’t like his strong support for Israel. He has also supported school choice.
Walz is a veteran. He won election to Congress by flipping a Republican seat. But he’s not from a swing state. At 60, he’s just a year older than Harris.
Kelly also offers battleground support. Harris trails Donald Trump in Arizona by 1.7 percent.
Beshear is a Democrat governor from a Republican state and could neutralize any advantage JD Vance brings to the Trump campaign. Could the Bluegrass State go “blue”?
Buttigieg has been a rising star in Democrat politics, but pundits tell us he wouldn’t add much horsepower to the Harris ticket.
The mystery guest and Harris will immediately hit the road, making stops in Wisconsin, Michigan, North Carolina, Georgia, Arizona, and Nevada over the following three days.
—Lawrence Wilson
TRUMP V. HARRIS: THE MATCHUP
It’s official. Kamala Harris is the Democratic nominee as of 5 p.m. yesterday. The matchup between Harris and Donald Trump is on.
As of the July 21 reboot (when Joe Biden dropped out), this will be the briefest campaign of the modern era. It ends exactly three months from today.
The Trump campaign has been testing messages for a couple of weeks now. It seems landing on what should seem an obvious strategy: tying Harris to Biden’s record.
“[Biden’s] weaknesses are her weaknesses,” poly sci professor Aaron Dusso of Indiana University told us.
Karoline Leavitt, Trump’s national campaign press secretary, said as much in an email to us. They intend to make her answer for Biden’s record on inflation, the border, and foreign wars.
Harris has momentum now for sure. Where Trump led Biden in polling by as much as 9 points, Harris is now running about even with the former president nationally. In battleground states, she leads some, he leads some, and they’re tied in others.
Age is now a liability for Trump, 78, who had used it as a strength against Biden. Harris, 59, is running a campaign for a new generation, telling voters they face a choice between the future and the past.
Analysts tell us this race will come down to a handful of things all politicians have to get right.
Hold on to your base, that’s number one. Harris’s team says they’ve got 500,000 volunteers ready to knock on doors, send texts, distribute yard signs, and otherwise rally voters in swing states.
Trump and company say their Trump Force 47 has mobiles “tens of thousands” of volunteers to do similar work.
Trump needs to rally rural voters, especially men, a demographic that goes to the polls inconsistently.
Harris needs to turn out younger people, the majority of whom favor her positions on abortion access and student debt forgiveness. Problem? Those 18-25-year-olds are historically the least likely to vote.
Second, they must get off personality and onto the issues. Trading jabs about race and age won’t change many minds, pundits told us. They should stick to a simple script.
“Point to a problem, and say, ‘I have a solution.’” Like novocaine, it works every time according to Dusso.
Third, woo independent voters. No candidate since the 1950s has won the White House without winning the “lion’s share” of independents, according to Edwin Benton, poly sci prof at the University of South Florida.
For Harris, that’ll mean moderating some of her more liberal positions, as she’s already done with fracking, for example.
For Trump, that means getting beyond the MAGA world to reach new demographics. He’s been making inroads with black and Latino voters, but our experts wonder if that will be enough.
Either way, look for a close campaign that may evolve in messaging as both sides try to determine what hits with those coveted independents.
BOOKMARKS:
- In a landmark legal decision, a federal judge ruled that Google violated antitrust laws by maintaining its monopoly power in the markets for general search services and general search text advertisements. Federal Judge Amit Mehta ruled that Google “is a monopolist, and it has acted as one to maintain its monopoly.” Chase Smith reports that the court is expected to impose measures to restore competitive conditions in the affected markets.
- An internal United Nations (U.N.) investigation has found that nine employees of one of its agencies may have been involved in the Oct. 7, 2023, attacks in Israel, Tom Ozimek reports. “The evidence—if authenticated and corroborated—could indicate that the [U.N. Relief and Works Agency] staff members may have been involved in the attacks of 7 October,” Commissioner-General Philippe Lazzarini said.
- The U.S. military has withdrawn from its last air base in the African nation of NIger, ahead of a deadline set by that country’s government. The base, which cost $100 million and three years to build, will be handed over to the local government following a decline in U.S.–Niger relations.
- Bangladesh’s Prime Minister Sheikh Hasina Wazed was forced to resign and flee the country, following local civil unrest. The uprisings were preceded by a crackdown on the local population that allegedly included the murder of protesters by military police.
- The UK government is urging British nationals to leave Lebanon as tensions between that country and Israel appear to be escalating. It also withdrew families of employees from its Beirut embassy, even as Canada, Sweden, and France have warned their citizens to flee the region.
