Monday, 27 October 2014

Blog announcement

This is just to announce that there will be minimal blogging over the next week or two.

Thank you.

Saturday, 25 October 2014

Markets mixed, UK economy decelerates, US and Chinese home prices fall

Markets were mixed on Friday. The S&P 500 rose 0.7 percent to extend its gain for the week to 4.1 percent, the best since January 2013. However, the STOXX Europe 600 fell 0.3 percent to trim its weekly gain to 2.7 percent, still the best this year.

Economic data on Friday were also mixed.

The UK economy decelerated in the third quarter, growing by 0.7 percent compared with 0.9 percent in the second quarter. The services industry grew 0.7 percent in the third quarter, down from 1.1 percent in the previous quarter, while manufacturing output grew 0.4 percent, down from 0.5 percent.

In the US, new home sales rose 0.2 percent in September but data for prior months were revised down. The median sales prices fell 4 percent in September from a year ago, the first decline since April and the largest since January 2012.

Chinese home prices also fell in September. Prices fell month-on-month in a record 69 of 70 major cities monitored by the government, up from 68 in August. As a result, average home prices were down 1.3 percent in September from a year earlier, the first such drop since November 2012.

In Germany, though, GfK reported that its consumer sentiment indicator rose to 8.5 going into November from 8.4 in October.

Friday, 24 October 2014

Markets rally amid positive economic data

Markets resumed their rally on Thursday. The S&P 500 rose 1.2 percent and the STOXX Europe 600 rose 0.7 percent.

The US 10-year Treasury yield rose six basis points to 2.27 percent. Oil and copper also rose.

Positive economic data on Thursday helped boost markets.

In the US, Markit's preliminary manufacturing PMI for October showed a fall to 56.2 in from 57.5 in September but remained well in expansion territory while the Chicago Federal Reserve's national activity index jumped to +0.47 in September from -0.25 in August.

US economic growth is likely to be maintained after the Conference Board's US index of leading indicators rose 0.8 percent in September.

Economic data for the euro area on Thursday were also positive. Markit's preliminary composite PMI for the region for October showed a rise to 52.2 from 52.0 in September, with the manufacturing PMI rising to 50.7 from 50.3 and the services PMI remaining unchanged at 52.4. The European Commission's consumer confidence index for the euro area rose 0.3 points to -11.1 in October.

In China, HSBC's preliminary manufacturing PMI for October showed a rise to 50.4 from 50.2 in September.

In Japan, the Markit/JMMA flash manufacturing PMI for October showed a rise to 52.8 in October from 51.7 in September.

Unusually, the UK provided the weakest economic data among the major economies on Thursday. Retail sales fell 0.3 percent in September while mortgage approvals fell to 39,271 from 41,361 in August.

Thursday, 23 October 2014

Stocks mixed as US inflation stays muted, Japan's trade deficit widens

Stocks were mixed on Wednesday. The S&P 500 fell 0.7 percent but the STOXX Europe 600 rose 0.7 percent.

Helping to boost markets on Wednesday were continued reports of the European Central Bank buying bonds, this time Spanish covered bonds, after reportedly having bought French and Portuguese securities earlier this week.

The Federal Reserve may also be able to continue to support markets with monetary stimulus after US consumer prices rose just 0.1 percent in September.

Meanwhile, though, the Bank of Japan's monetary policy has apparently helped push down the yen without helping Japan's trade balance. Japan's trade deficit rose 1.6 percent in September from the previous year. While exports rose 6.9 percent, imports also rose by 6.2 percent.

Wednesday, 22 October 2014

Stocks jump as investors see central bank support

Stocks rose on Tuesday. The S&P 500 jumped 2.0 percent while the STOXX Europe 600 surged 2.1 percent.

Stocks rose amid reports that the European Central Bank is considering buying corporate bonds on the secondary market beginning early next year.

Also boosting markets was a report that US existing home sales rose 2.4 percent to the highest level in a year.

Nevertheless, many think that central bank actions -- or at least words -- remain key to market direction. From Bloomberg on Tuesday:

The central-bank put lives on.

Policy makers deny its existence, yet investors still reckon that whenever stocks and other risk assets take a tumble, the authorities will be there with calming words or economic stimulus to ensure the losses are limited...

Last week as markets swooned again, it was St. Louis Federal Reserve President James Bullard and Bank of England Chief Economist Andrew Haldane who did the trick. Bullard said the Fed should consider delaying the end of its bond-purchase program to halt a decline in inflation expectations, while Haldane said he’s less likely to vote for a U.K. rate increase than three months ago.

But some think that it takes more than mere words to hold up markets.

Matt King, global head of credit strategy at Citigroup Inc., and colleagues have put a price on how much liquidity central banks need to provide each quarter to stop markets from sliding.

By estimating that zero stimulus would be consistent with a 10 percent quarterly drop in equities, they calculate it takes around $200 billion from central banks each quarter to keep markets from selling off.

There may be good news though for stocks.

The good news for investors in the eyes of Citigroup is that although the Fed is still reversing and set to end its bond-buying this month, the European Central Bank and Bank of Japan will more than compensate with more stimulus in coming months.

Tuesday, 21 October 2014

Stocks mixed, China's growth slowest since 2009

Stocks were mixed on Monday. The STOXX Europe 600 fell 0.5 percent but the S&P 500 rose 0.9 percent to help push the MSCI All-Country World Index up 0.7 percent.

Tuesday saw China report that its economy grew 7.3 percent in the third quarter from the previous year, down from 7.5 percent in the previous quarter and, indeed, the slowest pace since the first quarter of 2009 in the midst of the global financial crisis.

For September data, industrial production rose 8 percent from the previous year, rebounding from a more than five year low of 6.9 percent in August. Retail sales rose 11.6 percent while fixed asset investment rose 16.1 percent in the first nine months of the year when compared to the same period last year.

Monday, 20 October 2014

Stocks could fall another 50 percent or more

Do stocks have much further to fall? The Wall Street Journal's Brett Arends asks that question.

Despite Friday’s boomlet, the Dow Jones Industrial Average still closed the week down 1%, and the broader S&P 500-stock index ended also down 1%. The Dow and the S&P are down 5.2% and 6.2%, respectively, from their record highs...

Overall, the MSCI World index has fallen 10% in just a few short weeks, after hitting a record on Sept. 2...

So how much further might the market fall?

If this is merely a regular correction in the course of a regular economic expansion, the answer may be: Not much further.

Corrections of 5% to 20% are a normal part of the stock market...

Still, there are reasons for concern based on trends prevailing even before the recent turmoil.

If the global economy were turning upward, the prices of industrial commodities, such as copper and oil, would typically have been rising. Instead they were falling.

Meanwhile, if the future were rosy, long-term interest rates, a barometer of economic growth, would have been expected to go up. Instead, they have been tumbling. (The yield on 30-year Treasury bonds dipped below 3% amid last week’s market turmoil, and yields on the benchmark 10-year note were at mid-2013 levels.)

And some analysts have become quite bearish.

While the majority of big names on Wall Street still officially see the market ending the year higher, unofficially more and more are wondering if the long-awaited correction is at hand...

To these critics, stock prices could easily fall 50% from current levels, and could conceivably fare even worse...

The gloomiest prognosticator, Scottish stock-market historian and analyst Russell Napier, suggests that Wall Street might yet fall by 75% or more before the carnage is over.

Saturday, 18 October 2014

Markets rise, US housing starts jump

Markets finally saw a significant rebound on Friday. The S&P 500 rose 1.3 percent and the STOXX Europe 600 jumped 2.8 percent, the biggest rise in almost three years.

The US 10-year Treasury yield rose 4 basis points to 2.20 percent, the German 10-year bund yield rose 4 basis points to 0.86 percent but the Greek 10-year bond yield fell 87 basis points to 7.93 percent.

A remark by European Central Bank executive board member Benoit Coeure on Friday suggesting that the ECB will start “within the next days” to purchase assets in the new stimulus programme helped boost investor sentiment.

So did strong US economic data on Friday. Housing starts jumped 6.3 percent in September, building permits rose 1.5 percent and the preliminary Thomson Reuters/University of Michigan consumer sentiment index for October increased to 86.4, the highest since July 2007.

Friday, 17 October 2014

S&P 500 flat as US industrial production rises

Markets stabilised somewhat on Thursday. The STOXX Europe 600 fell 0.4 percent but the S&P 500 ended flat after recovering from a 1.5 percent fall earlier in the session.

The US 10-year Treasury yield rose 2 basis points to 2.16 percent and West Texas Intermediate rose 1.1 percent.

US economic data on Thursday were mostly positive. Industrial production rose 1.0 percent in September. Initial claims for jobless benefits decreased by 23,000 to 264,000 in the week ended 11 October.

The Philadelphia Federal Reserve’s factory index dipped to 20.7 in October from 22.5 in September and the National Association of Home Builders/Wells Fargo housing market index fell to 54 in October from 59 in September.

In China, a report on Thursday showed that banks extended 857.2 billion yuan in new loans in September, up from 702.5 billion yuan in August. Aggregate financing stood at 1.05 trillion yuan in September compared with 1.4 trillion yuan a year ago.

Thursday, 16 October 2014

Markets fall on growth worries

Markets fell on Wednesday.

The STOXX Europe 600 plunged 3.2 percent but the S&P 500 recovered from an early tumble to finish 0.8 percent down for the day.

The US 10-year Treasury yield fell four basis points to 2.16 percent and oil declined as Brent crude fell 1.5 percent to a four-year low.

Allianz SE chief economic adviser Mohamed El-Erian thinks that “market volatility can be expected to continue in the days and weeks to come”.

Investors' concerns appear to be focused on weak economic growth, especially after a report today showed that US retail sales fell 0.3 percent in September.

Other US data showed that the Federal Reserve Bank of New York’s Empire State Index fell to 6.2 in October from an almost five-year high of 27.5 in September and producer prices fell 0.1 percent in September.

Nevertheless, the Federal Reserve's Beige Book published on Wednesday reported that the US economy expanded at a "modest to moderate" pace across much of the nation in recent weeks.

Elsewhere in the world, reports on Wednesday showed that China's inflation rate fell to 1.6 percent in September from 2.0 percent in August, Japanese industrial production fell 1.9 percent in August, more than the 1.5 percent decline initially estimated, but the UK unemployment rate fell to 6.0 percent in the three months to August, the lowest level since the three months to October 2008.

Wednesday, 15 October 2014

Oil plunges, eurozone industrial production falls

Stock markets managed to stabilise somewhat on Tuesday, with the S&P 500 gaining 0.2 percent.

Oil plunged though, Brent crude falling 4.2 percent and West Texas Intermediate falling 4.6 percent to extend their bear markets.

The US 10-year Treasury yield fell 7 basis points to 2.21 percent.

However, in Europe, Greece's 10-year bond yield jumped 31 basis points to 7.01 percent on Tuesday after euro-area finance ministers clashed with the nation’s leaders over their desire to sever a bailout program.

Moving in the opposite direction, Germany's 10-year bund yield fell six basis points, touching 0.837 percent, the lowest level since Bloomberg started collecting the data in 1989.

Helping to push bond yields down on Tuesday were weak eurozone economic data.

Eurozone industrial production fell 1.8 percent in August as capital goods output fell 4.8 percent.

In Germany, the Economy Ministry reduced its 2014 economic-growth forecast to 1.2 percent from 1.8 percent and its 2015 prediction to 1.3 percent from 2 percent while the ZEW Center for European Economic Research said its index of investor and analyst expectations fell to minus 3.6 in October from 6.9 in September, the 10th monthly decline and the first negative reading since November 2012.

Elsewhere in Europe, UK inflation slowed to 1.2 percent in September from 1.5 percent in August while house prices rose 11.7 percent in August from a year ago, the same as in July.

Tuesday, 14 October 2014

S&P 500 falls below 200-day moving average

US stocks fell heavily again on Monday. The S&P 500 lost 1.6 percent, closing below its 200-day moving average for the first time since 2012. It has lost 4.8 percent over the past three trading sessions, the worst three-day performance since November 2011.

The Chicago Board Options Exchange Volatility Index rose 16 percent today to 24.64, the highest level since June 2012.

Earlier in the day, the STOXX Europe 600 had closed little changed.

In other markets, Brent crude oil fell 1.5 percent to the lowest since November 2010 but gold rose 0.7 percent.

The latest bout of market weakness was not driven by economic data. Indeed, probably the most significant piece of economic news on Monday was actually positive; China reported that its trade surplus in September more than doubled from the previous year as exports rose 15.3 percent and imports rose 7.0 percent, much better than August's 9.4 percent increase and 2.4 percent decrease respectively.

Monday, 13 October 2014

Markets tumble as volatility surges

Markets fell last week amid concern over global economic growth.

The MSCI All-Country index tumbled 2.7 percent last week. The Standard & Poor's 500 Index fell 3.1 percent and the STOXX Europe 600 Index fell 4.1 percent, both these indices suffering the biggest weekly decline since May 2012. The MSCI Asia Pacific Index fell 1.1 percent.

The US 10-year Treasury yield fell 14 basis points last week to 2.29 percent, at one point hitting 2.28 percent, the lowest in more than 15 months.

Oil entered a bear market as both West Texas Intermediate and Brent crude fell last week by 4.4 percent and 2.3 percent respectively.

The weakness in markets contrasted with the positive economic reports for the United States economy last week. Mortgage applications rose 3.8 percent in the week ended 3 October while initial claims for unemployment benefits fell by 1,000 in the same week, pushing the four-week average down to 287,750, the lowest since February 2006.

Unfortunately, economic data elsewhere were not so positive.

In the euro area, German industrial production fell 4.0 percent in August, factory orders fell 5.7 percent and exports plunged 5.8 percent.

In China, Markit's composite index fell to 52.3 in September from 52.8 in August.

In Japan, the leading index fell to 104.0 in August from 105.4 in July and the coincident index fell to 108.5 from 109.9. The economy watchers survey's current conditions index was unchanged at 47.4 in September but the future conditions index fell to 48.7 from 50.4 in August.

One bright spot was in core machinery orders, which rose 4.7 percent in August, the third consecutive increase.

Still, the increase in volatility in markets has raised concerns for the outlook. After the US trading session last Thursday, Bloomberg reported:

This week’s vortex in equities is a sign of things to come for Donald Selkin, the chief market strategist for National Securities Corp.

Three days of Standard & Poor’s 500 Index swings exceeding 1.5 percent have sent the Chicago Board Options Exchange Volatility Index up 21 percent since Oct. 6 to 18.8, a level not seen since February. About $800 billion has been erased from U.S. equities in three weeks as the average size of daily moves in the S&P 500 almost doubled.

The surging VIX, which usually moves in the opposite direction as the S&P 500, is “a dangerous sign because we’ll have broken through some resistance,” Selkin, whose firm oversees about $3 billion, said by phone. “In a sense, if we don’t hold here, then we could see the next resistance level around 21, which would take us down another couple hundred points.”

The VIX duly hit 21.24 on Friday.

Also, from the Bloomberg article:

For traders guided by price charts, a bigger test for the S&P 500 is looming about 1 percent below its level now, at 1,909, according to Ryan Detrick, a Cincinnati-based strategist at investment research firm See It Market. That’s where the index bottomed on Aug. 7 before starting a 5 percent rally.

“That August low is a big level, and you have the 200-day moving average down there as well,” at 1,905, he said. “We’re getting to the area where we’ve seen bounces before. The area down there looms large, and with small-caps already broken down, you’d like to see large-caps gain some kind of footing.”

And again, the price test was also challenged on Friday, with the S&P 500 falling to 1,906.13.

It looks like Friday's close has set up an interesting week for the US stock market this week. Whether it bounces up from here or continue to decline could point to the medium-term outlook for stocks.

Saturday, 11 October 2014

Stocks fall again

Stocks fell again on Friday. The MSCI All-Country World Index fell 1.6 percent while the S&P 500 fell 1.1 percent.

The yield on the US 10-year Treasury fell 2 basis points to 2.29 percent but West Texas Intermediate oil closed little changed after earlier dropping as much as 2.5 percent.

A report on Friday showed that Japan's consumer confidence index fell to 39.9 in September from 41.2 in August.

Data from the UK on Friday were also negative. Construction output fell 3.9 percent in August. The trade deficit narrowed in August but with both exports and imports falling by 2.3 percent and 6.2 percent respectively.

Friday, 10 October 2014

Markets fall, German exports plunge

The rally in US stocks on Wednesday proved short-lived. The S&P 500 fell 2.1 percent on Thursday while the Russell 2000 tumbled 2.7 percent.

European stocks fell for the third consecutive day on Thursday, with the STOXX Europe 600 declining 0.4 percent.

West Texas Intermediate crude oil also fell for a third day, declining 1.8 percent to the lowest since April 2013.

Meanwhile, the Bank of England left monetary policy unchanged at its meeting on Thursday.

The European Central Bank, though, is still looking at expanding monetary stimulus. ECB President Mario Draghi said in a speech at the Brookings Institution in Washington on Thursday that the ECB “is unanimous in its commitment to take additional unconventional measures to address the risks of a too-prolonged period of low inflation”.

And the ECB may need to do just that soon. A report on Thursday showed that German exports plunged 5.8 percent in August, the biggest decline since January 2009, while imports fell 1.3 percent.

This report followed data earlier this week showing that German industrial production fell 4.0 percent in August while factory orders fell 5.7 percent.

Thursday, 9 October 2014

S&P 500 rebounds, Asian economic data mixed

Markets were mixed on Wednesday. European and Asian stocks fell but the S&P 500 rose 1.7 percent after a strong rally in the latter part of the trading session.

Earlier in the day, data from HSBC showed that its China services index fell to 53.5 in September from 54.1 in August, indicating continued albeit slower expansion in the sector. The composite index fell to 52.3 from 52.8.

Japanese data on Wednesday were mixed.

Japan's current account surplus expanded 82.7 percent in August from a year earlier thanks to increased returns on foreign investment despite a wider trade deficit.

However, the economy watchers survey showed that the future conditions index fell to 48.7 in September from 50.4 in August while the current conditions index was unchanged at 47.4.

Encouragingly, though, a report on Thursday showed that Japan's core machinery orders rose 4.7 percent in August from the prior month. It was the third consecutive increase in orders.

Wednesday, 8 October 2014

Markets fall as IMF cuts growth forecast, BoJ maintains monetary policy

Markets fell on Tuesday. The S&P 500 and the STOXX Europe 600 both fell by 1.5 percent. Oil fell 1.7 percent. The US 10-year Treasury yield fell eight basis points to 2.34 percent.

The market declines came as the International Monetary Fund cut its outlook for global growth in 2015 to 3.8 percent in its latest World Economic Outlook. This compares with a 4.0 percent forecast in July. Growth is expected to be 3.3 percent this year.

The Bank of Japan is also looking less optimistic. While maintaining its pledge of increasing base money at an annual pace of 60-70 trillion yen, it also noted that factory output was weakening.

Indeed, a report on Tuesday showed that Japan's leading index fell to 104.0 in August from 105.4 in July while the coincident index fell to 108.5 from 109.9.

Meanwhile, a report from Germany on Tuesday showed that industrial production there fell 4.0 percent in August, the biggest decline since January 2009, while in the UK, industrial production was unchanged in August as manufacturing output rose 0.1 percent.

Tuesday, 7 October 2014

Brazilian stocks jump, currency rebounds

Stocks rose on Monday, with the MSCI All-Country World Index climbing 0.4 percent.

Brazil’s Ibovespa in particular jumped 4.7 percent after Aecio Neves won a surprise second-place finish in voting at the weekend to force a runoff election with President Dilma Rousseff.

The Brazilian real appreciated 1.3 percent to 2.4272 per US dollar, rebounding from a five-year intraday low of 2.5073 per dollar on Friday.

The STOXX Europe 600 rose 0.2 percent on Monday but the S&P 500 bucked the trend by falling 0.2 percent.

European stocks rose despite weak economic data on Monday.

Markit reported that its eurozone retail PMI fell to 44.8 in September from 45.8 in August.

And in the euro area's largest economy, Germany, factory orders fell 5.7 percent in August, the most since 2009.

Saturday, 4 October 2014

Stocks gain as US employment jumps but services sector slows

Stocks rose strongly on Friday. The S&P 500 gained 1.1 percent and the STOXX Europe 600 rose 1.0 percent.

A strong US employment report on Friday helped boost stocks. The Labor Department reported that non-farm payrolls rose 248,000 in September while the unemployment rate fell to 5.9 percent, the lowest level since July 2008, from 6.1 percent in August.

Another report on Friday showed that the US trade deficit shrank 0.5 percent in August but a report from the Institute for Supply Management showed that its non-manufacturing index fell to 58.6 in September from 59.6 in August.

The US services sector slowdown was confirmed by Markit, whose index for the sector also fell to 58.9 in September from 59.5 in August, pushing the composite PMI down to 59.0 from 59.7.

The eurozone services sector also slowed in September. A report from Markit on Friday showed that its services PMI for the region fell to 52.4 last month from 53.1 in August, pushing the composite index down to 52.0 from 52.5.

More encouragingly, another report on Friday showed that eurozone retail sales jumped 1.2 percent in August, rebounding from a 0.4 percent fall in July.

Elsewhere in Europe, the Markit/CIPS services PMI for the UK fell to 58.7 in September from 60.5 in August. The composite fell to 58.1 from 59.7.

In China, the National Bureau of Statistics reported on Friday that its non-manufacturing PMI fell to 54.0 in September from 54.4 in August.

In contrast, Japan's services sector moved back into expansion as Markit's services PMI jumped to 52.5 in September from 49.9 in August. That helped push the composite index up to 52.8 from 50.8.

Friday, 3 October 2014

ECB to buy covered bonds and asset-backed securities

European Central Bank President Mario Draghi laid out plans on Thursday to buy debt as part of the central bank's latest stimulus programme. Reuters reports:

He outlined an ECB program to buy reparceled debt known as asset-backed securities as well as covered bonds, secured on solid assets such as property, and raised the prospect of bolstering this market and, in turn, lending.

It is a scheme that will start in mid-October for covered bonds, with other purchases of asset backed securities following before the end of the year. Draghi said the potential 'universe' for the type of debt that the ECB was interested in was up to 1 trillion euros, although ECB buys may not be that high.

Meanwhile, in the US, the Commerce Department reported on Thursday that factory orders fell 10.1 percent in August, the biggest decline on record, as aircraft orders reversed the jump in July. Excluding transportation equipment, orders fell 0.1 percent.

Thursday, 2 October 2014

Stocks fall, global manufacturing slows

Stocks fell on Wednesday. The S&P 500 tumbled 1.3 percent while the STOXX Europe 600 fell 0.8 percent. The US 10-year Treasury yield fell 10 basis points to 2.39 percent.

Economic data on Wednesday were mostly uninspiring.

US data showed that manufacturing growth slowed in September. Markit's US manufacturing PMI slipped to 57.5 last month from 57.9 in August while the Institute for Supply Management’s index fell to 56.6 from 59.0.

Other US data on Wednesday showed that the private sector added 213,000 workers in September but construction spending fell 0.8 percent in August.

In the euro area, Markit reported on Wednesday that its manufacturing PMI for the region fell to 50.3 in September from 50.7 in August. The new orders sub-index fell to 49.3 from 50.7.

Another report on Wednesday showed that the Markit/CIPS UK manufacturing PMI fell to 51.6 in September, its lowest level since April last year, from 52.2 in August.

In China, the National Bureau of Statistics reported on Wednesday that its manufacturing PMI was 51.1 in September, unchanged from the previous month.

However, the Markit/JMMA Japan manufacturing PMI fell to 51.7 in September from 52.2 in August.

Also in Japan on Wednesday, the Bank of Japan's Tankan survey had provided a mixed picture. While the index for large manufacturers rose to plus 13 in the third quarter from plus 12 in the previous quarter, the index for large companies in the non-manufacturing sector tumbled to plus 13 from plus 19.

Wednesday, 1 October 2014

US consumer confidence and home prices fall, eurozone inflation slows

Global economic data on Tuesday were mostly negative.

In the US, the Conference Board's consumer confidence index fell to 86.0 in September from 93.4 the month before, the S&P/Case Shiller composite index of home prices in 20 metropolitan areas rose 6.7 percent in July from the previous year but fell 0.5 percent from the previous month, and the Institute for Supply Management-Chicago business barometer fell to 60.5 in September from 64.3 in August.

In the euro area, inflation slowed further to 0.3 percent in September from 0.4 percent in August while the unemployment rate was unchanged at 11.5 percent in August.

In China, HSBC's manufacturing PMI was unchanged at 50.2 in September from the previous month but was below the preliminary reading of 50.5.

In Japan, industrial production fell 1.5 percent in August, household spending fell 4.7 percent in August from a year earlier and the unemployment rate fell to 3.5 percent in August from 3.8 percent in July.

In the UK, the economy grew 0.9 percent in the second quarter, up from 0.7 percent in the first quarter, but house prices fell 0.2 percent in September after rising 0.8 percent in August.