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Technology shares have overtaken financial stocks as the top sector performer for the trailing one-year period, based on a set of ETFs. The formerly high-flying financials have been clobbered recently, in part due to worries that falling bond yields and the blowback due to hurricanes striking the US will take a bite out of earnings for banks and insurers. Tech shares, by contrast, have been relatively steady this week, holding on to nearly all of the sector’s 2017 rally.
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Florida braces for Hurricane Irma: WaPo
Jobless claims rise sharply due to Hurricane Harvey: Bloomberg
Govt’s services survey suggests Q2 growth will be revised up: Reuters‘
European Central Bank holds interest rates steady… for now: CNBC
German industrial output flat in July: MarketWatch
China’s export growth slows in August: RTT
US Treasury yield edges down to 10-month low: MarketWatch

The yield difference on the benchmark 10-year Treasury Note less the 3-month T-bill fell to 1.03 percentage points on Wednesday (Sep. 6), the lowest since Jan. 2008, according to daily data published by Treasury.gov. The latest dip pushed the spread below the previous post-recession low of 1.08 set in July.
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Hurricane Irma batters Caribbean on way to Florida: Bloomberg
Trump and Dems agree to temporarily delay gov’t-shutdown risk: Politico
China’s willing to impose more sanctions on North Korea: Reuters
Fed Vice Chair Stanley Fischer announces he’s leaving in October: Reuters
ISM Non-Mfg. Index rebounds in August after 11-month low: NY Times
US Services PMI rise to 21-month high for August: IHS Markit
Global economy grows at strongest pace in over 2 years: IHS Markit
Mfg orders slide in Germany for July, surprising analysts: MarketWatch
US mortgage refi applications jump to 11-week high: Reuters
GDPNow’s revised US Q3 GDP forecast at 2.9% vs. Q2’s 3.0%: Atlanta Fed

There are no silver bullets for profiling risk, but drawdown’s properties arguably give this metric a leg up over most of the competition. The combination of an intuitive framework, simplicity, and sharp focus on how markets actually behave is a tough act to beat.
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“Extremely dangerous” Hurricane Irma threatens Florida: WaPo
US factory orders disappoint in July but business spending perks up: Reuters
Fed’s Brainard: Low inflation may slow rate hikes: MarketWatch
Fed’s Kashkari says rate hikes doing “harm” to US economy: Bloomberg
Trump’s DACA immigration decision to bite US economy by $400 billion: CNBC
Wall St. Q3 GDP survey for Sep. 5 ticks down to +2.7%: CNBC
US credit downgrade by Moody’s looms if Treasury misses payments: The Hill
10yr Treasury yield falls below 2.10% to a 10-month low: MarketWatch
US stock market tumbles the most in nearly 3 weeks: NY Times

The expected risk premium for the Global Market Index (GMI) continued to rise in August. GMI, an unmanaged, market-value weighted portfolio of the major asset classes, is currently projected to earn an annualized 6.0% (over the “risk-free” rate) in the long run. The estimate is 20 basis points above last month’s forecast.
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A lot can happen over a weekend, including Sunday’s provocative nuclear test by North Korea. Reports that the country is now preparing to launch a new ballistic missile threaten to keep the world on edge this week and beyond.
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The Sep. 3 edition of The US Business Cycle Risk Report has been published and emailed to subscribers.