A third of US state economies are contracting and another 13 are “treading water,” according to analysis from Moody’s Analytics. Two of the states with the biggest influence on US GDP — California and New York — appear to be at the tipping point. “Those two states are treading water. They’re big states, and if they go into the red then that’ll probably take the national economy with them into recession,” predicts Moody’s chief economist, Mark Zandi.

The Bureau of Labor Statistics is preparing a delayed inflation report. The agency, which shut down last week due to a political impasse on funding in Congress, is reportedly calling back some employees from furlough to work on the September update of the consumer price index.

China’s new restrictions on rare earths exports threatens trade talks with the US. The Wall Street Journal reports: “President Trump says Washington is weighing a response.”

Rare earths stocks surge after China tightens exports for the commodities, which are critical inputs for a variety of consumer, industrial, and military items. Among the winners: USA Rare Earth (USAR), NioCorp Developments (NB), and Ramaco Resources (METC).

A major trading platform in the UK warns investors that Markets “Bitcoin is not an asset class” and cryptocurrencies should not be in your portfolio. The announcement by Hargreaves Lansdowne follows the lifting of a ban for retail investors in the UK for accessing crypto exchange traded notes.

A study by TMC Research finds a mixed record across asset classes for offsetting the five deepest US stock market drawdowns since 2007. The research shop, a unit of The Milwaukee Company, a wealth manager, notes that the analysis suggests that investors should routinely diversify across asset classes to hedge against future stock market volatility.

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