Stocks surge on October housing purchases

Dow exploded out of the gate & continues near its best levels. Dow is up 155, advancers over decliners 6-1 while NAZ rose 36. Dow is at another 2009 high, NAZ is only a few points away from its high set last week. Banks are doing well, the Financial Index once again is trying to get over the 200 line (it needs 212 to set a 2009 high).


S&P 500 FINANCIALS INDEX

Value 199.98

Change 3.78

% Change 1.9%

High yielders are participating in this rally. The Alerian MLP Index is up 2½ to the 264s, very close to its high for 2009. The REIT index is up 3, only 8 away from its high set 2 months ago. Junk bond funds are fractionally higher. Treasuries sold off, the yield on the 10-year Treasury bond rose 4 basis points to 3.39%. However, the yield on on the 90 day bill is at or near zero interest (showing 0.01% annual rate). The yield spread charts shows the very large spread between the short rates of zero & long rates of over 3-4%. The last time Treasury bill rates were so low while the stock markets advancers was in 1938.


Alerian MLP Index --- 2 weeks




Dow Jones REIT Index --- 2 weeks




90 day Treasury bill rate - 1 year




Treasury yield curve

Oil is having a good day trying to get back over 80. Gold is showing a big advance at Bloomberg, to another record:

CLF10.NYM

...Crude Oil Jan 10

...79.54 ...

2.07 .......(2.7%)

Prices from Bloomberg:

	VALUE	CHANGE	% CHANGE
Oil	79.41	1.94	2.5%
Gold	1,170.30	23.50	2.1%

Home resales far exceeded expectations in Oct, surging 10.1% to the highest level in 2½ years. Oct sales imply an annual rate of 6.1M, up from a downwardly revised rate of 5.54M in Sep. Sales were also nearly 24% above last year's level. The median sales price was $173K down 7.1% from last year & off 1.6% from Sep. The share of homes sold as foreclosures rose to 30% from 29% in Sep. While good news, sales were spurred by the threat of expiration of the tax benefit not to mention in the "good old days" sales were double this rate.


Existing U.S. Home Sales Jump to Highest Level Since 2007 on Tax Incentive

Purchases of new homes - 1 year





Stocks & commodities are flying while rates on Treasury bills are at zero. A shortened, holiday week, generally with only limited news, should be a quiet time for the markets. But stocks are attracting plenty of buyers as are Treasury bills (where frightened money goes). This cold be a very exciting week.

Dow Jones Industrials --- 2 weeks