S&P 500 FINANCIALS INDEX
The MLP index is still on fire, up 50 (almost 18%) YTD following its best year ever. Today the index shot up another 2 to 335, just 8 shy of setting a new record! The REIT index rose 3 to 205. Junk bond funds were higher. Despite the market gains, the VIX, volatility index, rose a fraction in the 23s remaining near a 3 month low level. The yield on the 10-year Treasury rose more than 1 basis point to a 3.01% yield, remaining in very low territory. The € was strong, up to $1.29½ to its highest level in 3 months as fears about the bank stress tests released on Fri are receding.
Alerian MLP Index --- 2 weeks
Dow Jones REIT Index --- 2 weeks
VIX --- 2 weeks
30-Year Treasury Yld Index --- 2 weeks
Oil has a modest gain after the tropical storm & its bullish implications fade away. Gold is doing little.
|CLU10.NYM||Crude Oil ...Sep 10||...79.22 ||... 0.24 |
|GCN10.CMX||...Gold Jul 10||...1,188.20 ||... 0.50 |
Sales of new homes jumped 24% in Jun to an annual rate of 330K, but it was the 2nd-weakest month on record. The lackluster economy has made potential buyers skittish about shopping for homes. May's number was revised downward to a rate of 267K, the slowest pace on records dating back to 1963. Sales for Apr & Mar were also revised downward. Despite the month's increase, sales are still down 72% from their peak annual rate of 1.39M in Jul 2005. New homes sales made up about 7% of the housing market last year, down from 15% before the bust. Weak sales mean fewer jobs in the construction industry, which normally power economic recoveries. Builders have sharply scaled back construction in the face of a severe housing market bust. The number of new homes up for sale in Mar fell 1.4% to 210K, the lowest level in nearly 42 years. The median sales price in Jun was $213K, down 0.6% from a year earlier & down 1.4% from May. Housing stats remain bleak.
June Sales of U.S. New Homes Climb More Than Forecast
New homes sales - 1 year
Institutions pushed equities up to 68% of holdings in Jul, the highest level in 15 months, from 63% in the prior month. The ratio of bullish to bearish respondents fell to 0.68, the lowest level since July 2009 (based on a 4-week average). Meanwhile money managers are investing more in stocks than at any time since the start of the bull market. The last time money managers & individuals were this far apart was in Mar 2009, before the popular stock averages began their big rallies. Some suggest it may signal (low levels in the chart below) another buying opportunity based on the notion that the retail guy has gotten it wrong more often than right.
Bulls to Bears ratio - 1 year
Stocks began a quiet summer week higher. But the new homes sales report is less bullish than some are making it out to be. BP (BP) is getting a new chief, not sure how much that will help. While stocks are up, MLPs seem to be headed for heaven. The index is so close to setting a record, it might as well shoot up & get it over with. However the disconnect between the performance of the MLP index & popular averages will have to come to an end eventually. And yields on the Treasuries at these low levels is one more major worry for stock markets.
Dow Jones Industrials --- 2 weeks
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