Tuesday, September 21, 2010

Markets hesitate before the Federal Reserve meeting

Nobody wants to commit before the FED meeting. Dow is flat, decliners ahead of advancers 3-2 & NAZ slid 2. Banks, along with the rest of the markets, hardly budged.


Value 200.45 One-Year Chart for S&P 500 FINANCIALS INDEX (S5FINL:IND)
Change 0.07 (0.0%)

The MLP index is up a fraction in the 331s & the REIT index pulled back 2 to the 217s after reaching its 2010 high yesterday. Junk bond funds were fractionally higher & the VIX rose ½ to 22 (basically little changed from where it's been recently). Treasuries were higher as taking the yield on the 10 year Treasury bond down 3 basis points to 2.67%. The yield on the 2 year Treasury note remains just above the record lows reached last week.

Treasury Securities

U.S. 3-month
U.S. 2-year
U.S. 10-year

Alerian MLP Index --- 2 weeks

Dow Jones REIT Index --- 2 weeks

VIX --- 2 weeks

10-Year Treasury Yld Index --- 2 weeks

Oil supplies hit a 5 week low following the Enbridge (EEP) pipeline shutdown in the Midwest. But that didn't help the price of oil. Gold is in a holding pattern with its eyes on 1300.

CLV10.NYM...Crude Oil Oct 10...73.87 ...Down 0.99

GCU10.CMX...Gold Sep 10...1,275.00 ...Down 4.00

** Gold Super Cycle Link! **Click Here

Housing Starts in U.S. Increased More Than Forecast

Photo: Bloomberg

Construction of new homes & apartments rose 10.5% in Aug from a month earlier to an annual rate of 598K (the highest level since Apr), the Commerce Dept said. Pulling the figures up was a 32% monthly increase in the condominium & apartment market, a small portion of the total market. Single-family homes, representing 73% of the market in Aug, grew more than 4%. Housing starts are up 25% from their bottom 16 months earlier, but remain a whopping 74% below their peak in Jan 2006. Single-family housing starts are up 11% from their low point in Jan 2009, but down 78% from the peak in Jan 2006. The high number of vacant homes, increased expectations of renewed price declines & economic constraints on households are weighing on the industry. Building permit applications, a sign of future activity, grew by nearly 2% to an annual rate of 569K. Conditions are so bad that record low mortgage rates are not helping the industry.

Housing Starts in U.S. Increased More Than Forecast in August

Housing starts - 1 year

One-Year Chart for Total starts (NHSPSTOT:IND)

Building permits - 1 year

One-Year Chart for Total authorized (NHSPATOT:IND)

Mortgage rates - 1 year

One-Year Chart for 30 year Fixed US (NMCMFUS:IND)

Ireland sold €1½B ($2B) of bonds, easing concern that the country may need a European Union bailout. The extra yield investors are demanding to hold 10-year Irish debt over German bonds exceeded 400 basis points for the first time yesterday, narrowed 21 basis points to 381 points after the auction. Investors had fled Irish bonds on concern that the cost of shoring up the country’s banks will hurt efforts to tame the European Union’ biggest deficit & force the country to seek an intl bailout. Ireland considers that bank bailout costs remain “manageable” & shouldn’t derail gov deficit-cutting efforts. The € gained ¾ of a penny to $1.31½.

Ireland Sells Bonds, Calms Concern That Bailout Needed

Carnival (CCL), the world's largest cruise company, reported higher Q3 sales buoyed by increased bookings & lifted its full-year outlook. Since Jun, booking volumes for cruises scheduled during 2010 & the first ½ of 2011 were higher than they were the previous year. Ticket prices have been even with year-ago levels. CCL projects full-year EPS of $2.48-2.52, above estimates of $2.36. "The booking environment has remained solid and we expect revenue yields to continue to improve in 2011 and beyond as the economy regains its footing," said CEO Micky Arison. CCL reported Q3 EPS of $1.62, up from $1.33 last year as revenue rose 6.9% to $4.43B. The stock rose 69¢ (2%).

Carnival Boosts 2010 Profit Forecast on Rising Ticket Prices, Lower Costs

Carnival --- 2 years

Nothing is going on in the markets as they wait for the announcement by the FED. A continuation of low rates is a given, but their comments can move markets.

Dow Jones Industrials --- 2 weeks

Get 10 Trading Lessons FREE!!
Click Here

Get your favorite symbols' Trend Analysis TODAY!
Click Here

No comments: