Dow fell 40 in a vastly overbought market, decliners over advancers 3-2 but NAZ gained 15. Selling was heaviest in bank stocks after a substantial run in Oct & concerns about Q3 earnings reports. The Financial Index fell 4 to the 167s, still up 15 from the lows at the start of the month. The MLP index went up 2 the the 352s, above the the technically important 351 level, but the REIT index fell 2 to the 207s. Junk bond funds were generally lower but Treasuries rose after recent selling. A table of low Treasury yields is provided below. Oil dropped for a 2nd day as equities declined on a decrease in JPMorgan (JPM) earnings & after oil crude supplies increased more than forecast in a gov report. Gold fell for the 2nd time this week as equities declined & gains in the dollar curbed demand for this alternative asset.
Click for the latest market update below:
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif)
The average rate on the 30-year fixed mortgage rose this week after falling below 4% for the first time in history. Freddie Mac said that the rate on the 30-year loan rose to 4.12%, up from 3.94% last week, the lowest rate ever according to the National Bureau of Economic Research. The average rate on the 15-year fixed mortgage increased to 3.37 % from 3.26%, also a record. But super low rates haven't been enough to lift the housing market, which has been struggling with anemic sales & declining home prices. Rates have been below 5% for all but 2 weeks in the past year. Just 5 years ago they were closer to 6½%. Sales of previously occupied homes this year are on track to be among the worst in 14 years & sales of new homes are on pace to finish the year as the lowest on records dating back a half-century. For many, buying a house is too big a risk in this economy with unemployment stuck near 9% for more than 2 years, wage raises are scarce & millions of foreclosures that are forcing down home prices. Others can't qualify for the historically low rates because banks are insisting on higher credit scores & 20% down payments for first-time buyers. Some repeat buyers have too little equity invested in their homes to qualify for loans. Just half of Americans say they'll ever be able to save enough money to save for a down payment, according to a survey by the National Foundation for Credit Counseling. Mortgage rates are low because they tend to track the yield on the 10-year Treasury bond. All signs are for gloom to continue in housing, a big part of the overall economy.
30-Year Mortgage Rates Rise From Record Low
Enterprise Product Partners increased its distribution 5% to a $2.45 annual rate, it's 29th consecutive quarterly distribution increase. Plains All American Pipeline increased its distribution rate 4.7% over last year to an annual rate of $3.98, extending its history of increasing distributions (28 out of the past 30 qtrs). EPD is the largest MLP & PAA is one of the largest. EPD, with a yield of 5.8%, rose 6¢ & the PAA, with a yield of 6.5%, was up 22¢. More distribution increases from MPs are expected in the next few weeks.
Plains Raises Distribution Rate Zacks
Photo: Yahoo
Bank of America, a Dow stock, plans to eliminate 324 jobs in New York starting next month, including investment bankers & equity traders. The reductions are part of 3500 cuts disclosed in Aug. CEO Brian Moynihan said he’ll cut 30K more jobs over the next few years (out of 288K workers). Wall Street firms including Barclay's Capital & Credit Suisse have reduced staffs as revenue from trading stocks & bonds has eroded. These moves also aggravate the high unemployment rate. BAC fell 36¢ on a bad day for bank stocks.
Dow retained half of the maximum AM gains by the end of trading. The excitement in Europe has quieted down. It looks like bailout II for Greece will go forward averting an ugly situation, at least for the time being. But earnings season has just started & it may not get passing grades if the first 2 major reports provide guidance. 3 of the biggest banks will be reporting in the next few days & those reports will probably be repeats of what JPM said today. Global attention may now switch from Europe to DC. Dems already have warned about not cutting expenses at a time when a super committee is charged with reducing massive gov budget deficits. What was thought of as rosy 2011 at the start of the year, is not turning out that way. I continue to believe that overbought markets are vulnerable & may continue range-bound as they have for a few months. Google (GOOG) just reported good numbers after the close & the stock jumped $29 in after hours trading. That's one plus for tomorrow.
| Maturity | Yield | Yesterday | Last Week | Last Month |
|---|---|---|---|---|
| 3 Month | 0.00% | 0.00% | 0.00% | 0.00% |
| 6 Month | 0.03 | 0.03 | 0.01 | 0.03 |
| 2 Year | 0.27 | 0.28 | 0.26 | 0.20 |
| 3 Year | 0.50 | 0.53 | 0.44 | 0.35 |
| 5 Year | 1.09 | 1.15 | 1.00 | 0.88 |
| 10 Year | 2.17 | 2.21 | 1.99 | 1.99 |
| 30 Year | 3.15 | 3.20 | 2.95 | 3.33 |
ALERIAN MLP Index (^AMZ)
DJ REIT INDEXDJR (^DJR)
Click for the latest market update below:
Treasury yields:
U.S. 3-month | 0.015% | |
U.S. 2-year | 0.273% | |
U.S. 10-year | 2.173% |
| CLX11.NYM | ...Crude Oil Nov 11 | ...84.39 | ... 1.18 | (1.4%) |
The average rate on the 30-year fixed mortgage rose this week after falling below 4% for the first time in history. Freddie Mac said that the rate on the 30-year loan rose to 4.12%, up from 3.94% last week, the lowest rate ever according to the National Bureau of Economic Research. The average rate on the 15-year fixed mortgage increased to 3.37 % from 3.26%, also a record. But super low rates haven't been enough to lift the housing market, which has been struggling with anemic sales & declining home prices. Rates have been below 5% for all but 2 weeks in the past year. Just 5 years ago they were closer to 6½%. Sales of previously occupied homes this year are on track to be among the worst in 14 years & sales of new homes are on pace to finish the year as the lowest on records dating back a half-century. For many, buying a house is too big a risk in this economy with unemployment stuck near 9% for more than 2 years, wage raises are scarce & millions of foreclosures that are forcing down home prices. Others can't qualify for the historically low rates because banks are insisting on higher credit scores & 20% down payments for first-time buyers. Some repeat buyers have too little equity invested in their homes to qualify for loans. Just half of Americans say they'll ever be able to save enough money to save for a down payment, according to a survey by the National Foundation for Credit Counseling. Mortgage rates are low because they tend to track the yield on the 10-year Treasury bond. All signs are for gloom to continue in housing, a big part of the overall economy.
30-Year Mortgage Rates Rise From Record Low
Enterprise Product Partners increased its distribution 5% to a $2.45 annual rate, it's 29th consecutive quarterly distribution increase. Plains All American Pipeline increased its distribution rate 4.7% over last year to an annual rate of $3.98, extending its history of increasing distributions (28 out of the past 30 qtrs). EPD is the largest MLP & PAA is one of the largest. EPD, with a yield of 5.8%, rose 6¢ & the PAA, with a yield of 6.5%, was up 22¢. More distribution increases from MPs are expected in the next few weeks.
| EPD ups distribution payment to unit holders by 5% at MarketWatch | ||
Enterprise Products Partners L.P. (EPD)
Plains All American Pipeline, L.P. (PAA)
Bank of America, a Dow stock, plans to eliminate 324 jobs in New York starting next month, including investment bankers & equity traders. The reductions are part of 3500 cuts disclosed in Aug. CEO Brian Moynihan said he’ll cut 30K more jobs over the next few years (out of 288K workers). Wall Street firms including Barclay's Capital & Credit Suisse have reduced staffs as revenue from trading stocks & bonds has eroded. These moves also aggravate the high unemployment rate. BAC fell 36¢ on a bad day for bank stocks.
Bank of America Corporation (BAC)
Dow retained half of the maximum AM gains by the end of trading. The excitement in Europe has quieted down. It looks like bailout II for Greece will go forward averting an ugly situation, at least for the time being. But earnings season has just started & it may not get passing grades if the first 2 major reports provide guidance. 3 of the biggest banks will be reporting in the next few days & those reports will probably be repeats of what JPM said today. Global attention may now switch from Europe to DC. Dems already have warned about not cutting expenses at a time when a super committee is charged with reducing massive gov budget deficits. What was thought of as rosy 2011 at the start of the year, is not turning out that way. I continue to believe that overbought markets are vulnerable & may continue range-bound as they have for a few months. Google (GOOG) just reported good numbers after the close & the stock jumped $29 in after hours trading. That's one plus for tomorrow.
Dow Industrials (INDU)
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