Thursday, September 19, 2013

Markets fluctuate after housing data

Dow fell 8, advancers ahead of decliners 5-4 & NAZ rose 4.  The MLP index jumped another 10 (after yesterday's advance of 10) to 450 & the REIT index was up a fraction to the 277s.  Junk bond funds gave up some of yesterday's gains & Treasuries were also soft.  Oil slipped back but gold had a whopper gain, negative bets on extending the bond buying program by the Federal Reserve.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLV13.NYM...Crude Oil Oct 13...107.91 Down ...0.16  (0.2%)

GCU13.CMX...Gold Sep 13.......1,366.30 Up .58.50 (4.5%)

Newly constructed single family homes are shown for sale in San Diego, California March 25, 2013. REUTERS/Mike Blake

Photo:   Yahoo

US home resales hit a 6½ year high in Aug, signaling continued strength in the housing market recovery, which has helped shore up the economy by bolstering household finances & supporting consumer spending.   The National Association of Realtors said existing home sales increased 1.7% to an annual rate of 5.48M units last month, the highest level since Feb 2007 when property values began to decline after the sector's boom & bust.  The forecast had expected home resales to rise to a 5.25M unit rate.  Lawrence Yun, NAR chief economist, said the housing market may be experiencing a temporary peak as would-be buyers sitting on the fence are pushed to close deals ahead of likely price & borrowing cost increases.

Sales of U.S. Existing Homes Unexpectedly Climb to Six-Year High

A student organizes his papers before meeting with potential employers at the 2012 Big Apple Job and Internship Fair at the Javits Center in New York April 27, 2012. REUTERS/Andrew Burton

Photo:   Yahoo

The number filing new claims for jobless benefits rose last week, but it was difficult to get a clear read on the labor market's health because a Labor Dept analyst said 2 states appeared to be working thru a backlog of unprocessed claims.  Initial claims for state unemployment benefits increased 15K to 309K according to the Labor Dept.  Claims data have been thrown into disarray since an update in gov computer systems in Cal & Nevada created a backlog in the processing of new claims 2 weeks ago.  That initially led to a sharp decline in new processed claims earlier this month, & a Labor Dept analyst said the 2 states still appeared to be working through the backlog, which could take another week or 2.  If taken at face value, the data hinted at a pickup in hiring during Sep.  The data was collected during the same week the Labor Dept surveys employers for its monthly employment report.  At 314K, the 4-week average was about 5% lower than it was during the survey week in Aug, when employers added a lackluster 169K jobs to payrolls.  However, even that reading, which smooths out weekly volatility, could rise in coming weeks if a backlog of claims continues to be cleared.

Jobless Claims in U.S. Increase Less Than Forecast

JPMorgan Chase Agrees to Pay $920 Million for London Whale Loss

Photo:   Bloomberg

JPMorgan, a Dow stock, will pay $920M & admit wrongdoing in a settlement with US & British regulators over the $6B "London Whale" trading loss last year that tarnished its reputation.  The UK Financial Conduct Authority fined the company $220M, the British Securities & Trade Commission fined $200M & required JPM to admit wrongdoing.  The US Federal Reserve Board imposed a $200M penalty, while the Office of the Comptroller of the Currency set a $300M fine.  Weak internal controls at the biggest US bank enabled traders in its London operation to assign inflated values to trades & cover up losses as they ballooned.  2 traders face criminal charges of falsifying records to hide the losses.  The stock lost 53¢.

JPMorgan Agrees to Pay $920 Million for London Whale Loss

J P Morgan Chase (JPM)

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Stocks are taking a breather after yesterday's jump to new record highs for the Dow & S&P 500.  Now that the excitement has calmed down, more attention will be paid to the goings on in dysfunctional DC.  The Reps have come up with an alternative plan to Obamacare which they want to push thru.  In the House, they are proposing funding gov thru Dec 15 if their plan is accepted.  Of course, the Dems will not accept it & the battlle will heat up with no resolution in sight.  The Sep deadline is approaching & it looks like nothing will be settled until Oct.  Not good for the stock market.

Dow Jones Industrials

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