Tuesday, September 24, 2013

Markets fluctuate on consumer confidence data

Dow went up 21, decliners just ahead of advancers & NAZ gained 13.  The MLP index was up a fraction in the 443s & the REIT index slid a fraction to the 271s.  Junk bond funds were mixed & Treasuries gained ground.  Oil & gold were lower.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLX13.NYM...Crude Oil Nov 13...102.61 Down .....0.98  (1.0%)

GCU13.CMX...Gold Sep 13........1,309.50 Down ...17.40  (1.3%)

US single-family home prices rose in Jul albeit at a slightly slower pace, though their gain from a year ago was the strongest in more than 7 years.  The S&P/Case Shiller composite index of 20 metropolitan areas rose 0.6%, which compares with the forecast for a 0.8% gain.  Prices rose 0.9% in Jun.  On a non-adjusted basis, prices rose 1.8%.  Compared to a year earlier, prices were up 12.4%, matching expectations & marking the strongest rise since Feb 2006.  Prices were up 12.1% in the year to Jun.  The report suggested the housing sector continues to recover despite a recent rise in mortgage costs.  Prices in all 20 cities rose, led by a 27.5% surge in Las Vegas, followed closely by a 24.8% gain in San Francisco.  This data is old, when the rise in mortgage rates was beginning.

Home Prices in U.S. Cities Increase by Most in Seven Years

In this Wednesday, Sept. 18, 2013 photo, pedestrians with shopping bags cross a street in Philadelphia. The private Conference Board reports on consumer confidence for September on Tuesday, Sept. 24, 2013. (AP Photo/Matt Rourke)

Photo:  Yahoo

Americans' confidence in the economy fell slightly in Sep from Aug, as many became less optimistic about hiring & pay increases over the next 6 months.  The Conference Board said Tuesday its consumer confidence index dropped to 79.7 in Sep, down from the Aug reading of 81.8 (slightly higher than previously estimated).  The Sep reading was only slightly below the Jun reading of 82.1, the highest in 5½ years.  While confidence has bounced back from the depths of the last recession, it has yet to regain a reading of 90 that typically coincides with a healthy economy.  In Sep, confidence fell on a dimmer outlook for the next few months. Lynn Franco, who oversees the survey, said that reflected concerns about the job market & wages.  Consumers were actually more optimistic about present conditions.  "While overall economic conditions appear to have moderately improved, consumers are uncertain that the momentum can be sustained in the months ahead," Franco said.

Consumer Confidence Index in U.S. Decreased to 79.7 in Septembe

Lennar, the 3rd-largest US homebuilder, fiscal Q3 earnings rose as the company sold more homes & raised prices.  EPS climbed to 54¢ from 40¢ a year earlier.  The forecast was for 45¢.  Builders have been able to increase earnings amid tight supplies of existing homes on the market & rising demand from buyers.  Homebuilders are at risk of their profit margins narrowing as higher interest rates limit their ability to raise prices further & require them to offer more incentives to complete sales.  “We continue to see long-term fundamental demand in the market driven by the significant shortfall of new single-family and multi-family homes built over the last five years.”  CEO Stuart Miller said.  “While there may be bumps along the road that may impact the short-term pace of the recovery, the long-term outlook for our business remains extremely bright.”  Revenue rose to $1.6B from $1.1B a year earlier as the number of houses delivered increased to 4990 houses from 3655.  The average sales price increased to $291K from $258K, & orders climbed 14% to 4785 homes.  LEN has diversified under Miller into developing land & apartments & investing in distressed real estate.  The stock rose $1.

Lennar Third-Quarter Profit Beats Estimates on House Price Gain

Lennar (LEN)

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Stocks are muddling along.  The pres is making a speech at the UN which will say nothing new.  Meanwhile DC is in chaos.  Some of the Reps are bent on stopping Obamacare at all costs while the Dems are willing to fight to the death defending it.  This fight will not go away, just get uglier.  Then there's the battle to raise the debt ceiling, which the Dems are saying that raising the debt ceiling won't cost anything.  Huh??  That must be new match being taught.  Last minute solutions to these complex problems will accomplish nothing, just kick the can down the road.  Yield securities are seeing selling, but not Dow stocks (at least yet).

Dow Jones Industrials

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