Wednesday, November 6, 2013

Higher markets on leading economic indicator data

Dow climber 90, advancers ahead of decliners 3-2 but NAZ slid 9.  The MLP index was up a smidgen in the 452s & the REIT index went up 1+ to the 278s.  Junk bond funds rose & Treasuries inched higher.  Oil & gold found buyers after recent selling.

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLZ13.NYM....Crude Oil Dec 13...94.00 Up .....0.63 (0.7%)

GCX13.CMX...Gold Nov 13.....1,318.60 Up ...10.60 (0.8%)

U.S. Retail

Photo:   Bloomberg

The index of US leading indicators rose more than expected in Sep, signaling the economy was poised to strengthen heading into the partial gov shutdown.  The Conference Board’s gauge of the outlook for the next 3-6 months increased 0.7% for a 2nd month. The forecast called for a gain of 0.6%.  Rising stock prices & easier credit are giving Americans the wherewithal to spend heading into the holiday-shopping season.  While the gov closing in Oct discouraged businesses & consumers, the report indicates economic growth will accelerate early next year.  Estimates ranged from increases of 0.2% to 0.8%.

Leading Indicators in U.S. Rose More Than Forecast in September

  • A woman looks over a resume during a job fair in New York June 11, 2012. REUTERS/Eric Thayer
Photo:   Yahoo

The number of planned layoffs at US firms rose 13.5% in Oct on cuts in the pharmaceutical & financial sectors.  Employers announced almost 46K layoffs last month, up from 40K in Sep, according to consultants Challenger, Gray & Christmas.  But for the first time in 5 months, the Oct figure was lower than the year-ago tally, which came in at 48K.  For 2013 so far, employers have announced 433K cuts, close to the 434K seen in the first 10 months of last year.  The pharmaceutical sector saw the most layoffs, with plans to cut 11K employees, mostly from Merck (MRK & a Dow stock).   The financial sector saw the 2nd-biggest cuts, with 9K layoffs announced.  The sector has seen the deepest downsizing so far this year, with 58K cuts announced YTD.  "The banking sector is cutting workforce levels as a direct result of an improving economy. Many banks, including Bank of America, which announced 4,200 job cuts in October, are slashing positions in their mortgage department as the number of troubled mortgages and foreclosures dwindles," said CEO John A. Challenger.  "Furthermore, improvements in the economy are also pushing interest rates back up, which is curbing demand for refinancing."  The figures come 2 days ahead of the key non-farm payrolls report, which is forecast to show the economy added 125K jobs in Oct with the unemployment rate edging to 7.3% from its current 7.2%.

Planned Layoffs Rise: Challenger

Home Prices Climb in 88% of U.S. Cities as Recovery Spreads

Photo:   Bloomberg

Prices for single-family homes climbed in 88% of US cities in Q3 as buyers competed for limited inventories that included fewer discounted foreclosures.  The median transaction price rose from a year earlier in 144 of 163 metropolitan areas measured, the National Association of Realtors said & 1/3 of the areas had double-digit increases.  Home prices are extending a recovery across the country, fueled by a tight supply of listings & a smaller share of distressed sales, which drag down values.  The housing market had 5 months of inventory in Q3, down from 5.9 months a year earlier, according to the Realtors group.  Completed foreclosures in Sep plunged 39% from a year earlier, according to CoreLogic.  Price gains in some cities are approaching unsustainable levels, Fitch Ratings said.  Much of coastal California is more than 20 % overvalued.  The nationwide median price for an existing single-family home was $207K in Q3, up 12.5% from a year earlier.  But rising home prices & borrowing costs are causing some buyers to hold back.  Contracts to buy existing homes dropped the most in more than 3 years in Sep, the Realtors association reported last week.

Home Prices Climb in 88% of U.S. Cities as Recovery Spreads

Dow is at a new record on nothing special kind of news.  Markets are responding to the feeling that Big Ben will keep throwing out money.  Obamacare is getting more attention than scandals in the past because it affects more people.  The governor's race in VA spelled out the rising concern about where health care is going.  After the jobs report on Fri. the next major event for the markets will be retailer earnings which don't look to be good.

Dow Jones Industrials

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