Tuesday, November 26, 2013

Markets fluctuate after consumer confidence and housing data

Dow went up 17 to another record, advancers slightly ahead of decliners & NAZ climbed 11, taking it over 4K for the first time in 13 years.  The MLP & REIT indices were about even & junk bond funds had modest gains.  Treasuries also  rose while the commodities did little. 

AMJ (Alerian MLP Index tracking fund)

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Treasury yields:

U.S. 3-month


U.S. 2-year


U.S. 10-year


CLF14.NYM...Crude Oil Jan 14..............94.09 Down ...0.01  (0.1%)

ZGZ13.CBT.....Gold 100 oz. Dec 13...1,237.70 Down ...3.40  (0.3%)

Building Permits in U.S. Increased in October to Five-Year High

Photo:   Bloomberg

More applications for home construction were issued in Oct than at any time in the past 5 years, a sign the residential real-estate market is gaining momentum.  Building permits increased 6.2% to a 1.03M annualized rate, the most since Jun 2008, after a Sep pace of 974K, according to the Commerce Dept.  The estimate was for a 930K rate.  The improvement over the past 2 months was paced by a surge in applications for multifamily housing that indicates growing demand for either rental units or condominiums.  Improvement in the housing market may continue as a pickup in employment offsets higher borrowing costs, rekindling demand for new homes & existing inventories remain tight.  Permits for multifamily units climbed 15.3% to a 414K pace, the most since Jun 2008, & followed a 20.1% jump in Sep.  Excluding a surge related to a change in New York City’s building code that took effect in Jul 2008, applications would have been the strongest since Nov 2007 (the month before the recession began).  Single-family building permits climbed 0.8% last month to a rate of 620K.

Building Permits in U.S. Jump to Five-Year High

The index of consumer confidence from the Conference Board decreased to 70.4 in Nov from a revised 72.4 a month earlier.  The forecast called for a reading of 72.6 with estimates of 65-81.  Not a good sign as the holiday shopping season begins.

Consumer Confidence Index in U.S. Decreased to 70.4 in November

Tiffany & Co. Store in New York

Photo:   Bloomberg

Tiffany posted Q3 profit that topped estimates & boosted its annual earnings forecast as the rising US stock market gave wealthy consumers the confidence to buy higher-priced merchandise.  EPS rose to 73¢ from 49¢ last year.  Analysts forecasted 58¢.  The company is benefiting from surging stock prices & rising home values that are bolstering affluent shoppers’ willingness to purchase discretionary goods such as jewelry & accessories.  Price increases & falling precious metal costs also contributed to the profit increase.  EPS excluding some items will be $3.65-$3.75 in the year ending Jan 31, up from a previous forecast of $3.50-$3.60 a share, TIF said.  Analysts estimated $3.62.  Higher prices & lower product costs widened gross margin to 57% from 54.4% a year earlier.  Analysts estimated 55.1%.  Revenue rose 6.9% to $911.5M, topping the $889M projection.  In the Americas, sales at stores open at least a year rose 1%, bolstered by growth at the Fifth Avenue store.  Asia-Pacific comparable sales gained 22%.  Shoppers were drawn by its expanded fashion jewelry designs, including the Atlas collection featuring Roman numerals, as well as continued growth in fine & statement jewelry, with particular strength in its yellow diamond collection.  The stock surged 6.22 (8%).

Tiffany Profit Tops Estimates as Jeweler Raises Prices

Tiffany (TIF)

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Stocks are having another quiet day.  Despite unhappiness over the Iranian deal, the markets are not greatly disturbed.  With just a little over 2 weeks left before the next budget battle deadline in DC, markets are content to await developments.  Short of any dramatic news, the remainder of this shortened week should not be exciting in the markets.

Dow Jones Industrials

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