Tuesday, June 24, 2014

Higher markets on rising consumer confidence

Dow went up 26, advancers over decliners 2-1 & NAZ jumped 29.  The Alerian MLP soared another 4+ to the 514s, yet another new record, & the REIT index went up a fraction to 303.  The MLP index is up a startling 60 in just the last 3 months, one of its best streaks in history!  Junk bond funds were mixed & Treasuries rose a tad.  Oil was flat while gold inched higher.

AMJ (Alerian MLP Index tracking fund)

CLQ14.NYM....Crude Oil Aug 14...105.95 Down ....0.22  (0.2%)

GCM14.CMX...Gold Jun 14.........1,320.50 Up ...2.50 (0.2%)

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The Conference Board’s index of US consumer confidence increased to 85.2 in Jun from 82.2 a month earlier, beating the projection of 83.5 with the.estimates rang of 81-86. 

Consumer Confidence Index in U.S. Increased to 85.2 in June

Purchases of new homes in the US rose in May by the most in 22 years, indicating the industry is rebounding from a winter-induced lull at the start of the year.  Sales increased 18.6%, the biggest one-month gain since 1992, to a 504K annualized pace, according to the Commerce Dept.  The reading exceeded all forecasts & was the strongest since in 6 years.  Today’s report, following data yesterday that showed a pickup in existing home sales, shows housing is gathering momentum as employment improves & borrowing costs stabilize.  Builders are optimistic the recovery is on track after harsh weather in early 2014 hurt demand.  The forecast projected a gain to a 439K annualized rate.  The reading for the prior month was revised to 425K from a previously reported 433K.  The median sales price increased 6.9% from May 2013 to $282K & the number of houses for sale at the end of the month held at 189K.  Purchases climbed in all 4 regions, led by a 54.5% jump in Northeast.  The supply of homes at the current sales rate dropped to 4.5 months, the lowest since Jun 2013, from 5.3 months in Apr. 

Sales of New U.S. Homes Surged in May to Highest Since 2008

Sec Kerry met with leaders in the capital of Iraq's semi-autonomous Kurdish region in his bid to prod the country to unite against an al-Qaeda offshoot that has seized control over swaths of the country.  In his 2nd visit to Iraq in as many days, Kerry met in Erbil with Massoud Barzani, pres of the Kurdistan Regional Gov & other Kurdish leaders.  He brought the same plea for cooperation he delivered yesterday to politicians in Baghdad as Iraq works to form a new gov after Apr elections.  Kerry said after the meeting that Barzani “made it clear that he wants to participate in the process, that he wants to help choose the next government” of Iraq.  But Kerry didn’t say Barzani disavowed Kurdish aspirations for independence.  The US says sectarian divisions have helped the al-Qaeda offshoot, the Sunni Islamic State in Iraq & the Levant, consolidate its control over areas of Iraq, OPEC’s 2nd-biggest oil producer, since capturing Mosul 2 weeks ago.  Kerry’s visit to Baghdad yesterday added to US pressure on Iraqi leaders to form a more inclusive gov.  Before Kerry’s arrival from Amman, Jordan, Barzani signaled yesterday that the Kurds, a minority of 6.5M, may push for full independence from Iraq.  “After the recent events in Iraq, it has been proven that the Kurdish people could seize the opportunity now,” Barzani said.  “The Kurdistan people should now determine their future.”  He added, “Iraq obviously is falling apart anyway.”  Barzani told Kerry his visit comes at a “very important time.”  We seek “a solution for the crisis that we have witnessed,”  Barzani said. “With these changes we are facing a new reality and a new Iraq.”  The visit comes amid battles to control a major refinery at Baiji, north of Baghdad, the site of almost 2 weeks of fighting.  Throughout the fighting there have been conflicting reports of who controls the site.

Kerry Urging Kurds to Help Form United Government in Iraq

Economic data has been favorable although retail sales, an important part of GDP, have given uneven results.  The Iraqi mess is the top news story & Kerry is there to show US concern.  He is trying to work out an arrangement for Iraq to form a new gov, which seems to be all but impossible with Malki in charge.  The Iraqi conflict is bleeding into nearby countries starting with Syria, Jordan & Iran.  In addition, Israel is concerned that the US might soften its stance on the Iranian nuclear program to seek Shiite Iran’s cooperation in rolling back gains of Sunni Muslim insurgents in Iraq.  Meanwhile, ISIL seems to have the upper hand as it gains territory in the northern region of Iraq.  Stock traders are content to await developments while they continue to buy stocks.

Dow Jones Industrials

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