Monday, September 29, 2014

Markets pare losses as global military conflicts persist

Dow dropped 41 (cutting early losses of over 100), decliners over advancers 3-2 & NAZ fell 6.  The MLP index rose 2+ to the 528s & the REIT index slipped pennies in the 294s.  Junk bond funds slid back & Treasuries gained.  Oil gained for a 2nd day on speculation stronger US economic growth will boost demand for oil.  Gold inched higher from its depths.

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Citigroup (C) said the banking industry could spend as much as $10B annually in coming years to combat money laundering.  Citi has about 30K employees working on control functions, & has made “significant investments” in anti-money-laundering & know-your-customer programs, Jamie Forese, co-president, said in remarks prepared for delivery today.

Citigroup Sees $10 Billion in Annual Compliance Costs for Banks

Contracts to purchase previously owned homes declined in Aug as tighter credit & limited wage growth weigh on potential buyers.  The pending home sales index dropped 1% after a 3.2% increase in Jul, the National Association of Realtors said.  The estimate called for the index to drop 0.5%.  Stricter lending practices since the housing crisis & still-stagnant salary increases are keeping downward pressure on sales activity, particularly for those eyeing properties for the first time.  Further payrolls gains, on track for their best year since 1999, could help spur the wage pickup needed to bring more buyers into the housing market.  Purchase contracts declined 4.1% in the 12 months ending in Aug after a 2.8% annual decline in Jul, the report showed.  Aug marked the 11th month of year-over-year decreases.  The pending sales index was 104.7 on a seasonally adjusted basis.  A reading of 100 corresponds to the average level of contract activity in 2001, or “historically healthy” home-buying traffic.  Pending sales declined in 3 of 4 regions, led by a 3% drop in the Northeast.  Pending sales are considered a leading indicator because they track new purchase contracts.  Existing home sales are tabulated when a deal closes, usually a month or 2 later.

Pending Sales of U.S. Existing Homes Fell 1% in August

Islamic State fighters seized 2 towns in western Iraq, after besieging hundreds of soldiers, according to a regional official.  He said some Iraqi troops were killed & others deserted their posts, without giving details.  Earlier the head of the Anbar council had said that at least 2 battalions of the Iraqi army (260 men) were trapped near Albu Etha, & that efforts were being made to send reinforcements & enable them to break the siege.  The clashes are taking place in a region where US led airstrikes are seeking to roll back the insurgents’ advance.  The Islamic State now controls at least half of the city of Ramadi, the provincial capital, though elsewhere in Anbar the airstrikes have enabled security forces to recapture territory.  Islamic State’s Sunni Muslim militants are reported to have carried out several massacres of troops belonging to Iraq’s Shiite-dominated army since they surged across northern parts of the country in Jun.  The Iraqi gov said last week that more than 1K soldiers were missing after an attack on a military base.  The US & its European & Arab allies have conducted thousands of air missions over Iraq & Syria since beginning a bombing campaign to counter Islamic State.  The group’s leader has declared himself the leader of a caliphate straddling the 2 nations’ frontier.  House Minority Leader Nancy Pelosi called on Speaker John Boehner to initiate a debate in Congress over granting pres Obama a new authorization to use military force to defeat Islamic militants.  The the old days, this was called WAR!

Islamic State Overruns Iraq Army to Seize Towns, Official Says

There has been political unrest in Hong Kong shaking markets around the globe.  Buying late in the day shrugged off those problems, but there are still a number of hot-spots around the world.  The fighting in Ukraine drones on & the Iraq region looks like it is heating up with more US involvement.  On Wed, Nov begins & has the reputation of  having some of the worst days in stock market history.  While the Dow remains close to its record high reached a couple of weeks ago, it's also barely above where it was in Jun.  Housing data today is another reminder the recovery in the US is only stumbling along.  The yield on the 10 year Treasury bond fell from over 2.6% to under 2.5% in just 2 weeks, negative bets on economic stability.

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