Thursday, October 23, 2014

Markets soar on earnings

Dow shot up 235, advancers over decliners 5-1 & NAZ advanced 70.  The MLP index jumped 6+ to the 511s & the REIT index went up 1 to 311.  Junk bond funds were about 1% higher & Treasuries retreated as stocks rose.  Oil rebouned from 80 & gold declined as money flowed into stocks.

AMJ (Alerian MLP Index tracking fund)

stock chart

CLZ14.NYM....Crude Oil Dec 14...81.23 Up ...0.71 (0.9%)

GCV14.CMX...Gold Oct 14......1,243.90 Down ...0.90  (0.1%)

The Conference Board’s index of leading economic indicators gauge of the outlook for the next 3-6 months climbed 0.8% after an unchanged reading the prior month.  The forecast called for a rise of 0.7% & estimates ranged from gains of 0.2%-0.9%.

Leading Economic Indicators Index in U.S. Rose 0.8% in September

Home prices in the US rose more than estimated in Aug as employment growth fueled demand for housing.  Prices climbed 0.5% on a seasonally adjusted basis from Jul, the Federal Housing Finance Agency (FHFA) said.  The estimate was for a 0.3% increase.  Values have been rising as an improving economy drives demand for properties.  Sales of previously owned homes increased 2.4% in Sep to the highest level in a year, the National Association of Realtors said earlier this week.  The jobless rate dropped to a 6-year low of 5.9% last month.  The FHFA’s report showed prices rose 4.8% in Aug from a year earlier.  But the US index is 5.8% below its April 2007 peak & about the same as the Aug 2005 level.  The FHFA index measures transactions for single-family properties financed with mortgages owned or securitized by Fannie Mae & Freddie Mac.  The median price of a home sold in Sep was $210K, up 5.9% from a year earlier, the Realtors group said.

U.S. Home Prices Rose 0.5% in August, FHFA Says

Chinese Manufacturing

Photo:    Bloomberg

A Chinese manufacturing gauge rose in Oct, adding to signs a resilient labor market & export demand are helping the economy weather a housing market downturn.  The preliminary Purchasing Managers Index from HSBC Holdings & Markit Economics was at 50.4, exceeding the median estimate of 50.2, which was also the level of Sep final reading.  Numbers above 50 indicate expansion.  Chinese policy makers are trying to avoid a deeper slowdown after GDP expanded 7.3% in Q3 from a year earlier, the weakest pace in more than 5 years.  While the gov has relaxed home-purchase controls & pumped liquidity to lenders, the economy also got support from a pick-up in exports in Sep.  Output, new orders & new export orders all increased at a slower rate, while output & input prices decreased at a quicker rate, suggesting disinflationary pressure intensified.  The producer-price index fell 1.8% in Sep from a year earlier, a record-tying 31st monthly decline, data last week showed.

Stocks are flying again.  There were a lot of earnings reports, including form Dow stocks, & they were generally favorable.  Dow is back in the black YTD with a gain of only 1%.

Dow Jones Industrials

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