Dow climbed 26, advancers over decliners 4-3 & NAZ added 30. The MLP index rose 2+ to 448 & the REIT index slipped a fraction to the 324s. Junk bond funds were a tad lower & Treasuries sold off. Oil was slightly lower as it adjusts to the $60 level & gold was essentially flat.
AMJ (Alerian MLP Index tracking fund)
AMJ (Alerian MLP Index tracking fund)
|CL.NYM||....Crude Oil Jun 15||....59.45||...0.24||(0.4%)|
Confidence among US homebuilders unexpectedly fell in May, reflecting cooling sales & slower buyer traffic, a sign the residential real-estate market will take time to gain momentum. The National Association of Home Builders/Wells Fargo sentiment gauge dropped to 54 this month from 56 in Apr. Readings greater than 50 mean more respondents report good market conditions. The forecast called for an increase to 57. The drop in confidence helps explain why builders are trying to offer more lower-priced homes in a bid to attract customers waiting to see if the economy rebounds from the Q1 slump. At the same time, construction chiefs became more optimistic about the future as still-low mortgage rates & an improving job market underpin the market. The gauge of prospective buyer traffic declined to 39 from 40 the prior month, while the index of current single-family home sales decreased to 59 from 61. The measure of the 6-month sales outlook improved to 64, the highest so far this year, from 63. “Consumers are exhibiting caution, and want to be on more stable financial footing before purchasing a home,” the NAHB said. “On the bright side, the HMI component measuring future sales expectations has been tracking upward all year, mortgage rates remain low, and house prices are affordable. These factors should spur the release of pent-up demand moving forward.” The drop in builder confidence mainly reflected reduced optimism among companies in the Midwest, where the index fell to 51 this month from 55. Borrowing costs remain relatively low. The average 30-year, fixed-rate mortgage was 3.85%, close to the level at the start of 2015 & below last year’s high of 4.53% in Jan 2014, according from Freddie Mac. The latest data available on house sales show a mixed picture. Purchases of previously owned homes jumped in March by the most in 4 years, while those of new dwellings, a smaller part of the market, fell to the slowest pace in 4 months. At the same time, recent reports have raised the risk the economy may not rebound as strongly as projected after barely growing in Q1.
Consumers should be paying $5T more a year for their energy to cover the hidden health & environmental costs of fossil fuel use, the IMF said. "These estimates are shocking," the head of the IMF's fiscal affairs said (whose dept produced the report). "They correspond to one of the largest negative externalities ever estimated," the IMF said, referring to costs that aren't factored into prices. Policy makers should start capturing those costs valued at roughly 6% of global GDP in fuel prices now to curb the damaging effects of their use, encourage greater energy efficiency & prevent the mounting health toll. Largely from the ballooning use of coal in China & India, the toll far surpasses the savings gleaned in the past year as govs around the world slash traditional energy subsidies. Falling oil prices have given govs an opportunity to raise energy prices closer to their market values. Cutting subsidies relieves a burden on state balance sheets & allows a gov to channel its revenue elsewhere, such as social services, health care or growth-spurring investments. But the IMF said the untallied costs of pollution from coal, oil & natural gas also should be considered subsidies because economies are burdened with mounting health-care & environmental degradation charges. Around a qtr of that figure captures the imagined cost of mitigating greenhouse-gas emissions. But the rest is from the health effects of local pollution, the effects on traffic congestion, traffic accidents and road damage.
MasterCard Inc. is poised to receive an antitrust complaint from EU watchdogs probing card-payment fees, according to 3 leakers. Regulators may send a statement of objections to MA before the end of Jul. Such filings in antitrust probes are usually a precursor for fines. EU antitrust regulators have targeted swipe fees on credit & debit-cards for more than a decade, warning that the way the charges are collectively agreed on is anti-competitive. The latest EU case, opened in 2013, targeted excessive fees when foreign visitors go shopping in the 28-nation bloc, as well as measures thwarting cross-border competition among banks that offer card services to traders. The EU antitrust watchdog said at the time it would also investigate the “honor all cards” rule, which obliges a merchant to accept all types of cards from the company, including premium products bundled with add-ons such as insurance & travel services. MA “is working with the European Commission on the issue as part of an ongoing constructive dialog,” the company said. Amid a regulatory clampdown, the EU has passed a law that would cap interchange fees on card payments & cut costs on such card transactions by €6B ($6.8B) per year. Retailers have campaigned for years against interchange fees, saying that they push up the final costs of goods & services, & amount to a hidden charge on consumers. Card companies insist that the fees ensure that retailers make a fair contribution to the underlying costs of electronic payment systems. The stock lost chump change. If you would like to learn more about MA, click on this link:
Buyers were out again taking the averages to new records. OK, while NAZ is just below its record & very close. There was no special news other than Carl Icahn's call for Apple (AAPL), now a Dow stock, to go much higher. A lot of retailer earnings are coming out this week & next. Today's rally is not concerned or hoping for the best. But they may be disappointing. Housing & consumer data continues to be uneven. In the short term, Greece's fate may be a key driver for the markets & that looks to be unpleasant.
Dow Jones Industrials