Dow rose 189 (closing near the highs), advancers over decliners almost 3-1 & NAZ went up 48. The MLP index recovered 9+ to the 385s & the REIT index added a fraction to the 316s. Junk bond funds went higher along with stocks & Treasuries retreated. Oil finally found friends & rallied 1% in the 47s while gold slid lower.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.2657395585461535)
US consumer confidence took its biggest tumble in 4 years in Jul on a less upbeat jobs outlook, while home appreciation in major cities stalled in May, suggesting a spring pause in housing demand. The disappointing data comes as the FOMC meets to consider whether the US economy is strong enough to warrant an end to the near zero interest rate policy, perhaps as soon as Sep. The Conference Board index of consumer attitudes fell to 90.9 this month from a downwardly revised 99.8 in Jun, far short of a forecast reading of 100.0. The latest figure was the lowest since Sep 2014, while the decline was the steepest since Aug 2011. The report's jobs hard-to-get index rose to 26.7 from Jun's upwardly adjusted 26.1. Analysts said other indicators showed ongoing improvement in the housing & job sectors, which would allow the FOMC to consider normalizing interest rate from the emergency low level it adopted in Dec 2008 during the global financial crisis.
The share of Americans who own their homes fell to the lowest level in almost 5 decades, extending a multiyear decline as families struggle to regain ground lost during the financial crisis & rentals gain favor. The US homeownership rate was 63.4% in Q1, down from 63.7% in Q1, according to the Census Bureau, the lowest reading since 1967. Would-be homebuyers have been held back by stringent mortgage standards & wage growth that hasn’t kept up with surging home prices. The average household income in Jun was 4% below a record high set in early 2008, even as unemployment dropped to its pre-recession rate. Home values have jumped 34% since reaching a bottom in early 2012, making purchases more expensive for entry-level buyers. Demand for rentals is growing, fueling a surge in multifamily construction & sending leasing costs soaring. The number of renter-occupied units increased by about 2M in Q2 from a year earlier, the Census Bureau report showed. The rental vacancy rate fell to 6.8% from 7.1% in Q1 & 7.5% a year earlier, the lowest rate since the 1980s. The median asking rent was a record $803 a month.
United Parcel Service (UPS) reported earnings better than expected as all 3 of its main segments saw improved operating profit despite falling revenue. "The strong momentum in our international segment is expected to continue and gives us confidence in achieving the upper end of our guidance range," CEO David Abney said. The company affirmed its full-year guidance. For the Jun qtr, EPS rose to 1.35, up from 49¢ a year earlier. But revenue fell to $14.1B from $14.27B, partly because of foreign-exchange rates. The stock shot up 4.82. If you would like to learn more about UPS, click on this link:
club.ino.com/trend/analysis/stock/UPS?a_aid=CD3289&a_bid=6ae5b6f7
DuPont, a Dow stock, trimmed its earnings outlook for the year, as weak demand for crop protection & lower corn & soybean volumes weigh on its agricultural business. DD is now forecasting operating EPS of $3.90, down 10¢ from its previous forecast, which included its recently spun-off performance chemicals division. The maker of Pioneer corn seeds has been hit recently by the strengthening US dollar & low crop prices, as well as weakness in some chemical prices. It is rolling out new & better products to help combat the foreign-exchange challenges, while hastening already-planned cut costs. In Jan, the company boosted cost-cut targets & said it would reach its goal of slashing $1B in costs by the end of 2015, ahead of schedule, as it faced pressure from activist investor Trian Fund. In the latest qtr, cost cuts added 10¢ to operating EPS. In all, DD reported EPS of 1.03, down from 1.15 a year earlier. Excluding special items, operating EPS ticked up to $1.18 from $1.17 a year ago. Total revenue fell 12% to $8.88B. Analysts had expected EPS of $1.18 on revenue of $8.75B. The US dollar's strength against other currencies has made its seeds, crop sprays & chemical products more expensive for overseas buyers. Currency impacts brought down sales by 5% in the qtr. Agricultural sales fell 11% to $3.22B, while operating profit in the segment fell to $778M from $836M last year. DD earlier this month completed the spinoff of Chemours, previously DD's performance chemicals division that made paint pigments & nonstick coatings for frying pans. The company plans to purchase & retire $2B in stock by the end of the year. The stock fell 83¢. If you would like to learn more about DD, click on this link:
club.ino.com/trend/analysis/stock/DD?a_aid=CD3289&a_bid=6ae5b6f7
DuPont Trims Outlook on Agricultural Weakness
The rally today is suspicious. It was led by the rise in oil, & energy stocks roared ahead. MLPs also extended their recent recovery. However there was no special reason for the buying other than the markets were clearly oversold. The outlook for the Iranian deal is fuzzy & that would have a major influence on the oil market if it were allowed to ship more oil. The consumer confidence data was not encouraging. Earnings remain uneven & drab. Other foreign problems drag on, led by China & Greece. The chart below for Dow continues to look dreary.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLU15.NYM | ....Crude Oil Sep 15 | ....48.27 |  ...0.88 | (1.9%) |
US consumer confidence took its biggest tumble in 4 years in Jul on a less upbeat jobs outlook, while home appreciation in major cities stalled in May, suggesting a spring pause in housing demand. The disappointing data comes as the FOMC meets to consider whether the US economy is strong enough to warrant an end to the near zero interest rate policy, perhaps as soon as Sep. The Conference Board index of consumer attitudes fell to 90.9 this month from a downwardly revised 99.8 in Jun, far short of a forecast reading of 100.0. The latest figure was the lowest since Sep 2014, while the decline was the steepest since Aug 2011. The report's jobs hard-to-get index rose to 26.7 from Jun's upwardly adjusted 26.1. Analysts said other indicators showed ongoing improvement in the housing & job sectors, which would allow the FOMC to consider normalizing interest rate from the emergency low level it adopted in Dec 2008 during the global financial crisis.
U.S. consumer mood darkens, home price growth stalls
The share of Americans who own their homes fell to the lowest level in almost 5 decades, extending a multiyear decline as families struggle to regain ground lost during the financial crisis & rentals gain favor. The US homeownership rate was 63.4% in Q1, down from 63.7% in Q1, according to the Census Bureau, the lowest reading since 1967. Would-be homebuyers have been held back by stringent mortgage standards & wage growth that hasn’t kept up with surging home prices. The average household income in Jun was 4% below a record high set in early 2008, even as unemployment dropped to its pre-recession rate. Home values have jumped 34% since reaching a bottom in early 2012, making purchases more expensive for entry-level buyers. Demand for rentals is growing, fueling a surge in multifamily construction & sending leasing costs soaring. The number of renter-occupied units increased by about 2M in Q2 from a year earlier, the Census Bureau report showed. The rental vacancy rate fell to 6.8% from 7.1% in Q1 & 7.5% a year earlier, the lowest rate since the 1980s. The median asking rent was a record $803 a month.
U.S. Homeownership Rate Falls to the Lowest Level Since the 1960s
United Parcel Service (UPS) reported earnings better than expected as all 3 of its main segments saw improved operating profit despite falling revenue. "The strong momentum in our international segment is expected to continue and gives us confidence in achieving the upper end of our guidance range," CEO David Abney said. The company affirmed its full-year guidance. For the Jun qtr, EPS rose to 1.35, up from 49¢ a year earlier. But revenue fell to $14.1B from $14.27B, partly because of foreign-exchange rates. The stock shot up 4.82. If you would like to learn more about UPS, click on this link:
club.ino.com/trend/analysis/stock/UPS?a_aid=CD3289&a_bid=6ae5b6f7
UPS Posts Mixed Second-Quarter Results
United Parcel Service (UPS)
DuPont, a Dow stock, trimmed its earnings outlook for the year, as weak demand for crop protection & lower corn & soybean volumes weigh on its agricultural business. DD is now forecasting operating EPS of $3.90, down 10¢ from its previous forecast, which included its recently spun-off performance chemicals division. The maker of Pioneer corn seeds has been hit recently by the strengthening US dollar & low crop prices, as well as weakness in some chemical prices. It is rolling out new & better products to help combat the foreign-exchange challenges, while hastening already-planned cut costs. In Jan, the company boosted cost-cut targets & said it would reach its goal of slashing $1B in costs by the end of 2015, ahead of schedule, as it faced pressure from activist investor Trian Fund. In the latest qtr, cost cuts added 10¢ to operating EPS. In all, DD reported EPS of 1.03, down from 1.15 a year earlier. Excluding special items, operating EPS ticked up to $1.18 from $1.17 a year ago. Total revenue fell 12% to $8.88B. Analysts had expected EPS of $1.18 on revenue of $8.75B. The US dollar's strength against other currencies has made its seeds, crop sprays & chemical products more expensive for overseas buyers. Currency impacts brought down sales by 5% in the qtr. Agricultural sales fell 11% to $3.22B, while operating profit in the segment fell to $778M from $836M last year. DD earlier this month completed the spinoff of Chemours, previously DD's performance chemicals division that made paint pigments & nonstick coatings for frying pans. The company plans to purchase & retire $2B in stock by the end of the year. The stock fell 83¢. If you would like to learn more about DD, click on this link:
club.ino.com/trend/analysis/stock/DD?a_aid=CD3289&a_bid=6ae5b6f7
DuPont Trims Outlook on Agricultural Weakness
E.I. du Pont de Nemours (DD)
The rally today is suspicious. It was led by the rise in oil, & energy stocks roared ahead. MLPs also extended their recent recovery. However there was no special reason for the buying other than the markets were clearly oversold. The outlook for the Iranian deal is fuzzy & that would have a major influence on the oil market if it were allowed to ship more oil. The consumer confidence data was not encouraging. Earnings remain uneven & drab. Other foreign problems drag on, led by China & Greece. The chart below for Dow continues to look dreary.
Dow Jones Industrials
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