Monday, August 17, 2015

Markets rise on home builder confidence

Dow climbed 67, advancers over decliners 4-3 & NAZ rose 43.  The MLP index jumped up 5+ to the 567s & the REIT index added 2+ to the 325s.  Junk bond funds were lower & Treasuries advanced along with stocks.  Oil sank back to the 42s (flirting with 6½ year lows) & gold went up again.

AMJ (Alerian MLP Index tracking fund)

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CLV15.NYM....Crude Oil Oct 15....42.67 Down ...0.44  (1.0%)

Live 24 hours gold chart [Kitco Inc.]

Homebuilders’ confidence in the US climbed in Aug to the highest level in almost a decade, while manufacturing in one region slumped.  The National Association of Home Builders/Wells Fargo sentiment gauge (NAHB)  rose to 61, the highest since Nov 2005, from 60 the prior 2 months.  Readings greater than 50 mean more respondents report good market conditions.  The Federal Reserve Bank of New York’s Empire State factory index plunged to minus 14.9 in August, the lowest level since 2009.  A strong job market & historically low mortgage rates will probably keep boosting demand for residential real estate, ensuring home building will contribute to economic growth.  Gains in construction will be needed to help make up for any slowdown in manufacturing as factories contend with a strong dollar & bloated inventories.  The builders’ index showed measures of current single-family home sales & prospective buyer traffic advanced.  “Today’s report is consistent with our forecast for a gradual strengthening of the single-family housing sector in 2015,” the NAHB said.  “Job and economic gains should keep the market moving forward at a modest pace throughout the rest of the year.”  The measure of the 6-month sales outlook held at an almost 10-year high.  Builder confidence climbed in 3 regions, with only the Northeast suffering a setback.

Homebuilders in U.S. Gain Confidence as New York Factories Slump

IBM, a Dow stock, is introducing 2 mainframe servers that run only on the open-source Linux operating system.  The new hardware will make it easier to run technology like the MongoDB database & the open-source software Spark, IBM said.  Spark is a free information-storing framework that IBM has said it is spending "hundreds of millions" to develop.  The mainframe is one of its signature hardware products that will help sell related software & services. Presently more than 1/3 of IBM mainframe clients are running the Linux operating system, Tom Rosamilia, senior VP of IBM Systems, said.  The company has relied on sales of the mainframe to boost hardware revenue, which fell 32% in Q2, (5% gain when excluding the impact from divestitures & currency exchange).  IBM also said it will release mainframe code to the public & join a new cohort of less than a dozen academic, gov & corp entities in what’s called the Open Mainframe Project.  The stock went up 56¢.  If you would like to learn more about IBM, click on this link:

IBM Introduces Two Open-Source-Only Mainframes in Hardware Push

International Business Machines (IBM)

Two units of Citigroup will pay nearly $180M to settle financial crisis-era charges alleging they defrauded investors in 2 hedge funds by telling them the funds were safe, low-risk investments, US regulators said.  The SEC said that Citigroup Global Markets & Citigroup Alternative Investments are settling without admitting or denying the charges, & that the funds will bear all of the costs for distributing the money to harmed investors.  The SEC said that the bank's 2 units made "false and misleading" statements to investors in both the ASTA/MAT fund & the Falcon fund, which collectively raised nearly $3B in capital before collapsing.  The stock gained 18¢.  If you would like to learn more about Citi, click on this link:

Citi to Pay $180M to Settle Fraud Charges

Citigroup (C)

Very little happened in the markets, but they went up a little anyway.  Even though oil prices had another bad day, the MLPs finally found buyers.  China data is not giving the bulls much to cheer much about.  The there is the Fed meeting next month.  Everybody is playing the waiting game & trying to guess whether the interest rate will get the first increase in years (what seems like forever for many).  Dow remains down almost 300 YTD as almost 2/3 of the year is over.

Dow Jones Industrials


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