Dow dropped 71, decliners over advancers almost 2-1 & NAZ fell 16. The MLP index went up 2 to the 323s & the REIT index was off 2+ to 224. Junk bond funds were mixed & Treasuries were sold. Oil had a solid gain to the 46s & gold retreated.
Dow Jones Industrials
The US economy expanded at a slower pace in Q3 as companies took advantage of gains in consumer & business spending to reduce bloated stockpiles. GDP grew at a 1.5% annual rate, in line with the 1.6% forecast, according to the Commerce Dept. Excluding the biggest swing in inventories in 4 years, the pace of growth was 3% compared with 3.9% in Q2. Household purchases, buoyed by job & income gains, will probably continue to underpin the economy even as weaker demand from overseas customers holds back exports & manufacturing. The quick re-balancing of stockpiles to be more in line with domestic demand heading into the holiday season indicates factory production will soon stabilize, eliminating a source of weakness. The economy grew at a 2.3% pace in H1 as a 3.9% surge in Q2 more than made up for a Q1 slowdown caused by frigid weather, a labor dispute at West Coast ports & cutbacks in the energy industry. GDP expanded 2.4% in all of 2014. The Q3 growth estimate showed household purchases, which account for almost 70% of the economy, rose at a 3.2% annual pace compared with a 3.6% pace in the prior qtr. Personal consumption added 2.2 percentage points to growth. After-tax incomes adjusted for inflation climbed at a 3.5% annual rate, almost triple the 1.2% gain in the prior qtr. That allowed the saving rate to increase to 4.7% from 4.6%, indicating consumers have plenty of firepower to continue to drive growth.
Applications for unemployment benefits in the US were little changed last week, hovering close to 4-decade lows & showing steady progress in the labor market. Jobless claims increased 1K to 260K, less than the forecast, according to the Labor Dept. The 4-week average of applications dropped to the lowest level since 1973, while the number of Americans on benefit rolls shrank. Tight demand for labor is encouraging employers to retain workers even as slower sales to overseas customers cause some companies to slow the pace of hiring. The forecast called for 265K claims. The 4-week average, a less-volatile measure than the weekly figure, fell to 259K from 263K the week before. The number continuing to receive jobless benefits decreased 37K in the latest week to 2.14M, the fewest in 15 years & the unemployment rate among people eligible for benefits held at 1.6%.
Contract signings to purchase previously owned homes in the US unexpectedly fell in Sep by the most since the end of 2013, indicating the residential real estate market is cooling from its recent brisk pace. An index of pending home sales dropped 2.3% after a 1.4% decline a month earlier, the National Association of Realtors said. The decrease exceeded the most pessimistic forecast. A limited selection of properties may be dissuading some from trading up, while stricter credit standards are making it difficult for others to qualify for loans. At the same time, housing demand will probably be underpinned by cheap borrowing costs & employment opportunities. “There continues to be a dearth of available listings in the lower end of the market for first-time buyers," NAR chief economist Lawrence Yun said. Still, “with interest rates hovering around 4 percent, rents rising at a near eight-year high, and job growth holding strong -- albeit at a more modest pace than earlier this year -- the overall demand for buying should stay at a healthy level.” The forecast called for a 1%. Purchase contracts were up 2.5%in the 12 months ended in Sep on an unadjusted basis after a 6.6% gain in the year thru Aug. The pending sales index was 106.8 on a seasonally adjusted basis, the lowest since Jan. A reading of 100 corresponds to the average level of contract activity in 2001, or ”historically healthy” home-buying traffic, according to the NAR. Pending sales dropped in all 4 regions. 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. Home re-sales, which make up about 90% of the market, rose in Sep to the 2nd-highest level since 2007 & inventories decreased 2.6% from a month earlier.
Stocks gave up some of recent gains as the GDP data came in drab. This was to be expected. Supporting economic data has been inconsistent & uninspiring. However Dow remains up an astounding 1400 in Oct, one of its best months ever, with only meager economic data backing up the advance.
Dow Jones Industrials
Dow Jones Industrials
| CLZ15.NYM | ....Crude Oil Dec 15 | ...46.17 |  .....0.23 | (0.5%) |
| GCX15.CMX | ...Gold Nov 15 | .....1,152.70 | ...23.00 | (2.0%) |
The US economy expanded at a slower pace in Q3 as companies took advantage of gains in consumer & business spending to reduce bloated stockpiles. GDP grew at a 1.5% annual rate, in line with the 1.6% forecast, according to the Commerce Dept. Excluding the biggest swing in inventories in 4 years, the pace of growth was 3% compared with 3.9% in Q2. Household purchases, buoyed by job & income gains, will probably continue to underpin the economy even as weaker demand from overseas customers holds back exports & manufacturing. The quick re-balancing of stockpiles to be more in line with domestic demand heading into the holiday season indicates factory production will soon stabilize, eliminating a source of weakness. The economy grew at a 2.3% pace in H1 as a 3.9% surge in Q2 more than made up for a Q1 slowdown caused by frigid weather, a labor dispute at West Coast ports & cutbacks in the energy industry. GDP expanded 2.4% in all of 2014. The Q3 growth estimate showed household purchases, which account for almost 70% of the economy, rose at a 3.2% annual pace compared with a 3.6% pace in the prior qtr. Personal consumption added 2.2 percentage points to growth. After-tax incomes adjusted for inflation climbed at a 3.5% annual rate, almost triple the 1.2% gain in the prior qtr. That allowed the saving rate to increase to 4.7% from 4.6%, indicating consumers have plenty of firepower to continue to drive growth.
Economic Growth Cools as U.S. Companies Rein in Inventories
Applications for unemployment benefits in the US were little changed last week, hovering close to 4-decade lows & showing steady progress in the labor market. Jobless claims increased 1K to 260K, less than the forecast, according to the Labor Dept. The 4-week average of applications dropped to the lowest level since 1973, while the number of Americans on benefit rolls shrank. Tight demand for labor is encouraging employers to retain workers even as slower sales to overseas customers cause some companies to slow the pace of hiring. The forecast called for 265K claims. The 4-week average, a less-volatile measure than the weekly figure, fell to 259K from 263K the week before. The number continuing to receive jobless benefits decreased 37K in the latest week to 2.14M, the fewest in 15 years & the unemployment rate among people eligible for benefits held at 1.6%.
Jobless Claims in U.S. Were Little Changed Near Four-Decade Low
Contract signings to purchase previously owned homes in the US unexpectedly fell in Sep by the most since the end of 2013, indicating the residential real estate market is cooling from its recent brisk pace. An index of pending home sales dropped 2.3% after a 1.4% decline a month earlier, the National Association of Realtors said. The decrease exceeded the most pessimistic forecast. A limited selection of properties may be dissuading some from trading up, while stricter credit standards are making it difficult for others to qualify for loans. At the same time, housing demand will probably be underpinned by cheap borrowing costs & employment opportunities. “There continues to be a dearth of available listings in the lower end of the market for first-time buyers," NAR chief economist Lawrence Yun said. Still, “with interest rates hovering around 4 percent, rents rising at a near eight-year high, and job growth holding strong -- albeit at a more modest pace than earlier this year -- the overall demand for buying should stay at a healthy level.” The forecast called for a 1%. Purchase contracts were up 2.5%in the 12 months ended in Sep on an unadjusted basis after a 6.6% gain in the year thru Aug. The pending sales index was 106.8 on a seasonally adjusted basis, the lowest since Jan. A reading of 100 corresponds to the average level of contract activity in 2001, or ”historically healthy” home-buying traffic, according to the NAR. Pending sales dropped in all 4 regions. 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. Home re-sales, which make up about 90% of the market, rose in Sep to the 2nd-highest level since 2007 & inventories decreased 2.6% from a month earlier.
Pending Sales of Previously Owned U.S. Homes Unexpectedly Fall
Stocks gave up some of recent gains as the GDP data came in drab. This was to be expected. Supporting economic data has been inconsistent & uninspiring. However Dow remains up an astounding 1400 in Oct, one of its best months ever, with only meager economic data backing up the advance.
Dow Jones Industrials
No comments:
Post a Comment