Wednesday, November 25, 2015

Markets crawl higher ahead of the holiday

Dow edged up all of 1, advancers over decliners over decliners 3-2 & NAZ were up 13.  The MLP index was fractionally higher to the 302s & the REIT index added 1+ to the 321s.  Junk bond funds did not do much & Treasuries rose.  Oil inched higher & gold retreated.

AMJ (Alerian MLP Index tracking fund)





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CLF16.NYM....Crude Oil Jan 16....42.65 Down ...0.22  (0.5%)

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While US consumers are more optimistic about the outlook for the economy & their personal finances than they were in the aftermath of the housing bust, their confidence doesn't measure up to previous cyclical peaks:

Bloomberg
The Nov final reading of the Univ of Mich index of sentiment came in at 91.3, a slight gain from the Oct level, but fell relative to the initial report for the month.  The director of the survey, Richard Curtin said this relatively subdued confidence & high savings rate reflect the notion that future generations might not see an increase in their standard of living:  Retailers will face headwinds based on consumers' demands that purchases of durable goods would be contingent upon price discounts.  "In only nine surveys in our long history, and this goes back more than a half a century, have more consumers mentioned their insistence on price discounts than in this current survey," added Curtin.  As such, the holiday shopping season won't be terrible, according to the professor, but retailers will have to deal with more margin compression than they may have anticipated.

UMich Survey Director: We're Witnessing the Decline of American Economic Aspirations


New US single-family home sales surged in Oct & the inventory of properties for sale was the highest since early 2010, which could allay concerns of a significant slowdown in housing.  The Commerce Dept said sales increased 10.7% to a seasonally adjusted annual rate of 495K units.  The Sep sales pace was revised down to 447K units from the previously reported 468K units.  Economists had forecast new home sales, which account for about 8% of the housing market, rebounding to a rate of 500K units.  Sales were up 4.9% compared to Oct of last year.  Though new home sales tend to be volatile month-to-month because they are drawn from a small sample, this bounce back should offer some assurance that the housing market remains on solid ground despite declines last month in home resales, housing starts & confidence among builders.  New home sales vaulted a record 135.3% in the Northeast to their highest level since Jan 2010.  Sales rose 8.9% in the populous South & were up 5.3% in the Midwest.  They fell 0.9% in the West.  The inventory of new homes on the market increased 1.3% to 226K, the highest since Mar 2010.  Supply still remains less than half of what it was at the height of the housing boom.  At the Oct sales pace it would take 5.5 months to clear the supply of houses on the market, down from 6.0 months in Sep.  The median price of a new home fell 6.0% from a year ago to $281K.

New Home Sales Get a Boost in October


Presi Obama said there is no specific or credible intelligence indicating a plot against US targets.  In a brief statement after meeting his national-security team, Obama said Americans should go about their normal Thanksgiving holiday activities but also urged vigilance.  "If you see something suspicious, say something," he said.  He added the US & other nations are stepping up the pressure on ISIS in the wake of the deadly attacks in Paris on Nov 13.

Obama Says No Specific Evidence Of Plot Against U.S.


On this semi holiday, volume was light & price movements were generally small. Tomorrow begins the important holiday season for retailers & the overall US economy.  With so many warnings around, there is a fair amount of worry about the strength of retail sales.  Markets will close early on Fri & little is expected with even more traders on holiday (assuming there is no terrorist strike).

Dow Jones Industrials










 

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