Higher markets on continued hopes for meeting on oil production cuts

Dow climbed 125 (off the highs), advancers over decliners 2-1 & NAZ gained 38.  The MLP index rose 10+ to the 252s & the REIT index slid back 2+ to the 306s.  Junk bond funds were bid higher & Treasuries advanced, taking the yield on the 10 Treasury below 2%.  Oil AM gains were pared in late day trading & gold was essentially even (still well above 1100).

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CLH16.NYM

...Crude Oil Mar 16

....33.33

...1.03

(3.2%)

OPEC delegates said they have no meeting planned with Russia after the country's Energy Minister Alexander Novak indicated he was willing to meet with the group next month to coordinate oil-output policy.  4 OPEC representatives said they hadn’t heard of any plan for talks.  One Gulf member said de facto leader Saudi Arabia had no proposal to trim production by 5%, after a country had suggested such a cut at previous OPEC meetings (citing Novak).  The minister said Russia would be willing to discuss output with OPEC.  Until this week, Russia, which relies on energy for more than 40% of its budget revenue, had repeatedly stated its goal of keeping crude production stable even as prices tumble.  Still, this month's price slump to a 12-year low has put the country under increasing financial pressure.  The Finance Ministry says the nation's budget deficit, already at a 5-year high in 2015, may widen this year as the rout deepens.  There are significant obstacles in the way of an agreement with the OPEC.  Saudi Arabia wants to defend market share & Russia's inability to cut production in winter months makes coordination difficult.  Russia's oil output is set to reach a post-Soviet record of 10.89M barrels a day in Jan.

The 2 countries' opposing views on Syria, where Russia is pres Al-Assad's closest ally & Saudi Arabia seeks his removal, present another diplomatic obstacle.  The state energy producer Saudi Arabian Oil, signaled last week that the kingdom would persist with its policy of maintaining production.  Global oil markets are in the process of re-balancing & a price recovery is “inevitable,” he said.  OPEC's next scheduled meeting is in Jun.  With the organization effectively abandoning its output ceiling in Dec, Russia pumping at record levels & US shale fields proving more resilient than forecast, the global surplus has continued to swell & prices have continued to fall.

• OPEC States Say No Meeting Planned as Russia Floats Talks

The U.S. Census Bureau reported home ownership at 63.7% in Q4.  That puts homeownership rates near the lowest they've been since the 1990s.  Although there has been a slight uptick from the previous 2 qtrs, homeownership are well below where they were in 2004, when they were as high as 69.4%.  Rates have been steadily declining nationwide since before the last recession.

Source: US Census Bureau

Ownership rates remain highest in the Midwest & lowest in the West.  Meanwhile, Millennials continue to shy away from buying homes.  A decade ago, 43% of people 18-35 years old were homeowners.  Today, it’s below 35%.  But the decline isn't just because of Millennials.  All age groups have seen a falloff in homeownership in the past 10 years.  In 2005, 69.7% of those 35-44 years old owned a home.  In 2015, it was 59.3%.  However, it also means the demand for rentals is on the rise.  Median asking home prices are back to where they were 10 years ago but median rents are up 43% in that time.

Homeownership remains near multi-decade lows

Apple, a Dow stock, acquired education-technology startup LearnSprout, which creates software for schools & teachers to track students’ performance.  AAPL is working on education tools for the iPad, which will allow students to see interactive lessons, track their progress, & share tablet computers with peers.  "Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans," a company spokesman said.  More than 2½K school districts in 42 US states use LearnSprout software.  The startup has raised more than $4M from investors.  LearnSprout competes with Clever, which has raised more than $40M from investors.  The stock was fractionally higher.  If you would like to learn more about AAPL, click on this link:
club.ino.com/trend/analysis/stock/AAPL?a_aid=CD3289&a_bid=6ae5b6f7

Apple Acquires Education-Tech Startup LearnSprout

Rising stock prices today are a mystery other than bargain hunting after yesterday's decline.  Saudi Arabia is not going to cut production & most other OPEC are pumping all the oil they can to limit the decline in revenue.  Then there's Iran which is already doing a lot of business with European countries.  Earnings have been nothing to write home about.  The high yield sector has done well this week, probably from bargain hunting after so much selling.  Dow finished above 16K, but still has a substantial decline in Jan which is a solid negative sign for the rest of the year.

Dow Jones Industrials