Wednesday, April 20, 2016

Markets fluctuate on earnings and oil

Dow crawled up 4, advancers barely ahead of decliners & NAZ added 6.  The MLP index went 1 to go over 290 & the REIT index fell back 2+ to the 339s.  Junk bond funds edged higher & Treasuries had a slight gain.  Oil pulled back (see below) & gold was flattish.

AMJ (Alerian MLP Index tracking fund)

CL.NYM....Light Sweet Crude Oil Futures,M...39.99 Down ...1.09  (2.7%)

GC.CMX...Gold Futures,Apr-2016.............1,252.10 Down ....0.90  (0.1%)

China's stocks sank the most in almost 2 months, pushing a gauge of volatility up from its lowest level this year as turnover surged.  The Shanghai Composite Index dropped 4.5% before paring declines to 2.3%.  Industrial & technology companies led losses, while 13 stocks fell for each that rose.  The Hang Seng China Enterprises Index retreated from a 3-month high in Hong Kong.  Traders struggled to explain the reason.  Interest in mainland equities has been fading this month after the Mar 12% surge amid concern that improving economic data will prevent the gov from adding stimulus.

The Shanghai Composite closed at 2972, falling below the key 3K level for the first time since Apr 8, & taking its loss this year to 16%.  The ChiNext index for small caps plunged 5.6% & the Hang Seng China Enterprises slid 1.2%, while the Hang Seng Index dropped 0.9%.  China's central bank is signaling less of an appetite for adding monetary stimulus following evidence of an acceleration in growth.  The People's Bank of China said that future policy operations, while observing the need to continue supporting growth, will also pay attention to heading off macroeconomic risks, especially an over-expansion of corp leverage.

Purchases of previously owned US homes rose more than projected in Mar, indicating resilience in demand heading into the spring selling season.  Contract closings climbed 5.1% to a 5.33M annualized rate from Feb's 5.07M, figures from the National Association of Realtors.  The forecast called for a rise to 5.28M.  Prices rose as inventories remained tight.  The report underscores the role that strong hiring & low borrowing costs are playing in supporting housing at a time the economy is restrained by fragile manufacturing & weak global markets.  Faster wage growth & more participation from first-time homebuyers would help usher further gains in sales.  Compared with a year earlier, existing-house purchases increased 1.5% in seasonally-adjusted data.  The median price of an existing home rose 5.7% from Mar 2015 to reach $222K.  While rising property values allow homeowners to feel wealthier & make it easier for them to sell their dwellings, the price gains limit affordability for prospective buyers.  There were 1.98M houses on the market at the end of Mar, down 1.5% from the same month last year.  At the current sales pace, it would take 4.5 months to sell those houses compared with 4.4 months at the end of the prior month.  Less than a 5 month supply is considered a tight market.  The median time a home was on the market decreased to 47 days from 52 days a year earlier.  Sales of existing single-family homes increased 5.5% to an annual rate of 4.76M.  Purchases of multifamily properties climbed 1.8% to a 570K pace.  First-time buyers accounted for 30% of all purchases, which remains a historically low share.

Purchases of U.S. Previously Owned Homes Rebounded in March

Markets continue to be quiet, awaiting earnings reports while oil keeps bobbing around 40 after its recent run.

Dow Jones Industrials

stock chart


No comments: