Thursday, June 23, 2016

Markets rise as polls show Britain will stay in the EU

Dow gained 129, advancers over decliners a big 5-1 & NAZ gained 37.  The MLP index went up 1+ to the 317s & the REIT index added 1+ to 351, closing in on its record high.  Junk bond funds rose & Treasuries retreated.  Oil joined in the rally for commodities while safe haven gold pulled back.

AMJ (Alerian MLP Index tracking fund)


CLQ16.NYM

Light Sweet Crude Oil Futures,A...49.80 Up ...0.67 (1.4%)

GCM16.CMX

Gold Futures,Jun-2016.............1,263.60 Down ...4.40  (0.4%)








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Stocks gained & the £ strengthened to its highest level this year as the last 2 polls showed a lead for the campaign to keep Britain in the EU.  Euro shares rose to the highest level in more than 2 weeks in above-average trading with voting underway in the UK's referendum.  The S&P 500 climbed within 1½% of its all-time high.  Gold & the ¥ declined, while perceived corp credit risk fell for a 5th day.  In 2 opinion polls conducted Jun 21-22, the “Remain” camp was shown to be in front.



Stocks Jump After Release of EU Referendum Polls

Fewer Americans than forecast filed for unemployment benefits last week, adding to evidence that the labor market is healthy & stable.  Jobless claims dropped by 18K to 259K, according to the Labor Dept.  It was the biggest decrease since the early Feb.  The forecast called for a decline to 270K.

Hiring managers are finding little reason to pare staff amid a dwindling pool of available workers.  Sustained low levels of jobless claims have helped to reassure the Federal Reserve that the recent slowdown in payroll gains will dissipate.  Filings have been below 300K for 68 straight weeks, the longest stretch since 1973, & a level consistent with a healthy labor market.  The 4-week average of claims, a less-volatile measure than the weekly figure, fell to 267K from 269K in the prior week.  Last week included the 12th of the month, which coincides with the period the Labor Dept surveys employers to calculate monthly payroll data.  The average is lower than the 278K during the comparable period in May.  The number continuing to receive jobless benefits decreased 20K to 2.14M & the unemployment rate among people eligible for benefits held at 1.6%.

Jobless Claims in U.S. Declined More Than Forecast Last Week


Purchases of new homes declined in May from an 8-year high as the housing market continued to display the choppy progress that’s been a hallmark of the recovery.  Sales fell 6% to a 551K annualized pace following a 586K rate in Apr that was slower than previously estimated, from the Commerce Dept.  The estimate was for a 560K.  While the report showed demand retrenched last month, the volatile data are showing gradual improvement on the back of steady job gains & low mortgage rates.  Stronger wage growth & a greater availability of cheaper properties would help lure more first-time buyers & provide an additional push for the housing recovery.  Because new-home sales figures for the 3 previous months were revised lower, the May data should also be considered preliminary.  Over the last 3 months, purchases have averaged a 553K pace, the best in 8 years.

New-home purchases were 8.6% higher in May from a year earlier on an unadjusted basis.  201K homes sold in May weren't yet started by builders, the most since Jun 2007, indicating construction starts may firm up in the months ahead, & help drive economic growth.  Purchases fell in 3 of 4 regions, led by a 33.3% decrease in the Northeast (the smallest market for new homes).  The supply of homes at the current sales rate increased to 5.3 months from 4.9 months in Apr.  There were 244K new houses on the market at the end of last month, up from 241K & the most since Sep 2009.  The median price of a new home increased 1% last month from a year ago to $290K.

Sales of New Homes in U.S. Declined in May From Eight-Year High


Stocks are in rally mode as indications are that Britain will remain in the EU.  When that matter is settled, markets will watch fundamentals.  This week oil has bounced back from recent selling, but it continues to be highly volatile.

Dow Jones Industrials

 

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