Markets climb higher on hopes for a delay in an interest rate hike

Dow rose 79, advancers over decliners 3-1 & NAZ gained 50.  The MLP index added 1 to 311 & the REIT index went up 2 to the 343s.  Junk bond funds inched higher & Treasuries were a tad lower.  Oil slid back under 50 after going higher in early trading (see below) & gold was a little higher.

AMJ (Alerian MLP Index tracking fund)

CL=F

Light Sweet Crude Oil Futures,D

50.48

0.11

0.2%

GC=F

Gold Dec 16

1,258.40

1.80

0.1%

Start Using the Leverage of Options and the Power of MarketClub Today!

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

Oil rose as the $ weakened, edging back above $50 where prices are hovering following OPEC's decision to cut output last month.  West Texas Intermediate futures advanced 0.7% after slipping 0.8% yesterday.  The $ sank on speculation that a pick-up in the global inflation outlook won't tempt the US to quicken monetary tightening.  A weaker $ increases the appeal of commodities priced in the currency.  A survey showed US crude inventories probably rose last week.

Oil is up about 13% since OPEC reached a deal Sep 28 to manage supply & prices have closed above $50 for 6 of the last 8 sessions as investors await a November meeting where the group is due to implement the agreement.

• Oil Tops $50 as Weak Dollar Adds Further Boost After OPEC Accord 

The cost of living in the US rose at the fastest pace in 5 months on energy & shelter prices, a sign inflation is getting closer to the Fed goal.  The consumer-price index increased 0.3% in Sep from the previous month, matching the forecast, after a 0.2% gain in Aug, according to the Labor Dept.  The year-on-year rise was 1.5%, the most since Oct 2014.  Excluding volatile food & fuel costs, prices were up 0.1%.

Prices have shown a gradual pickup as housing costs continue to climb & the drop in energy prices abates.  The data, along with a still-strong labor market, may keep policy makers on course for a qtr-point interest-rate increase in Dec after holding off on hikes so far this year.  At a year-over-year rate, core prices rose 2.2% in Sep after climbing 2.3% the prior month.  Energy costs increased 2.9% after being little changed a month earlier.  Food costs were little changed.  The advance in the core index was bolstered by prices for housing & airfare, while costs of apparel & automobiles declined.  Health-care costs were little changed. 

• Consumer Prices in U.S. Rise at Fastest Pace in Five Months

Confidence among US homebuilders cooled in Oct from an 11-month high, reflecting a pause in the market for single-family houses, according to the National Association of Home Builders/Wells Fargo.  Builder sentiment gauge dropped to 63 (matching forecast) from the prior month’s 65 that was the highest since Oct 2015 (readings greater than 50 mean more respondents reported good market conditions).  Index of prospective buyer traffic fell to 46 from 47. Measure of 6-month sales outlook rose to 72, the highest in a year, from 71.  Gauge of current sales decreased to 69 from an almost 11-year high of 71.  Developers’ sentiment may have been restrained by factors including the limited availability of ready-for-building lots & skilled workers.  At the same time, mortgage rates still close to historically low levels & a healthy job market will help keep the housing rebound on track.  The report “represents a mild pullback from a jump in September,” NAHB Chief Economist Robert Dietz said.  “The housing market continues to make slow and steady gains.”

Confidence Among Homebuilders in U.S. Falls From 11-Month High

Early earnings reports have been favorable, so some investors are buying.  Dow continues to trade in a narrow range, just above 18K where it has been for months.  It will take a lot of good reports for it reach a new record in an economy which is sputtering along with only 2% annual growth.

Dow Jones Industrials