Tuesday, December 27, 2016

Markets crawl higher on consumer confidence data

Dow rose 11, not good enough to go over 20K, advancers over decliners better than 3-2 & NAZ went up 24.  The MLP index was up chump change in the 317s & the REIT index was fractionally higher in the 335s.  Junk bond funds were mixed & Treasuries slid lower.  Oil climbed in the 53s (more below) & gold had a modest gain.

AMJ (Alerian MLP Index tracking fund)

3 Stocks You Should Own Right Now - Click Here!

Live 24 hours gold chart [Kitco Inc.]

Consumer confidence climbed in Dec to the highest level since 2001 as Americans were more upbeat about the outlook than at any time in the last 13 years, according to the Conference Board.  Confidence index increased to 113.7 (forecast was 109) from a revised 109.4 in Nov & a measure of consumer expectations for the next 6 months rose to 105.5, the highest since 2003, from 94.4. Present conditions index fell to 126.1 from 132.  The share of Americans expecting better business conditions 6 months from now rose to 23.6%, the highest since 2011, from 16.4%.  American households are expecting a Donald Trump administration to deliver.  They are more upbeat about the prospects for the economy, labor market & their incomes.  The results corroborate surveys by the Univ of Mich & the National Federation of Independent Business, which showed jumps in household & business sentiment on Trump's pledges to boost jobs, cut taxes & ease regulations.  “The post-election surge in optimism for the economy, jobs and income prospects, as well as for stock prices which reached a 13-year high, was most pronounced among older consumers,” the Conference Board said.  “Looking ahead to 2017, consumers' continued optimism will depend on whether or not their expectations are realized.”  The share of those who said they see more job availability 6 months from now rose to 21%, the highest since 2011, from 16.1%.  The share of respondents who expected their incomes to rise in the next 6 months rose to 21% from 17.4%

U.S. Consumer Confidence Jumps to Highest Level Since 2001

Home prices in 20 US cities maintained a steady pace of increases in Oct while a gauge of nationwide property values rose by the most since mid-2014, according to S&P CoreLogic Case-Shiller data.  20-city property values index rose 5.1% from Oct 2015 (forecast was 5%) after a 5% gain in the year thru Sep.  National home-price gauge increased 5.6% from 12 months earlier, the biggest gain since Jul 2014, to a record 185.06; the measure first exceeded the 2006 pre-recession peak in Sep. On a monthly basis, the seasonally adjusted 20-city index increased 0.6% (forecast was 0.5%) from prior month after a 0.5% gain.  Lean housing inventory has continued to put upward pressure on home values at the same time steady hiring has lifted demand, resulting in two years of steady gains in property prices of around 5%.  A post-election spike in borrowing costs could reduce housing affordability until home-price appreciation slows.  The prospects of faster income growth in a tight job market may also make higher interest rates easier to manage.  “Home prices and the economy are both enjoying robust numbers,” David Blitzer, chairman of the S&P index committee, said.  “However, mortgage interest rates rose in November and are expected to rise further as home prices continue to outpace gains in wages and personal income.”  “Affordability measures based on median incomes, home prices and mortgage rates show declines of 20-30 percent since home prices bottomed in 2012. With the current high consumer confidence numbers and low unemployment rate, affordability trends do not suggest an immediate reversal in home price trends,” he added.  All 20 cities in the index showed a year-over-year gain

Home Prices in 20 U.S. Cities Increased 5.1% in October

Oil jumped 1.7%, continuing its year-end rally with support from expectations of tighter supply once the first output cut deal between OPEC & non-OPEC producers in 15 years takes effect on Sun.  US crude prices have surged 25% since mid-Nov, helped by expectations for OPEC's supply cut & generally solid US economic figures that have also bolstered equity prices.  But trading was thin.  With oil near $54 a barrel, US crude futures are not far from the year's high of $54.51 high reached on Dec 12.  Jan 1 is the official start of the deal agreed by OPEC & several non-OPEC producers to lower production by almost 1.8M barrels per day (bpd).  US crude was up 90¢ (1.7%) to $53.92 a barrel.  The members of an OPEC & non-OPEC committee formed to monitor the market may meet on Jan 13 which may give an early indication of compliance with the deal.  Russian oil producer Gazprom Neft said it planned to increase oil production by 4.5-5% next year, less than intended before Russia joined the supply cut deal.

Oil Jumps 1.7%, Adds to Year's Gains Ahead of OPEC Cuts

Stocks had an up day, but it wasn't  good enough to take the Dow over 20K.  Maybe tomorrow.  Economic data is helpful but it is still unclear if recent data will continue to rise when the guys in DC return next week & start working on Trump's proposals.  Swings in stock prices mean little this week because of light volume.

Dow Jones Industrials

No comments: