Thursday, February 9, 2017

Markets jump to record highs on jobs data

Dow vaulted 135 to another record, advancers over decliners better than 2-1 & NAZ gained 35.  The MLP index added 2+ to the 334s & the REIT index was flat in the 342s.  Junk bond funds hardly budged in price & Treasuries were weak as stocks went up.  Oil rose back to the 53s & gold slid lower after recent buying.

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Applications for unemployment benefits in the US unexpectedly declined last week to an almost 3-month low, echoing a vibrant job market.  Jobless claims fell 12K to 234K, a report from the Labor Dept showed.  The forecast called for 249K.  The average number of applications filed over the past 4 weeks reached the lowest point since 1973.  The latest results extend a trend of historically low claims, with applications staying below 300K in the longest streak since 1970.  A shortage of skilled workers is prompting companies to hold on to existing employees while continuing to add more workers to help fulfill demand.  The 4-week moving average decreased to 244K from 248K.  The latest tally marks 101 straight weeks of claims below 300K, the level consistent with a healthy labor market.  The 161-week period that ended in 1970 was the longest such streak in records.  The number continuing to receive jobless benefits rose 15K to 2.08M & the unemployment rate among people eligible for benefits held at 1.5%.

U.S. Jobless Claims Unexpectedly Fall to Lowest Since November

Home price gains accelerated in Q4, with increases reported in 89% of US metropolitan areas, as competition heated up for a record-low supply of listings, the National Association of Realtors said.  The median price of an existing single-family home rose from a year earlier in 158 of the 178 areas measured.  31 regions had gains of 10% of more in Q4, up from 25 in Q3.  Job growth is fueling demand in a market starving for listings.  The number of previously owned homes available for sale at the end of December dropped 6.3% from a year earlier to 1.65M, the fewest since the Realtors group started tracking the data in 1999.  It would take 3.9 months to sell those homes, down from 4.6 months a year earlier.  “Buyer interest stayed elevated in most areas thanks to mortgage rates under 4 percent for most of the year and the creation of 1.7 million new jobs edging the job market closer to full employment,” Lawrence Yun, the group's chief economist, said.  “At the same time, the inability for supply to catch up with this demand drove prices higher and continued to put an affordability squeeze on those trying to reach the market.”  In Q4, the national median single-family home price was $235K, up 5.7% from a year earlier.

U.S. Jobless Claims Unexpectedly Fall to Lowest Since November

Oil prices rose, supported by an unexpected draw in US gasoline inventories, although bloated crude supplies meant that fuel markets remain under pressure.  US light crude was 60¢ higher at $52.94 a barrel.  The US Energy Information Administration (EIA) said gasoline inventories fell 869K barrels last week to 256M barrels, versus analyst expectations for a 1.1M-barrel gain.  The fall in gasoline stocks suggested US consumption was stronger than expected & may be healthy enough to support prices at time when most fuel oil markets are very well stocked.  High oil inventories have been undermining efforts by OPEC & other producers including Russia to tighten the market by cutting production.  OPEC & other big exporters have agreed to trim output by almost 1.8M bpd during H1 in order to prop up prices & rebalance the market.

Oil up on U.S. Gasoline Stocks, but Market Bloated

Stocks are having another good day.  The Dow is up almost a whopping 2K since the election 3 months ago.  Trump has had a bumpy time of it & congress is a mess which shows no sign of changing soon.  But Trump's actions are well received by investors.  Gold is a little lower today after showing surprising strength recently at the same time stocks have been rising.  That is a disconnect which will not last.

Dow Jones Industrials


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