Thursday, March 16, 2017

Markets rise after Fed gives dovish rate hike guidance

Dow went up 45, advancers over decliners 4-3 & NAZ added 9.  The MLP index lost 1 to the 319s & the REIT index added 1+ to the 341.  Junk bond funds were off slightly & Treasuries were a little lower.  Oil slid lower after yesterday's advance & gold leaped 26 to a one week high at 1227.

AMJ (Alerian MLP Index tracking fund)

Light Sweet Crude Oil Futures,A

Gold Apr 17

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US homebuilding jumped in Feb as unseasonably warm weather boosted the construction of single-family houses to near a 9½ year high, suggesting the economy remained on solid ground despite an apparent slowdown in growth in Q1.  Housing starts increased 3.0% to a seasonally adjusted annual rate of 1.29M units, the Commerce Dept said.  Economists had forecast groundbreaking activity rising to a rate of 1.26M.  Homebuilding was up 6.2% compared to Feb 2016.  Single-family homebuilding, which accounts for the largest share of the residential housing market, surged 6.5% to a pace of 872K units last month, the highest level since Oct 2007.  Starts for the volatile multi-family housing segment fell 3.7% to a pace of 416K units.  A robust labor market is supporting the housing market, helping it to buck weakness in other parts of the economy.  Consumer, construction & business spending softened in Jan while the trade deficit widened to a 5-year high.  In Feb, permits for future home construction fell 6.2% to a rate of 1.21M units.  But single-family permits increased 3.1% to a pace of 832K units.  Building permits for multi-family units dropped 21.6% to a rate of 381K units.  Single-family permits are likely to remain high.  A survey showed homebuilder confidence jumped in Mar to its highest level in 12 years.

Warm Weather Boosts Housing Starts, Permits Fall

The Philadelphia Federal Reserve gauge of regional manufacturing activity rose more than expected in Mar to a reading of 17.5 from 11.1 in Feb.  The new orders component was up to 38.6 from 38 last month, while prices paid jumped to 40.7 from 29.9 & employment rose to 17.5 from 11.1.

Philadelphia Fed's Factory Gauge Jumps in March

The number of Americans applying for unemployment benefits fell last week & continued to hover at a low level consistent with a healthy labor market.  Initial jobless claims, a proxy for layoffs across the economy, declined 2K to a seasonally adjusted 241K, the Labor Dept said.  The decrease matched expectations.  Jobless claims have remained below 300K for 106 consecutive weeks, the longest such streak since 1970, when the workforce & population were far smaller than they are today.  Claims in the week ended Feb 25 were 223K, the lowest weekly level since 1973.  Data on unemployment applications can be volatile from week to week.  A more stable measure, the 4-week moving average of initial claims, barely rose last week at 237K.  Continuing unemployment claims, reflecting benefits drawn by workers for longer than a week, fell 30K to 2.03M.

Weekly Jobless Claims Fell Last Week to 241K

Stocks are taking it easy today.  Getting little attention are the goings on in DC.  The Treasury has pretty much out of money while the future of Obamacare is weighing on all lawmakers.  The bullish outlook for oil is in trouble.  However traders are optimistic as they push the Dow close to 21K.  Janet's words yesterday are calming for the stock market.

Dow Jones Industrials

stock chart  


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