Tuesday, March 21, 2017

The worst day this year for stocks on worries about repealing OmbamaCare

Dow gave back 237 closing near the lows, decliners over advancers 3-1 & NAZ sank 107.  The MLP index was off 3 to the 314s & the REIT index lost 1+ to 340.  Junk bond funds were lower & Treasuries rallied as  stocks were being sold.  Oil fell to the 47s & gold added 10 to 1244 (more on both below)

AMJ (Alerian MLP Index tracking fund)

Live 24 hours gold chart [Kitco Inc.]

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Stocks fell the most since Jan, the $ extended its retreat to the longest since Nov & crude slumped thru $48 a barrel as investors assessed the prospects for Trump's pro-growth policies gaining Congressional approval.  Treasuries climbed with gold.  The stock market was down for a 4th straight loss, with banks leading the way as a drop in 10-year Treasury yields damped the prospects for higher lending revenue.  Industrial & technology shares slumped as House Reps warned failure to pass a health-care bill could imperil tax & spending reforms.  Oil resumed a slide as US crude stockpiles are forecast to increase.  The € strengthened amid easing concern that a populist will prevail in France's election.  Trump met with House Reps to rally support for the repeal of Obamacare as investors look for signs that his plans to cut corp taxes & boost spending will move forward.

U.S. Stocks Tumble, Dow Slides Over 200 Points

Gold futures tallied a 4th straight session climb, with $-denominated prices for the metal buoyed by a drop in the $ Index to its lowest level in about 7 weeks.  Euro-dollar gained after France's first televised presidential debate left pro-euro candidate Emmanuel Macron on solid footing, according to polls, while the £ gained ahead of the launch of the UK's exit from the EU.  Apr gold rose $12.50 (1%) to settle at $1246 an ounce (& up from sub $1200 last week).

Gold Prices Mark Fourth Straight Session Climb

Oil prices fell close to its lowest in a week as the market discounted the latest talk by OPEC that it would extend output cuts beyond Jun.  That decline also came ahead of the release of weekly US crude inventory data later & tomorrow that is expected to show a crude stock build of 2.6M barrels.  West Texas Intermediate crude was down 68¢ (1.4%) at $47.54 per barrel on the last day the Apr contract is the front-month, its lowest level since Mar 14.  Sources within OPEC have indicated that its members increasingly favor extended production cuts but want the backing of non-OPEC oil producers, such as Russia, which have yet to deliver fully on existing reductions.  The group & some non-OPEC producers agreed to curb production from Jan by 1.8M barrels per day (bpd) for 6 months to drain crude from record stockpiles.  But inventories remain stubbornly large.

Oil Slides as Market Discounts OPEC Output Cut Extension Talk

Lennar beat fiscal Q1 profit & sales expectation.  EPS fell to 56¢ from 63¢ in the same period a year ago, but was above the estimate of 55¢.  Revenue grew to $2.34B from $1.99B, beating the consensus of $2.14B, as homebuilding revenue of $2.02B topped expectations of $1.95B.  Home deliveries increased to 5433 from 4806 & the average sales price of $365K was about the same as last year, while incentives offered to homebuyers rose to $22.7K per home from $21.6K. The stock fell 1.41.  If you would like to learn more about LEN, click on this link:

Lennar Beats Profit And Sales Expectations As Home Deliveries Increase

Lennar (LEN)

Some House Reps are not happy with how ObamaCare is being revised & the repeal & replace movement is in doubt.  Tomorrow night will be a critical time for the new legislation.  Not only is this important for what it can bring, but, more importantly, the new tax code with the promise of lower taxes is behind it.  Traders are nervous & they are selling.  This has been the worst day for the stock market in 2017.  As pointed out so many times here, the goings on in DC will determine the future for stocks which looks shaky now..  Dow is down 500 since its peak at the start of Mar.
Dow Jones Industrials


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