Tuesday, August 15, 2017

Lower markets after yesterday's rally

Dow crawled up 7, decliners over advancers about 2-1 & NAZ gave back 2.  The MLP index dropped 5+ to the 272s & the REIT index lost 3+ to the 347s.  Junk bond funds pulled back & Treasuries saw more selling.  Oil slid lower in the 47s & gold dropped a very big 13 to 1276.

AMJ (Alerian MLP Index tracking fund)

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A gauge of US home-builder confidence rebounded in Aug following a 2-month slide.  The National Association of Home Builders on Tuesday index tracking confidence in the market for new single-family homes rose to 68  from 64 in Jul.  It had been 66 in Jun & 69 in May.  The forecast was for a reading of 65.   "The fact that builder confidence has returned to the healthy levels we saw this spring is consistent with our forecast for a gradual strengthening in the housing market," said Robert Dietz, the trade group's chief economist.   The confidence gauge traditionally tracked the construction of single-family homes, though the 2 measures have diverged in recent years.  In H1-2017, single-family housing starts were up 7.9% compared with the first 6 months of 2016, according to the Commerce Dept. 
US retail sales rose 0.6 percent in July amid strong auto demand, best gain in 7 months.

US retail sales rose 0.6 percent in July amid strong auto demand, best gain in 7 months

Factory activity in NY surged this month to the highest level in nearly 3 years.  The Federal Reserve Bank of NY said that its Empire State manufacturing index jumped to 25.2 this month from 9.8 in Jul.  The Aug reading was the highest in years.  New orders, shipments & hiring all picked up in Aug.  Factories also expressed optimism that conditions would continue to improve over the next 6 months.  The index measures sentiment among firms in area  states & is closely followed by economists because it provides an early read on factory output nationwide.  American manufacturers have recovered from a slump in late 2015 & early 2016 caused by cutbacks in the energy industry & a strong dollar, which makes US products costlier in foreign markets.  The Commerce Dept reported earlier this month that orders at US factories shot up in Jun on strong demand for civilian aircraft.  The Institute for Supply Management reported that American factories expanded in Jul for the 11th straight month.  Factories have hired 66K workers since Jul 2016, the biggest 12-month gain in nearly 1½ years.

New York factory activity rises, nears 3-year high in August

US import prices increased in Jul after 2 straight monthly declines, driven by rising costs for petroleum products & food, but underlying imported inflation remained muted.  The Labor Dept said that import prices edged up 0.1% after an unrevised 0.2% drop in Jun.  Last month's increase was in line with expectations & left the 12-month increase at 1.5%.  The year-on-year increase in import prices has slowed sharply since hitting 4.7% in Feb, which was the biggest advance in 5 years.  Imported inflation has been dampened by a strong $.  With the greenback falling 6.6% against the currencies of US main trading partners this year, price pressures are expected to start creeping up.  Prices for imported petroleum increased 0.7% in Jul after decreasing 2.9% in Jun.  Import prices excluding petroleum were unchanged after rising 0.1% in the prior month.  Import prices excluding petroleum increased 0.9% in the 12 months thru Jul.  Prices for imported capital goods nudged up 0.1% & imported motor vehicle prices fell 0.2% for a 2nd straight month.  The cost of imported food increased 0.6%.  Export prices rebounded 0.4% in Jul, the biggest gain since Dec 2016, after falling 0.2% in Jun.  Export prices increased 0.8% on a year-on-year basis after rising 0.6% in the 12 months thru Jun.

US import prices rebound after two straight monthly declines

Stocks are digesting the gains made yesterday.  The Dow is only slightly higher while NAZ is about even.  Today's economic data is fairly encouraging, although it fluctuates on a monthly basis.  This is a vacation time for some, so the stock market may not be exciting in the absence of significant news stories..  North Korea seems to have hit the pause button, a plus for stocks.  However, as pointed out yesterday, DC remains in chaos, not a good sign going forwar

Dow Jones Industrials
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