Dow went up 28, advancers just ahead of decliners & NAZ added 7. The MLP index fell 1 to the 282s & the REIT index lost 2+ to the 354s. Junk bond funds hardly budged & Treasuries were a tad lower. Oil was off pennies in the 49s (more below) & gold rebounded all of 1.
AMJ (Alerian MLP Index tracking fund)
Steady US new-home construction in Aug together with a jump in permits indicate the housing market was moving ahead before a likely temporary hit from Hurricanes Harvey & Irma, gov figures showed. Residential starts fell 0.8% M/M to a 1.18M annualized rate (est. 1.174M) after upwardly revised 1.19M pace the prior month. Single-family home starts rose 1.6% to 851K while multifamily starts, such as apartment buildings & condominiums, fell 6.5% to 329K. Permits, a proxy for future construction, rose 5.7% to 1.3M rate (est. 1.22M), highest since Jan, from 1.23M pace. Data collection on housing starts was below normal in Texas, Florida areas affected by storms. T he pace of groundbreaking may show swings for several months following Harvey's extensive damage to southeast Texas in late Aug & Irma's landfall in Florida in early Sep. Higher prices for construction materials also have the potential to pinch the industry, which is already contending with a shortage of workers and ready-to-build lots. Reflecting the heightened concerns, builder sentiment was weaker than estimated in Sep. At the same time, the solid job market & still-low mortgage costs will probably continue to underpin housing demand. Activity may rebound later this year & in early 2018 as rebuilding efforts begin in areas hit by the Atlantic hurricanes. Data on housing starts & completions were collected for about 60% of cases in Texas & Florida counties affected by the storms, compared with a typical response rate of 95%. Responses for permits were “not significantly lower than normal” in areas affected by the storms, the gov said. Texas counties affected by Harvey accounted for about 4% of US housing units authorized by permits in 2016 & about 8% in the South region. Sep data will reflect the impact of Irma in Florida, where the affected counties accounted for about 9% of US housing units in 2016 & 18% of those in the South.
Reps straining to find about $1T to finance sweeping tax cuts are homing in on 2 popular deductions that are woven into the nation's fiscal fabric, the mortgage interest deduction that millions of homeowners prize & the deduction for state & local taxes popular in Dem strongholds. About 30M Americans (20% of taxpayers) deduct mortgage interest from their income taxes, a deduction realtors & homebuilders argue is a catalyst to home ownership in the US. According to the most recent IRS tally, nearly 44M claim the deduction for state & local taxes in 2014, especially in the high-tax, high-income states of Cal, NY, NJ & Connecticut. Reps are determined to overhaul the tax code after more than 3 decades, delivering on a top legislative priority for Pres Trump. Highlighting items that have been modernized since 1986, the last year the tax code was overhauled. Speaker Paul Ryan, made a pitch for reform, saying, "Just like the rotary phone of the 80s, the American tax code is seriously outdated." The 2 deductions are in the cross-hairs as Reps look to slash corp & individual tax rates. The deductions point up how what's seen by some as a special-deal loophole is embraced by others as a revered middle-class touchstone. That's a major reason why an overhaul of the tax system, a political imperative for the GOP, is so difficult. House Reps, who have been working behind closed doors, are promising to reveal details of their plan next week. The Trump administration has thrown its weight behind a revamp of the tax system, but Reps are split on some core issues. They are divided over whether to add to the nation's soaring debt with tax cuts. In the Senate, Orrin Hatch who heads the tax-writing Finance Committee, says his panel won't be "a rubber stamp" for the House Rep plan. The GOP is at odds over eliminating the deduction for state & local taxes.
Oil continued to hover around $50 a barrel as traders awaited weekly storage data that may show the longest expansion of US crude inventories in almost ½ a year. US futures were little changed a day ahead of a gov report that's expected to show a 3.4M-barrel increase in US oil held in storage. The bearish supply outlook erased gains earlier in the session driven by Iraqi Oil Minister Jabbar al-Luaibi’s advocacy of deeper production cuts among OPEC member states & allied oil producers. While the US benchmark has climbed above $50 this month, prices have struggled to close above that level as rising output from American shale fields hinders efforts by OPEC, Russia & other major sources of supply to erode a stubborn glut. The Energy Information Administration sees shale-oil production reaching a record high in Oct. At least 13 fuel-making plants from Louisiana to Montana, including the largest US refinery operated by Motiva Enterprises in Texas, are postponing autumn maintenance for weeks or months. Some plants are churning out more fuel to take advantage of strong profit margins, while others are understaffed because workers were dispatched to help Gulf Coast facilities recover from Hurricane Harvey.
Toys "R" Us filed for bankruptcy & that took the retail sector by surprise. But the rest of the stock market will pay more attention to Trump's speech at the UN & what Janet has to say tomorrow. Congress looks to be serious about getting tax reform done (& maybe even healthcare), encouraging for the stock market. Any increase for the Dow means a new record, something that has become routine for many months.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Steady US new-home construction in Aug together with a jump in permits indicate the housing market was moving ahead before a likely temporary hit from Hurricanes Harvey & Irma, gov figures showed. Residential starts fell 0.8% M/M to a 1.18M annualized rate (est. 1.174M) after upwardly revised 1.19M pace the prior month. Single-family home starts rose 1.6% to 851K while multifamily starts, such as apartment buildings & condominiums, fell 6.5% to 329K. Permits, a proxy for future construction, rose 5.7% to 1.3M rate (est. 1.22M), highest since Jan, from 1.23M pace. Data collection on housing starts was below normal in Texas, Florida areas affected by storms. T he pace of groundbreaking may show swings for several months following Harvey's extensive damage to southeast Texas in late Aug & Irma's landfall in Florida in early Sep. Higher prices for construction materials also have the potential to pinch the industry, which is already contending with a shortage of workers and ready-to-build lots. Reflecting the heightened concerns, builder sentiment was weaker than estimated in Sep. At the same time, the solid job market & still-low mortgage costs will probably continue to underpin housing demand. Activity may rebound later this year & in early 2018 as rebuilding efforts begin in areas hit by the Atlantic hurricanes. Data on housing starts & completions were collected for about 60% of cases in Texas & Florida counties affected by the storms, compared with a typical response rate of 95%. Responses for permits were “not significantly lower than normal” in areas affected by the storms, the gov said. Texas counties affected by Harvey accounted for about 4% of US housing units authorized by permits in 2016 & about 8% in the South region. Sep data will reflect the impact of Irma in Florida, where the affected counties accounted for about 9% of US housing units in 2016 & 18% of those in the South.
U.S. Housing Starts Steady, Permits Rise Ahead of Hurricanes
Reps straining to find about $1T to finance sweeping tax cuts are homing in on 2 popular deductions that are woven into the nation's fiscal fabric, the mortgage interest deduction that millions of homeowners prize & the deduction for state & local taxes popular in Dem strongholds. About 30M Americans (20% of taxpayers) deduct mortgage interest from their income taxes, a deduction realtors & homebuilders argue is a catalyst to home ownership in the US. According to the most recent IRS tally, nearly 44M claim the deduction for state & local taxes in 2014, especially in the high-tax, high-income states of Cal, NY, NJ & Connecticut. Reps are determined to overhaul the tax code after more than 3 decades, delivering on a top legislative priority for Pres Trump. Highlighting items that have been modernized since 1986, the last year the tax code was overhauled. Speaker Paul Ryan, made a pitch for reform, saying, "Just like the rotary phone of the 80s, the American tax code is seriously outdated." The 2 deductions are in the cross-hairs as Reps look to slash corp & individual tax rates. The deductions point up how what's seen by some as a special-deal loophole is embraced by others as a revered middle-class touchstone. That's a major reason why an overhaul of the tax system, a political imperative for the GOP, is so difficult. House Reps, who have been working behind closed doors, are promising to reveal details of their plan next week. The Trump administration has thrown its weight behind a revamp of the tax system, but Reps are split on some core issues. They are divided over whether to add to the nation's soaring debt with tax cuts. In the Senate, Orrin Hatch who heads the tax-writing Finance Committee, says his panel won't be "a rubber stamp" for the House Rep plan. The GOP is at odds over eliminating the deduction for state & local taxes.
GOP eyes popular tax breaks to finance overhaul
Oil continued to hover around $50 a barrel as traders awaited weekly storage data that may show the longest expansion of US crude inventories in almost ½ a year. US futures were little changed a day ahead of a gov report that's expected to show a 3.4M-barrel increase in US oil held in storage. The bearish supply outlook erased gains earlier in the session driven by Iraqi Oil Minister Jabbar al-Luaibi’s advocacy of deeper production cuts among OPEC member states & allied oil producers. While the US benchmark has climbed above $50 this month, prices have struggled to close above that level as rising output from American shale fields hinders efforts by OPEC, Russia & other major sources of supply to erode a stubborn glut. The Energy Information Administration sees shale-oil production reaching a record high in Oct. At least 13 fuel-making plants from Louisiana to Montana, including the largest US refinery operated by Motiva Enterprises in Texas, are postponing autumn maintenance for weeks or months. Some plants are churning out more fuel to take advantage of strong profit margins, while others are understaffed because workers were dispatched to help Gulf Coast facilities recover from Hurricane Harvey.
Toys "R" Us filed for bankruptcy & that took the retail sector by surprise. But the rest of the stock market will pay more attention to Trump's speech at the UN & what Janet has to say tomorrow. Congress looks to be serious about getting tax reform done (& maybe even healthcare), encouraging for the stock market. Any increase for the Dow means a new record, something that has become routine for many months.
Dow Jones Industrials
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