Dow soared 165 (at the highs), advancers over decliners a modest 4-3 & NAZ gained 23. The MLP index lost 1+ to the 273s & the REIT index retreated 1+ to the 353s. Junk bond fund were little changed & Treasuries dropped, taking the yield on the 10 year Treasury up to 2.38%. Oil was fractionally higher in the 51s & gold fell 9 to 1280 as stocks rallied.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.26308240299000174)
The US posted its largest budget deficit since 2013 in the fiscal year that just ended, as a pickup in spending exceeded revenue gains. The federal gov gap grew to $666B in the 12 months thru Sep compared with a $586B shortfall in fiscal 2016, the Treasury Dept said. That was in line with the Congressional Budget Office's estimate of $668B. Congress could be on track to worsen the deficit situation, according to most economic growth assumptions. The Senate just approved a budget resolution that would fast-track up to $1.5T in tax cuts thru Congress this year. Reps say that the cuts will pay for themselves thru faster economic growth. While the budget claims to reach a balance in 10 years through $5T in spending cuts, those reductions are not spelled out & there is no mechanism for speeding them into law. In the 2017 fiscal year, tax revenue totaled $3.31T compared with $3.27T a year earlier. Gov spending was $3.98T after $3.85T in fiscal 2016. For Sep, which is the final month in the fiscal calendar, the gov reported an $8B surplus, lower than the $33.4B surplus a year earlier.
U.S. Posts Its Largest Budget Deficit Since 2013
The Rep's tax reform framework will include a 4th bracket for the highest-earning individuals, House Speaker Paul Ryan. Ryan said Pres Donald Trump has been insistent on reintroducing the 4th bracket in order to make sure it's the middle class, not the wealthy, who receive the intended benefits from the tax cut package. “Once we get that [final] budget resolution, that tells us how our numbers will work, then we’ll introduce the bill which will have that fourth bracket, designed to make sure we don’t have a big drop in income tax rates for high-income people,” he said. During the interview, Trump confirmed discussions of a 4th bracket, but added he would "rather not" include it. Ryan declined to give the rate for the final bracket, but noted the highest bracket is currently set at 39.6%. Experts expect the 4th bracket to land somewhere between 35% & 39.6%. The other 3 tax brackets are set at 12%, 25% & 35%, & the Speaker said that the corresponding income levels will be detailed within the coming days. In order for the House Ways & Means Committee to introduce the tax reform legislation, Congress needs to approve a final version of the fiscal year 2018 budget. Late yesterday, the Senate passed its version of the bill, which differs in some very important ways from the House version. House sources said that Reps in the chamber are hoping to advance the tax reform package before Thanksgiving, with a goal of approval before year's end.
US home resales unexpectedly increased in Sep as the effects of Hurricanes Harvey & Irma began to dissipate, but a persistent dearth of properties for sale continued to weigh on overall activity. The National Association of Realtors reported existing home sales rose 0.7% to a seasonally adjusted annual rate of 5.39M units last month. Economists had forecast had sales falling 1.0% to a rate of 5.30M units. Sales were down 1.5% from Sep 2016, the first year-over-year decline since Jul 2016. Harvey & Irma, which battered Florida in early Sep, had already affected sales for Aug. Texas & Florida make up more than 18% of the nation's existing home sales. The NAR said that Houston's market had recovered quickly, with a 4% gain in Sep compared to a year ago. Florida's sales were still down 22% compared to this time last year. Analysts expect that sales in the hurricane-affected areas will rebound further once delays in sales fade. However, the overall housing sector has been slowing as the number of properties available has not kept up with demand. Supply was down 6.4% from a year ago. Housing inventory has declined on a year-on-year basis for more than 2 years. The median house price was $245K in Sep, a 4.2 % rise from a year ago, reflecting the shortage of homes on the market. "As long as we have a housing shortage, this will lead to affordability issues," the NAR said. At the current sales rate, it would take 4.2 months to clear inventory, down from 4.5 months a year ago. A 6-month supply; is viewed as a healthy balance between supply & demand. The median number of days that homes were on the market in Sep was 34, compared to 39 days a year ago. The Commerce Dept reported earlier this week that new US single-family home sales fell to a one-year low in Sep, as Harvey & Irma disrupted the construction of single-family homes in the South.
Honeywell International reported an 8.7% rise in Q3 profit, driven by its aerospace business. EPS rose to $1.75 in the qtr from $1.60 a year earlier. Revenue rose 3.2% to $10.1B. The industrial conglomerate also reaffirmed its full-year forecast for adjusted EPS. The company said earlier in Oct that it would pare its focus to 4 business lines, including aerospace, & spin off 2 businesses with $7.5B in revenue to help fund acquisitions. The stock rose 1.79.
If you would like to learn more about HON, click on this link:
club.ino.com/trend/analysis/stock/HON?a_aid=CD3289&a_bid=6ae5b6f7
Stocks finished he week on a strong note. The Dow rose more than 400 this week, although market breadth was not impressive today. The bulls are in firm command of the market with thoughts of lower taxes in their heads. The Dow has risen about 5K since Trump's election!!!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The US posted its largest budget deficit since 2013 in the fiscal year that just ended, as a pickup in spending exceeded revenue gains. The federal gov gap grew to $666B in the 12 months thru Sep compared with a $586B shortfall in fiscal 2016, the Treasury Dept said. That was in line with the Congressional Budget Office's estimate of $668B. Congress could be on track to worsen the deficit situation, according to most economic growth assumptions. The Senate just approved a budget resolution that would fast-track up to $1.5T in tax cuts thru Congress this year. Reps say that the cuts will pay for themselves thru faster economic growth. While the budget claims to reach a balance in 10 years through $5T in spending cuts, those reductions are not spelled out & there is no mechanism for speeding them into law. In the 2017 fiscal year, tax revenue totaled $3.31T compared with $3.27T a year earlier. Gov spending was $3.98T after $3.85T in fiscal 2016. For Sep, which is the final month in the fiscal calendar, the gov reported an $8B surplus, lower than the $33.4B surplus a year earlier.
U.S. Posts Its Largest Budget Deficit Since 2013
The Rep's tax reform framework will include a 4th bracket for the highest-earning individuals, House Speaker Paul Ryan. Ryan said Pres Donald Trump has been insistent on reintroducing the 4th bracket in order to make sure it's the middle class, not the wealthy, who receive the intended benefits from the tax cut package. “Once we get that [final] budget resolution, that tells us how our numbers will work, then we’ll introduce the bill which will have that fourth bracket, designed to make sure we don’t have a big drop in income tax rates for high-income people,” he said. During the interview, Trump confirmed discussions of a 4th bracket, but added he would "rather not" include it. Ryan declined to give the rate for the final bracket, but noted the highest bracket is currently set at 39.6%. Experts expect the 4th bracket to land somewhere between 35% & 39.6%. The other 3 tax brackets are set at 12%, 25% & 35%, & the Speaker said that the corresponding income levels will be detailed within the coming days. In order for the House Ways & Means Committee to introduce the tax reform legislation, Congress needs to approve a final version of the fiscal year 2018 budget. Late yesterday, the Senate passed its version of the bill, which differs in some very important ways from the House version. House sources said that Reps in the chamber are hoping to advance the tax reform package before Thanksgiving, with a goal of approval before year's end.
Trump’s tax overhaul will include fourth bracket on highest earners, Speaker Ryan says
US home resales unexpectedly increased in Sep as the effects of Hurricanes Harvey & Irma began to dissipate, but a persistent dearth of properties for sale continued to weigh on overall activity. The National Association of Realtors reported existing home sales rose 0.7% to a seasonally adjusted annual rate of 5.39M units last month. Economists had forecast had sales falling 1.0% to a rate of 5.30M units. Sales were down 1.5% from Sep 2016, the first year-over-year decline since Jul 2016. Harvey & Irma, which battered Florida in early Sep, had already affected sales for Aug. Texas & Florida make up more than 18% of the nation's existing home sales. The NAR said that Houston's market had recovered quickly, with a 4% gain in Sep compared to a year ago. Florida's sales were still down 22% compared to this time last year. Analysts expect that sales in the hurricane-affected areas will rebound further once delays in sales fade. However, the overall housing sector has been slowing as the number of properties available has not kept up with demand. Supply was down 6.4% from a year ago. Housing inventory has declined on a year-on-year basis for more than 2 years. The median house price was $245K in Sep, a 4.2 % rise from a year ago, reflecting the shortage of homes on the market. "As long as we have a housing shortage, this will lead to affordability issues," the NAR said. At the current sales rate, it would take 4.2 months to clear inventory, down from 4.5 months a year ago. A 6-month supply; is viewed as a healthy balance between supply & demand. The median number of days that homes were on the market in Sep was 34, compared to 39 days a year ago. The Commerce Dept reported earlier this week that new US single-family home sales fell to a one-year low in Sep, as Harvey & Irma disrupted the construction of single-family homes in the South.
US existing home sales unexpectedly rebound in September
Honeywell International reported an 8.7% rise in Q3 profit, driven by its aerospace business. EPS rose to $1.75 in the qtr from $1.60 a year earlier. Revenue rose 3.2% to $10.1B. The industrial conglomerate also reaffirmed its full-year forecast for adjusted EPS. The company said earlier in Oct that it would pare its focus to 4 business lines, including aerospace, & spin off 2 businesses with $7.5B in revenue to help fund acquisitions. The stock rose 1.79.
If you would like to learn more about HON, click on this link:
club.ino.com/trend/analysis/stock/HON?a_aid=CD3289&a_bid=6ae5b6f7
Honeywell 3Q revenue beat expectations
Stocks finished he week on a strong note. The Dow rose more than 400 this week, although market breadth was not impressive today. The bulls are in firm command of the market with thoughts of lower taxes in their heads. The Dow has risen about 5K since Trump's election!!!
Dow Jones Industrials
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