Dow fell 11, decliners ahead of advancers almost 5-4 & NAZ went up 15. The MLP index gained 2+ to the 272s & the REIT index was off a fraction to the 348s. Junk bond funds fluctuated & Treasuries rose in price. Oil was fractionally higher in the 54s (WOW) & gold added 2 to 1273.
AMJ (Alerian MLP Index tracking fund)
US consumer spending rose in Sep n 8 years as motor vehicle purchases surged in the aftermath of two hurricanes, Commerce Dept data showed. Stagnant inflation-adjusted incomes & the smallest saving rate in almost a decade indicate outlays may cool. Purchases rose 1% from prior month (est. 0.9% gain) after a 0.1% increase & incomes rose 0.4% (est. 0.4% gain) after 0.2% increase. The price gauge tied to consumption rose 0.4% from previous month (matching est.); was up 1.6% from year ago. Excluding food & energy, prices rose 0.1% (matching est.) & the core was up 1.3% from year ago. Saving rate fell to 3.1%, the smallest in 10 years, from 3.6%. The jump in Sep outlays was driven by purchases of durable goods including the replacement of motor vehicles lost in recent flooding from hurricanes. That means the latest surge probably overstates the strength of consumer spending. The last time spending rose as much was in mid-2009 when auto purchases were fueled by a federal gov incentive program called “cash-for-clunkers.” Meanwhile, real disposable income was flat after a 0.1% decline in Aug. While consumers are getting support from steady hiring, higher home values, stock-market gains & still- low inflation, a sustained pickup in wages would help them further boost purchases. The figures on prices showed inflation only inched up toward the Fed's 2% goal. The central bank's preferred inflation gauge has missed the Fed's target for most of the past 5 years.
U.S. Consumer Spending Rises Most Since 2009 on Car Buying
Pres Trump's plan for overhauling the US tax system faced growing opposition from interest groups, as Reps prepare to unveil sweeping legislation that could eliminate some of the most popular tax breaks to help pay for lower taxes. Reps who control the House of Reps will not reveal their bill until Wed. But the National Association of Home Builders, a powerful housing industry trade group, is already vowing to defeat it over a change that could affect the use of home mortgage deductions, while Rep leaders try to head off opposition to possible changes to individual retirement savings & state & local tax payments. Trump & Reps have vowed to enact tax reform this year for the first time since 1986. But the plan to deliver up to $6T in tax cuts for businesses & individuals faces challenges even from rank-&-file House Reps. House & Senate Reps are on a fast-track to pass separate tax bills before the Nov 23 Thanksgiving holiday, iron out differences in Dec, send a final version to Trump's desk before Jan & ultimately hand the pres his first major legislative victory. But there is a good chance the tax overhaul will be delayed until next year. The NAHB, which boasts 130K member firms employing 9M workers, says the bill would harm home prices by marginalizing the value of mortgage interest deductions as an incentive for buying homes. The trade group wants legislation to offer a tax credit equaling 12% of mortgage interest & property tax payments but says it was rebuffed by House Rep leaders. "We're opposed to the tax bill without the tax credit in there, and we'll be working very aggressively to see it defeated," NAHB CEO Jerry Howard said. House Ways & Means Committee Chairman Kevin Brady, the top House Rep on tax policy, suggested in a statement that the NAHB credit could still be included, saying: “I hope members of Congress will examine it closely to determine if they want it included.” Reps warned that the Trump tax plan is entering a new & difficult phase as lobbyists ramp up pressure on lawmakers to spare their pet tax breaks. "When groups start rallying against things and they succeed, everything starts unraveling," Senator Bob Corker, a leading Rep fiscal hawk, said yesterday.
Trump tax overhaul under intensifying fire as Congress readies bill
German inflation slowed more than predicted in Oct, evidence that backs the ECB's case for keeping stimulus flowing to entrench price stability in the euro area. Consumer prices rose an annual 1.5%, the Federal Statistics Office said, weaker than Sep's 1.8% & below the 1.7% forecast. Published a day before the euro area's inflation data, the German figures show how sustained inflation remains elusive even in the currency bloc's healthiest economy where unemployment is at a record low & domestic spending robust. The ECB agreed last week to extend its bond-buying program for a 3rd time & pledged to do more if needed, amid opposition from policy makers including Germany's Jens Weidmann who pushed for a firm commitment to end the program next year. Figures earlier today showed economic confidence in the region surged to its highest in almost 17 years. Separately, Spain reported that its inflation rate declined to 1.7% from 1.8%. Euro-zone inflation probably held steady at 1.5% this month, according to a separate survey. ECB Pres Mario Draghi said last week that consumer-price growth in the region will slow temporarily toward the turn of the year before rebounding as previous energy-price changes wash out.
Stocks begin the new week by stumbling. Consumer spending was the only major news story & that message is blurry because of additional spending following the big storms. Those guys in DC are getting serious about passing legislation for lower taxes. But special interests (called lobbyists) are all over DC, creating uncertainty about the future of lower taxes. That will be a major driver needed to extend the stock market rally. Stay tuned!
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 54.42 | +0.52 | +1.0% |
| GC=F | Gold | 1,274.00 | +2.20 | +0.2% |
US consumer spending rose in Sep n 8 years as motor vehicle purchases surged in the aftermath of two hurricanes, Commerce Dept data showed. Stagnant inflation-adjusted incomes & the smallest saving rate in almost a decade indicate outlays may cool. Purchases rose 1% from prior month (est. 0.9% gain) after a 0.1% increase & incomes rose 0.4% (est. 0.4% gain) after 0.2% increase. The price gauge tied to consumption rose 0.4% from previous month (matching est.); was up 1.6% from year ago. Excluding food & energy, prices rose 0.1% (matching est.) & the core was up 1.3% from year ago. Saving rate fell to 3.1%, the smallest in 10 years, from 3.6%. The jump in Sep outlays was driven by purchases of durable goods including the replacement of motor vehicles lost in recent flooding from hurricanes. That means the latest surge probably overstates the strength of consumer spending. The last time spending rose as much was in mid-2009 when auto purchases were fueled by a federal gov incentive program called “cash-for-clunkers.” Meanwhile, real disposable income was flat after a 0.1% decline in Aug. While consumers are getting support from steady hiring, higher home values, stock-market gains & still- low inflation, a sustained pickup in wages would help them further boost purchases. The figures on prices showed inflation only inched up toward the Fed's 2% goal. The central bank's preferred inflation gauge has missed the Fed's target for most of the past 5 years.
U.S. Consumer Spending Rises Most Since 2009 on Car Buying
Pres Trump's plan for overhauling the US tax system faced growing opposition from interest groups, as Reps prepare to unveil sweeping legislation that could eliminate some of the most popular tax breaks to help pay for lower taxes. Reps who control the House of Reps will not reveal their bill until Wed. But the National Association of Home Builders, a powerful housing industry trade group, is already vowing to defeat it over a change that could affect the use of home mortgage deductions, while Rep leaders try to head off opposition to possible changes to individual retirement savings & state & local tax payments. Trump & Reps have vowed to enact tax reform this year for the first time since 1986. But the plan to deliver up to $6T in tax cuts for businesses & individuals faces challenges even from rank-&-file House Reps. House & Senate Reps are on a fast-track to pass separate tax bills before the Nov 23 Thanksgiving holiday, iron out differences in Dec, send a final version to Trump's desk before Jan & ultimately hand the pres his first major legislative victory. But there is a good chance the tax overhaul will be delayed until next year. The NAHB, which boasts 130K member firms employing 9M workers, says the bill would harm home prices by marginalizing the value of mortgage interest deductions as an incentive for buying homes. The trade group wants legislation to offer a tax credit equaling 12% of mortgage interest & property tax payments but says it was rebuffed by House Rep leaders. "We're opposed to the tax bill without the tax credit in there, and we'll be working very aggressively to see it defeated," NAHB CEO Jerry Howard said. House Ways & Means Committee Chairman Kevin Brady, the top House Rep on tax policy, suggested in a statement that the NAHB credit could still be included, saying: “I hope members of Congress will examine it closely to determine if they want it included.” Reps warned that the Trump tax plan is entering a new & difficult phase as lobbyists ramp up pressure on lawmakers to spare their pet tax breaks. "When groups start rallying against things and they succeed, everything starts unraveling," Senator Bob Corker, a leading Rep fiscal hawk, said yesterday.
Trump tax overhaul under intensifying fire as Congress readies bill
German inflation slowed more than predicted in Oct, evidence that backs the ECB's case for keeping stimulus flowing to entrench price stability in the euro area. Consumer prices rose an annual 1.5%, the Federal Statistics Office said, weaker than Sep's 1.8% & below the 1.7% forecast. Published a day before the euro area's inflation data, the German figures show how sustained inflation remains elusive even in the currency bloc's healthiest economy where unemployment is at a record low & domestic spending robust. The ECB agreed last week to extend its bond-buying program for a 3rd time & pledged to do more if needed, amid opposition from policy makers including Germany's Jens Weidmann who pushed for a firm commitment to end the program next year. Figures earlier today showed economic confidence in the region surged to its highest in almost 17 years. Separately, Spain reported that its inflation rate declined to 1.7% from 1.8%. Euro-zone inflation probably held steady at 1.5% this month, according to a separate survey. ECB Pres Mario Draghi said last week that consumer-price growth in the region will slow temporarily toward the turn of the year before rebounding as previous energy-price changes wash out.
German Inflation Slows in Evidence of Euro- Area Price Struggle
Stocks begin the new week by stumbling. Consumer spending was the only major news story & that message is blurry because of additional spending following the big storms. Those guys in DC are getting serious about passing legislation for lower taxes. But special interests (called lobbyists) are all over DC, creating uncertainty about the future of lower taxes. That will be a major driver needed to extend the stock market rally. Stay tuned!
Dow Jones Industrials
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