Dow rose 88, advancers over decliners 2-1 & NAZ gained 20. The MLP index dropped 3+ to 271. Junk bond funds inched higher & Treasuries found a few buyers, taking the yield on the 10 year Treasury to 2.86%. Oil was off pennies in the 61s & gold added 1 to 1356.
AMJ (Alerian MLP Index tracking fund)
US consumer sentiment unexpectedly rose in Feb to the 2nd-highest level since 2004 as tax cuts & a strong job market helped Americans shrug off stock-market volatility, a Univ of Mich survey showed. Sentiment index rose to 99.9 (est 95.5), highest since the 13-year high in Oct, from 95.7 in Jan. Current conditions gauge, which measures Americans' perceptions of their finances, climbed to 115.1 from 110.5. Expectations measure advanced to 90.2 from 86.3 & year-ahead inflation expectations unchanged at 2.7%. The rise in sentiment, which surpassed all forecasts, comes as Americans’ paychecks are getting bigger due to the implementation of tax cuts under legislation signed by Pres Trump in Dec. The increase is also consistent with data on solid hiring & rising wages released by the Labor Dept earlier this month. 35% of respondents gave favorable references to gov policies, matching Jan as the highest level in more than a ½ century. Most of the positive news involved changes to tax policies & employment gains, while just 6% cited negative references to stock prices. Inflation expectations were unchanged, even after the wage figures sent Treasury yields spiking & started a rout in equities that pushed them into the first correction in 2 years. Consumers aren't expecting a sudden surge in inflation & the fewest consumers in decades cited rising prices as a cause of declining living standards. At the same time, rising borrowing costs may limit sentiment in coming months, with the 30-year fixed mortgage rate rising this week to the highest level since 2014. The report said higher interest rates in the year ahead were expected by the biggest share of consumers since 2005. “More consumers reported that they had recently heard news about economic developments in early February than at any other time since 1983,” Richard Curtin, director of the survey, said. “The stock market was rarely mentioned, and remarkably, it was more likely to be mentioned as a favorable development” because it was already rebounding & was up on an annual basis.
U.S. Consumer Sentiment Jumps as Tax Cuts Blunt Stock Drop
Stocks fluctuated while Treasuries & the $ halted slumps. The S&P 500 rose & fell modestly, leaving its weekly gain at the biggest in 5 years after the gauge fell into a correction last week. The 10-year Treasury yield pulled back below 2.9% & the $ rebounded after sinking to a 3-year low against major peers. The Stoxx Europe 600 Index headed for its biggest weekly gain in a year. Sterling slipped after UK retail sales missed estimates & gilts advanced. The torrid recovery in American equities lost momentum today as investors looked ahead to a 3-day weekend in the US with the S&P 500 now 5% below its Jan 26 record. Traders are focused on the outlook for the credit markets & interest rates as economic growth accelerates & fans inflation. Investors pulled $14.1B from debt funds in the latest week, the 5th-largest stretch of redemptions. Crude reversed an advance after rising to a one-week high.
US new-home construction rose in Jan to the highest level since Oct 2016, helped by a surge in apartment building, as momentum in the housing market continues into 2018, gov figures showed. Residential starts rose 9.7% to a 1.33M annualized rate (est 1.23M) after revised 1.21M pace in prior month. Multifamily home starts jumped 23.7% & single-family rose 3.7%. Permits, a proxy for future construction of all types of homes, climbed 7.4% to 1.40M rate (est 1.3M), highest since 2007. The results are a positive sign that homebuilding will continue its advance after the best year for new construction in a decade. Demand is expected to be supported by steady hiring & elevated confidence to make big purchases. The only region to suffer a setback in beginning construction last month was the Midwest, which was impacted by severe winter weather. In an indication that builders will be busy in coming months, 158K homes were authorized but not yet started in Jan. That was the most since 2008 & the number of homes currently under construction reached the highest level since 2007. A gauge of homebuilders' confidence is near the highest level since 1999, indicating developers expect a good year. Nonetheless, the industry faces hurdles that include a recent spike in mortgage rates, a shortage of workers, rising costs for materials & a scarcity of ready-to-build lots. Single-family home starts rose to an 877K rate from 846K the prior month.
U.S. Housing Starts Reach Highest Level in More Than a Year
The Dow is continuing its recovery. In just 6 trading days, the Dow is up 1400. That used to be called a staggering advance. On the other hand, it's still 1300 below the Jan 26 record. Short term oversold has been transformed back to overbought. There should be selling in the PM, as traders prepare for the long weekend. Next week traders will have to work harder to keep the rally going. Meanwhile gold continues to rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 61.14 | -0.20 | -0.3% |
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US consumer sentiment unexpectedly rose in Feb to the 2nd-highest level since 2004 as tax cuts & a strong job market helped Americans shrug off stock-market volatility, a Univ of Mich survey showed. Sentiment index rose to 99.9 (est 95.5), highest since the 13-year high in Oct, from 95.7 in Jan. Current conditions gauge, which measures Americans' perceptions of their finances, climbed to 115.1 from 110.5. Expectations measure advanced to 90.2 from 86.3 & year-ahead inflation expectations unchanged at 2.7%. The rise in sentiment, which surpassed all forecasts, comes as Americans’ paychecks are getting bigger due to the implementation of tax cuts under legislation signed by Pres Trump in Dec. The increase is also consistent with data on solid hiring & rising wages released by the Labor Dept earlier this month. 35% of respondents gave favorable references to gov policies, matching Jan as the highest level in more than a ½ century. Most of the positive news involved changes to tax policies & employment gains, while just 6% cited negative references to stock prices. Inflation expectations were unchanged, even after the wage figures sent Treasury yields spiking & started a rout in equities that pushed them into the first correction in 2 years. Consumers aren't expecting a sudden surge in inflation & the fewest consumers in decades cited rising prices as a cause of declining living standards. At the same time, rising borrowing costs may limit sentiment in coming months, with the 30-year fixed mortgage rate rising this week to the highest level since 2014. The report said higher interest rates in the year ahead were expected by the biggest share of consumers since 2005. “More consumers reported that they had recently heard news about economic developments in early February than at any other time since 1983,” Richard Curtin, director of the survey, said. “The stock market was rarely mentioned, and remarkably, it was more likely to be mentioned as a favorable development” because it was already rebounding & was up on an annual basis.
U.S. Consumer Sentiment Jumps as Tax Cuts Blunt Stock Drop
Stocks fluctuated while Treasuries & the $ halted slumps. The S&P 500 rose & fell modestly, leaving its weekly gain at the biggest in 5 years after the gauge fell into a correction last week. The 10-year Treasury yield pulled back below 2.9% & the $ rebounded after sinking to a 3-year low against major peers. The Stoxx Europe 600 Index headed for its biggest weekly gain in a year. Sterling slipped after UK retail sales missed estimates & gilts advanced. The torrid recovery in American equities lost momentum today as investors looked ahead to a 3-day weekend in the US with the S&P 500 now 5% below its Jan 26 record. Traders are focused on the outlook for the credit markets & interest rates as economic growth accelerates & fans inflation. Investors pulled $14.1B from debt funds in the latest week, the 5th-largest stretch of redemptions. Crude reversed an advance after rising to a one-week high.
U.S. Stocks Mixed as Treasuries Gain With Dollar: Markets Wrap
US new-home construction rose in Jan to the highest level since Oct 2016, helped by a surge in apartment building, as momentum in the housing market continues into 2018, gov figures showed. Residential starts rose 9.7% to a 1.33M annualized rate (est 1.23M) after revised 1.21M pace in prior month. Multifamily home starts jumped 23.7% & single-family rose 3.7%. Permits, a proxy for future construction of all types of homes, climbed 7.4% to 1.40M rate (est 1.3M), highest since 2007. The results are a positive sign that homebuilding will continue its advance after the best year for new construction in a decade. Demand is expected to be supported by steady hiring & elevated confidence to make big purchases. The only region to suffer a setback in beginning construction last month was the Midwest, which was impacted by severe winter weather. In an indication that builders will be busy in coming months, 158K homes were authorized but not yet started in Jan. That was the most since 2008 & the number of homes currently under construction reached the highest level since 2007. A gauge of homebuilders' confidence is near the highest level since 1999, indicating developers expect a good year. Nonetheless, the industry faces hurdles that include a recent spike in mortgage rates, a shortage of workers, rising costs for materials & a scarcity of ready-to-build lots. Single-family home starts rose to an 877K rate from 846K the prior month.
U.S. Housing Starts Reach Highest Level in More Than a Year
The Dow is continuing its recovery. In just 6 trading days, the Dow is up 1400. That used to be called a staggering advance. On the other hand, it's still 1300 below the Jan 26 record. Short term oversold has been transformed back to overbought. There should be selling in the PM, as traders prepare for the long weekend. Next week traders will have to work harder to keep the rally going. Meanwhile gold continues to rally.
Dow Jones Industrials
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