Dow jumped up 210, advancers over decliners 5-2 & NAZ gained 36. The MLP index rose 7 to the 255s & the REIT index added 1+ to the 323s. Junk bond funds climbed higher & Treasuries were sold. Oil fell to the 66s & gold went up 3 to 1351.
AMJ (Alerian MLP Index tracking fund)
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Stocks rallied & Treasuries slid with oil as geopolitical tensions eased & investors turned their attention to corp results. The S&P 500 Index padded last week's gain after there was no immediate reprisal to US, France & the UK's missile attack in Syria & the trade spat cooled. Treasury yields edged to the highest in 3 weeks, while the greenback fell to the lowest since Mar after Pres Trump accused China & Russia of devaluing their currencies. West Texas crude futures fell below $67 a barrel amid concern that shale production will rise further. Trump declared "mission accomplished" via Twitter after the US, France & the UK launched military strikes in response to Syrian leader Assad's suspected chemical attack on civilians. While geopolitical concerns linger, with new US sanctions on Russia, the focus this week is back on earnings season in the US & a slew of Federal Reserve officials who are due to speak, including the incoming head of the NY Fed, John Williams. Aluminum resumed its rally, adding to what was its biggest weekly increase on record Fri. The ¥ edged up as polls showed falling support for Japanese Prime Minister Shinzo Abe's gov.
Pres Trump accused China & Russia of devaluing their currencies, opening a new front in his argument that foreign govs are taking advantage of the US economy to support their own expansions. Just 3 days after the Treasury ruled no country is manipulating its exchange rate, Trump took to Twitter to declare that China & Russia are playing what he called a “currency devaluation game” at a time when the Federal Reserve is raising interest rates. The attack adds fuel to the brewing trade dispute between the US & China, while also targeting Russia, which the White House recently imposed sanctions on & clashed with over Syria. Trump has repeatedly blasted Beijing for failing to reduce its trade surplus and open its markets to American investment. China's yuan, though, has gained about 10% against the $ over the past 12 months, climbing in Mar to the strongest level since Aug 2015. The ruble has weakened almost 10% against the $ in the past year, with much of the decline following the US's introduction of sanctions on dozens of Russian tycoons, companies & key allies of Pres Putin. Trump's suggestion that a currency war is on the horizon comes as central bankers & finance ministers from around the world prepare to gather in DC for the Spring meetings of the IMF this week. The Treasury Dept's semi-annual foreign currency report on Friday ratcheted up criticism of China's failure to correct its trade imbalance with America & said the increasingly “non-market direction” of China's economy presented a risk to global growth. Russia, however, isn't among the 12-largest trading partners & Switzerland that are assessed in the report. The Treasury said on Fri it was considering expanding the number of economies tracked in the study.
Trump Blasts China, Russia for FX Devaluation as Fed Hikes
Sentiment among US homebuilders fell in Apr for a 4th straight month, reflecting higher lumber prices & limited land availability, according to the National Association of Home Builders/Wells Fargo. Housing Market Index eased by 1 point to a five-month low of 69 (est 70). Current-sales measure for single-family homes dropped to 75, the lowest since Oct, from 77 & the gauge of prospective buyer traffic held at 51. Gauge of 6-month sales outlook cooled to 77 from 78. Soaring lumber prices, partly a reflection of US tariffs, are raising the cost of home construction at the same time mortgage rates near a 4-year high hamper affordability. Higher borrowing & materials costs indicate home ownership will be less attractive for those wanting to enter the market for the first time. Developers, nonetheless, remain upbeat about the market's prospects because of a strong job market, bigger after-tax paychecks & improving finances. “Strong demand for housing is keeping builders optimistic about future conditions,” NAHB Chairman Randy Noel, a custom-home builder, said. “However, builders are facing supply-side constraints, such as a lack of buildable lots and increasing construction material costs. Tariffs place on Canadian lumber and other imported products are pushing up prices and hurting housing affordability.”
The markets breathed a sigh of relief after nothing happened following the missile attack on Syria. However that remains a hotbed of problems & troubles. It's best to take that situation one day at a time. Trump is going after China & Russia, an area that is probably even more troubling with greater uncertainties. So far the Dow is taking the news in stride, but the bulls will have to make a stronger case to take the Dow up to 25K. And gold continues in demand. Currently, earnings should be the driving force for market moves.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 66.73 | -0.66 | -1.0% |
| ZG=F | Gold 100 oz. Jun 18 | 1,347.50 | -0.40 | -0.0% |
Stocks rallied & Treasuries slid with oil as geopolitical tensions eased & investors turned their attention to corp results. The S&P 500 Index padded last week's gain after there was no immediate reprisal to US, France & the UK's missile attack in Syria & the trade spat cooled. Treasury yields edged to the highest in 3 weeks, while the greenback fell to the lowest since Mar after Pres Trump accused China & Russia of devaluing their currencies. West Texas crude futures fell below $67 a barrel amid concern that shale production will rise further. Trump declared "mission accomplished" via Twitter after the US, France & the UK launched military strikes in response to Syrian leader Assad's suspected chemical attack on civilians. While geopolitical concerns linger, with new US sanctions on Russia, the focus this week is back on earnings season in the US & a slew of Federal Reserve officials who are due to speak, including the incoming head of the NY Fed, John Williams. Aluminum resumed its rally, adding to what was its biggest weekly increase on record Fri. The ¥ edged up as polls showed falling support for Japanese Prime Minister Shinzo Abe's gov.
U.S. Stocks Advance, Bonds Fall as Earnings Eyed: Markets Wrap
Pres Trump accused China & Russia of devaluing their currencies, opening a new front in his argument that foreign govs are taking advantage of the US economy to support their own expansions. Just 3 days after the Treasury ruled no country is manipulating its exchange rate, Trump took to Twitter to declare that China & Russia are playing what he called a “currency devaluation game” at a time when the Federal Reserve is raising interest rates. The attack adds fuel to the brewing trade dispute between the US & China, while also targeting Russia, which the White House recently imposed sanctions on & clashed with over Syria. Trump has repeatedly blasted Beijing for failing to reduce its trade surplus and open its markets to American investment. China's yuan, though, has gained about 10% against the $ over the past 12 months, climbing in Mar to the strongest level since Aug 2015. The ruble has weakened almost 10% against the $ in the past year, with much of the decline following the US's introduction of sanctions on dozens of Russian tycoons, companies & key allies of Pres Putin. Trump's suggestion that a currency war is on the horizon comes as central bankers & finance ministers from around the world prepare to gather in DC for the Spring meetings of the IMF this week. The Treasury Dept's semi-annual foreign currency report on Friday ratcheted up criticism of China's failure to correct its trade imbalance with America & said the increasingly “non-market direction” of China's economy presented a risk to global growth. Russia, however, isn't among the 12-largest trading partners & Switzerland that are assessed in the report. The Treasury said on Fri it was considering expanding the number of economies tracked in the study.
Trump Blasts China, Russia for FX Devaluation as Fed Hikes
Sentiment among US homebuilders fell in Apr for a 4th straight month, reflecting higher lumber prices & limited land availability, according to the National Association of Home Builders/Wells Fargo. Housing Market Index eased by 1 point to a five-month low of 69 (est 70). Current-sales measure for single-family homes dropped to 75, the lowest since Oct, from 77 & the gauge of prospective buyer traffic held at 51. Gauge of 6-month sales outlook cooled to 77 from 78. Soaring lumber prices, partly a reflection of US tariffs, are raising the cost of home construction at the same time mortgage rates near a 4-year high hamper affordability. Higher borrowing & materials costs indicate home ownership will be less attractive for those wanting to enter the market for the first time. Developers, nonetheless, remain upbeat about the market's prospects because of a strong job market, bigger after-tax paychecks & improving finances. “Strong demand for housing is keeping builders optimistic about future conditions,” NAHB Chairman Randy Noel, a custom-home builder, said. “However, builders are facing supply-side constraints, such as a lack of buildable lots and increasing construction material costs. Tariffs place on Canadian lumber and other imported products are pushing up prices and hurting housing affordability.”
U.S. Homebuilder Sentiment Declined in April for a Fourth Month
The markets breathed a sigh of relief after nothing happened following the missile attack on Syria. However that remains a hotbed of problems & troubles. It's best to take that situation one day at a time. Trump is going after China & Russia, an area that is probably even more troubling with greater uncertainties. So far the Dow is taking the news in stride, but the bulls will have to make a stronger case to take the Dow up to 25K. And gold continues in demand. Currently, earnings should be the driving force for market moves.
Dow Jones Industrials
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