Dow fell 56, slightly ahead of advancers & NAZ added 7. The MLP index gained 3+ to 260 & the REIT index fell 2+ to the 321s. Junk bond funds did little & Treasuries were sold again, bringing the yield on the 10 year Treasury up to 2.95%. Oil dropped to the 67s & gold sank 13 to 1325.
AMJ (Alerian MLP Index tracking fund)
Pres Trump's softening of its stance follows 2 weeks of chaos on global metals markets, after the sanctions triggered a surge in aluminum prices to multi-year highs & fears of shutdowns at Rusal plants. A German lobbying group said last week that European plants may be forced to close & carmakers could face supply shortages. In a separate statement, Treasury Sec Steve Mnuchin said the US is considering a petition from Rusal to remove it from the sanctions list. “Rusal has felt the impact of U.S. sanctions because of its entanglement with Oleg Deripaska, but the U.S. government is not targeting the hardworking people who depend on Rusal and its subsidiaries,” he added. The statement will add pressure on the aluminum magnate as he seeks a way to save his company without surrendering control. While analysts have suggested that nationalization may be the only solution, Finance Minister Anton Siluanov told aid that Rusal was not on the list to be nationalized. The selloff in aluminum after the Treasury announcement spread through other commodity markets on optimism the US isn't likely to impose further sanctions on Russia's metals & energy companies.
U.S. Softens Stance on Rusal Sanctions; Aluminum Prices Plunge
Treasury Sec Steve Mnuchin said he's considering a trip to China amid a trade dispute with Beijing that finance chiefs warn could derail the global economic upswing. Mnuchin said he's “cautiously optimistic” of reaching an agreement with China that bridges their differences over trade. “A trip is under consideration,” Mnuchin told reporters at the IMF spring meetings. “I’m not going to make a comment on timing, nor do I have anything confirmed.” China’s Ministry of Commerce said yesterday it is aware that the US is considering a visit to Beijing to negotiate economic & trade issues & welcomes such a move. A visit by the Treasury secretary to China could signal a breakthrough in the spat between the world's 2-biggest economies, whose threats to slap tariffs on each other have rattled markets & raised fears of a trade war. It would come at a sensitive time for the region's geopolitics, with negotiations under way on a planned meeting between Pres Trump & North Korean leader Kim Jong-Un. Mnuchin’s remarks came as finance ministers & central bankers at the IMF meetings gave their latest economic assessments, often citing trade as a threat looming over the strongest upswing in 7 years. Global growth has strengthened & is increasingly broad based, the IMF's main advisory committee said. However, it noted that “rising financial vulnerabilities, increasing trade & geopolitical tensions, & historically high global debt threaten global growth prospects.” IMF First Deputy Managing Director David Lipton summed up the main takeaway he heard from officials at the meetings this week as “times are good but it’s getting risky.”
Sales of previously owned US homes rose to a 4-month high as buyers, fueled by a solid job market & tax cuts, quickly snapped up the limited number of available properties, National Association of Realtors (NAR) data showed. Contract closings advanced 1.1% M/M to 5.6M annual rate (est 5.55M), from 5.54M. The median sales price rose 5.8% Y/Y to $250K. Inventory of available properties fell 7.2% Y/Y to 1.67M, lowest for Mar in data back to 1999. The increase reflected gains in higher-priced homes as well as condominiums & co-op units, according to NAR. Even with the advance in sales, concerns about low inventory remain prominent, with the limited number of new properties pushing up costs & reducing activity at the lower end. Half of homes sold in Mar were on the market for less than a month. Sales of homes priced $100-250K were down 7.8% from a year ago, while homes at $750K or above were up more than 15K. NAR said it expects inventories to pick up around late summer or autumn in part because housing permits are rising & construction wages are advancing, drawing in more workers. There's also potential for regulatory changes among small banks, a key source of loans to homebuilders. While the new tax law has given Americans more disposable income that may support housing demand, it also put new limits on deductions for mortgage interest & local property taxes, reducing incentives in areas such as NY & NJ. Potential homebuyers are citing the tax law less frequently as a worry, though they are concerned about interest rates rising. Existing-home sales account for 90% of the market & are calculated when a contract closes. Mar figures, due tomorrow, for new-home sales, which are tabulated when contracts get signed, making them a timelier indicator despite their smaller share. “The March figure is good; we are still being challenged by the lack of inventory, however,” Lawrence Yun, NAR's chief economist, said. New listings are up compared with a year ago, but they “are being gobbled up quickly,” Yun added. “Low-end inventories are being drained away,” and with so little supply, there are few transactions, he said. At the current pace, it would take 3.6 months to sell the homes on the market, compared to 3.4 months in Feb. Realtors group considers less than a 5 month supply as consistent with a tight market. Single-family home sales increased 0.6% last month to an annual rate of 4.99M.
Stocks are dropping as I write. Trade negotiations aren't doing much of anything as should be the case for weeks, if not months. Rising interest rates are making headlines & that gets traders nervous, even if this is not a great surprise. Dow continues close to 24K, where it's been for about 3 months (shown below). However, safe haven gold is also being sold
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 67.30 | -1.10 | -1.61% |
| GC=F | Gold | 1,326.10 | -12.20 | -0.91% |
Pres Trump's softening of its stance follows 2 weeks of chaos on global metals markets, after the sanctions triggered a surge in aluminum prices to multi-year highs & fears of shutdowns at Rusal plants. A German lobbying group said last week that European plants may be forced to close & carmakers could face supply shortages. In a separate statement, Treasury Sec Steve Mnuchin said the US is considering a petition from Rusal to remove it from the sanctions list. “Rusal has felt the impact of U.S. sanctions because of its entanglement with Oleg Deripaska, but the U.S. government is not targeting the hardworking people who depend on Rusal and its subsidiaries,” he added. The statement will add pressure on the aluminum magnate as he seeks a way to save his company without surrendering control. While analysts have suggested that nationalization may be the only solution, Finance Minister Anton Siluanov told aid that Rusal was not on the list to be nationalized. The selloff in aluminum after the Treasury announcement spread through other commodity markets on optimism the US isn't likely to impose further sanctions on Russia's metals & energy companies.
U.S. Softens Stance on Rusal Sanctions; Aluminum Prices Plunge
Treasury Sec Steve Mnuchin said he's considering a trip to China amid a trade dispute with Beijing that finance chiefs warn could derail the global economic upswing. Mnuchin said he's “cautiously optimistic” of reaching an agreement with China that bridges their differences over trade. “A trip is under consideration,” Mnuchin told reporters at the IMF spring meetings. “I’m not going to make a comment on timing, nor do I have anything confirmed.” China’s Ministry of Commerce said yesterday it is aware that the US is considering a visit to Beijing to negotiate economic & trade issues & welcomes such a move. A visit by the Treasury secretary to China could signal a breakthrough in the spat between the world's 2-biggest economies, whose threats to slap tariffs on each other have rattled markets & raised fears of a trade war. It would come at a sensitive time for the region's geopolitics, with negotiations under way on a planned meeting between Pres Trump & North Korean leader Kim Jong-Un. Mnuchin’s remarks came as finance ministers & central bankers at the IMF meetings gave their latest economic assessments, often citing trade as a threat looming over the strongest upswing in 7 years. Global growth has strengthened & is increasingly broad based, the IMF's main advisory committee said. However, it noted that “rising financial vulnerabilities, increasing trade & geopolitical tensions, & historically high global debt threaten global growth prospects.” IMF First Deputy Managing Director David Lipton summed up the main takeaway he heard from officials at the meetings this week as “times are good but it’s getting risky.”
U.S. Hints at China Truce as World Warns of Trade-War Threat
Sales of previously owned US homes rose to a 4-month high as buyers, fueled by a solid job market & tax cuts, quickly snapped up the limited number of available properties, National Association of Realtors (NAR) data showed. Contract closings advanced 1.1% M/M to 5.6M annual rate (est 5.55M), from 5.54M. The median sales price rose 5.8% Y/Y to $250K. Inventory of available properties fell 7.2% Y/Y to 1.67M, lowest for Mar in data back to 1999. The increase reflected gains in higher-priced homes as well as condominiums & co-op units, according to NAR. Even with the advance in sales, concerns about low inventory remain prominent, with the limited number of new properties pushing up costs & reducing activity at the lower end. Half of homes sold in Mar were on the market for less than a month. Sales of homes priced $100-250K were down 7.8% from a year ago, while homes at $750K or above were up more than 15K. NAR said it expects inventories to pick up around late summer or autumn in part because housing permits are rising & construction wages are advancing, drawing in more workers. There's also potential for regulatory changes among small banks, a key source of loans to homebuilders. While the new tax law has given Americans more disposable income that may support housing demand, it also put new limits on deductions for mortgage interest & local property taxes, reducing incentives in areas such as NY & NJ. Potential homebuyers are citing the tax law less frequently as a worry, though they are concerned about interest rates rising. Existing-home sales account for 90% of the market & are calculated when a contract closes. Mar figures, due tomorrow, for new-home sales, which are tabulated when contracts get signed, making them a timelier indicator despite their smaller share. “The March figure is good; we are still being challenged by the lack of inventory, however,” Lawrence Yun, NAR's chief economist, said. New listings are up compared with a year ago, but they “are being gobbled up quickly,” Yun added. “Low-end inventories are being drained away,” and with so little supply, there are few transactions, he said. At the current pace, it would take 3.6 months to sell the homes on the market, compared to 3.4 months in Feb. Realtors group considers less than a 5 month supply as consistent with a tight market. Single-family home sales increased 0.6% last month to an annual rate of 4.99M.
U.S. Existing-Home Sales Rise as Properties Draw Quick Bids
Stocks are dropping as I write. Trade negotiations aren't doing much of anything as should be the case for weeks, if not months. Rising interest rates are making headlines & that gets traders nervous, even if this is not a great surprise. Dow continues close to 24K, where it's been for about 3 months (shown below). However, safe haven gold is also being sold
Dow Jones Industrials
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