Dow went up 30, advancers over decliners 3-2 & NAZ gained 29. The MLP index rose 4+ to the 264s & the REIT index added 1+ to 351. Junk bond funds rose & Treasuries were flattish following recent price gains. Oil topped 70 for the first time since May & gold lost 8 to 1260, another 6 month low.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.8116015171332475)
Crude prices surged by more than 3% after the State Dept said it will require companies to cut all oil imports from Iran to zero by Nov. The announcement exacerbates concerns about a shortage of oil at a time when Venezuela's production is in terminal decline & the market is grappling with short-term supply disruptions from Canada & Libya. Last week, OPEC & other producers including Russia agreed to raise output to prevent price spikes. West Texas Intermediate crude futures finished the day up $2.45 a barrel (3.6%) to $70.53, erasing earlier losses & breaking above $70 for the first time since May 25. Intl benchmark Brent crude was up $1.60 (2.1%) at $76.33 per barrel. Pres Trump withdrew the US from the Iran nuclear deal & restored wide-ranging sanctions against the Middle Eastern country in May, but the administration did not set a timeline for completely cutting Iranian crude imports. Market-watchers questioned whether Trump would follow the Obama model, which called on foreign companies to reduce their purchases by 20% every 180 days. But the State Dept clarified that Trump expects buyers to entirely wind down those purchases by Nov 4. Iran, OPEC's 3rd biggest producer, exports more than 2M barrels per day. Earlier in the day, oil prices pulled back sharply following a report that Saudi Arabia aims to increase its output to record levels next month. Following an agreement among oil producers to ease output caps that have been in place for 18 months, the Saudis intend to hike production from about 10M barrels per day to 10.8M bpd in Jul. OPEC has faced pressure from big oil consumers like India & China to tamp down oil prices after they recently rose to new 3½-year highs. Trump also called on OPEC to add more supply, as he faces the prospect of Americans holding him accountable for gasoline prices hovering near $3 a gallon. Oil prices also got support today from an outage at Canada's largest oil sands facility & on concerns about Libya's crude exports due to developments in that country's ongoing conflict. The commander of Libya's eastern political faction has transferred control of oil ports to a national company aligned with his faction, cutting off access to the supplies from the official oil authority in Tripoli.
Oil surges 3.6%, settling at $70.53, after US says crude buyers must cut Iran crude imports to zero
Consumer confidence falls in June despite expectations for gains
The heat appears to be coming off home prices, albeit very slightly. Nationally, values rose 6.4% annually in Apr, down from a 6.5% gain the previous month, according to the S&P CoreLogic Case-Shiller National Home Price Index. The nation's 10 largest cities saw price gains of 6.2% in Apr, down from 6.4% in the previous month. The 20-City Composite posted a 6.6% year-over-year gain, down from 6.7% in the previous month. “Home prices continued their climb,” said David M. Blitzer, managing director of the Index Committee at S&P Dow Jones Indices. “Cities west of the Rocky Mountains continue to lead price increases with Seattle, Las Vegas & San Francisco ranking 1-2-3 based on price movements in the trailing 12 months. The favorable economy and moderate mortgage rates both support recent gains in housing.” The biggest factor heating home prices is the pervasive shortage of homes for sale. Supply is increasing very slightly month-to-month, but is still considerably lower than one year ago. 10 of the top 20 cities are currently higher than their peaks from 2006, not accounting for inflation. The national index is also above its last peak. “However, if one adjusts the price movements for inflation since 2006, a very different picture emerges,” noted Blitzer. “Only three cities – Dallas, Denver and Seattle – are ahead in real, or inflation-adjusted, terms. The National Index is 14 percent below its boom-time peak and Las Vegas, the city with the longest road to a new high, is 47 percent below its peak when inflation is factored in.” Demand for housing continues to outpace supply, even as mortgage rates increase. The nation's home builders saw higher sales in May, but they are still not increasing production at the rate the market needs. They are also more focused on the move-up than the entry-level
Home price gains ease in April: S&P Case-Shiller
Lennar (LEN) reported a better-than-expected quarterly profit as housing demand got a boost from a strengthening economy & job growth. Orders, an indication of future revenue for homebuilders, jumped 62.3% to 14,440 homes in the qtr. The company sold 12,095 homes, led by its eastern region, which includes Florida & NJ. The company sold 7710 homes in the qtr last year. The average sales price rose 10.4% to $413K. Deliveries & price were also helped by the acquisition of smaller rival CalAtlantic last year that increased the backlog of the combined company. Concerns about rising interest rates & construction costs have been offset by low unemployment & rising wages, combined with short supply, CEO Stuart Miller said. EPS rose to 94¢. The company had a charge of $236.8M related to purchase accounting & $23.9M in acquisition & integration costs for its CalAtlantic merger last year. Excluding items, EPS was $1.58, far above the estimate of 45¢. Revenue jumped 67.4% to $5.46B & topped the estimate for $5.11B. The stock advanced 2.39.
If you would like to learn more about LEN, click on this link:
club.ino.com/trend/analysis/stock/LEN?a_aid=CD3289&a_bid=6ae5b6f7
Lennar's profit jumps 45% on strong housing demand, sending shares sharply higher
Buyers returned, but without a lot of conviction. These are troubling times with intl trade & there will be many more announcements about changes to rules & customs which have been in place for years, even decades. After a decent gain, selling in the last hour caused the Dow to pull back about 100 from its peak. A test of 24K may be needed to see if the bulls are really in charge of this shaky market.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
CFOs are optimistic about the state of the global
economy, particularly America's & they plan on focusing on revenue
growth rather than cost cutting. But geopolitics, plus the difficulty of
finding & retaining talent, worry business leaders. This
is all according to CFO Signals, Deloitte’s quarterly, high-level
survey, conducted during Q2, about what the CFOs of
North America's largest companies are thinking. In
the survey, CFO assessments of the North American, European & Chinese economies' current performance remained very strong (with
North America at a new high), but their expectations for performance
declined somewhat, particularly for Europe & China. Their perceptions of North America improved, with 94% rating the
current conditions as “good,” up from Q1's 90% (a survey high). Perceptions of Europe declined to 47%, but remained near
their survey high & in China perceptions rose to 55%, a new high. 52% expect better conditions in a
year in North America, (down from 60%), in Europe, 36% expect better
conditions in a year versus 51% in the prior survey. For China, 31%
expect better conditions in a year (down from 37%). On
the other hand, business leaders expressed concern about how politics
plus finding and retaining talent will affect growth initiatives. The
lack of skilled labor is “very concerning” for large multinationals,
Sandy Cockrell, the global leader of the CFO Program for Deloitte Touche
Tohmatsu said. The
need for skilled labor across all industries is absolutely critical,
with Cockrell adding, “There will be wage growth for skilled labor.”
CFOs anticipate next year they will increase domestic payrolls by 3.2%, a survey record. Cockrell added that while
recently employers main concern has been attracting new workers, going
forward there will be a shifting focus to retaining talent. The
CFOs also voiced concerns about politics, namely trade policy, with
Cockrell noting that this survey was completed after the steel &
aluminum tariffs were announced but before the back & forth on tariffs
heated up. When it comes to future strategic initiatives, the
surveyed CFOs are biased toward revenue growth over cost reduction; 67%
vs 17%, while they were also biased toward investing cash versus
returning it; 56% versus 18%. While the
business leaders remain confident, their appetite for risk is
decreasing. 48s of CFOs say now is a good time to be
taking greater risk, down from last qtr's survey high of 69%.
Tight job market worries otherwise optimistic CFOs
Crude prices surged by more than 3% after the State Dept said it will require companies to cut all oil imports from Iran to zero by Nov. The announcement exacerbates concerns about a shortage of oil at a time when Venezuela's production is in terminal decline & the market is grappling with short-term supply disruptions from Canada & Libya. Last week, OPEC & other producers including Russia agreed to raise output to prevent price spikes. West Texas Intermediate crude futures finished the day up $2.45 a barrel (3.6%) to $70.53, erasing earlier losses & breaking above $70 for the first time since May 25. Intl benchmark Brent crude was up $1.60 (2.1%) at $76.33 per barrel. Pres Trump withdrew the US from the Iran nuclear deal & restored wide-ranging sanctions against the Middle Eastern country in May, but the administration did not set a timeline for completely cutting Iranian crude imports. Market-watchers questioned whether Trump would follow the Obama model, which called on foreign companies to reduce their purchases by 20% every 180 days. But the State Dept clarified that Trump expects buyers to entirely wind down those purchases by Nov 4. Iran, OPEC's 3rd biggest producer, exports more than 2M barrels per day. Earlier in the day, oil prices pulled back sharply following a report that Saudi Arabia aims to increase its output to record levels next month. Following an agreement among oil producers to ease output caps that have been in place for 18 months, the Saudis intend to hike production from about 10M barrels per day to 10.8M bpd in Jul. OPEC has faced pressure from big oil consumers like India & China to tamp down oil prices after they recently rose to new 3½-year highs. Trump also called on OPEC to add more supply, as he faces the prospect of Americans holding him accountable for gasoline prices hovering near $3 a gallon. Oil prices also got support today from an outage at Canada's largest oil sands facility & on concerns about Libya's crude exports due to developments in that country's ongoing conflict. The commander of Libya's eastern political faction has transferred control of oil ports to a national company aligned with his faction, cutting off access to the supplies from the official oil authority in Tripoli.
Oil surges 3.6%, settling at $70.53, after US says crude buyers must cut Iran crude imports to zero
Consumer confidence fell well below expectations in Jun, fueled by a bleak outlook for US economic conditions. The Confidence Board's index dropped to
126.4 from a revised 128.8 in May. The index was expected to hit 128.1,
according to a recent survey. American sentiment was
generally mixed about current conditions; however, positive feelings for
future business conditions & income prospects decreased. “Consumers’ assessment of
present-day conditions was relatively unchanged, suggesting that the
level of economic growth remains strong," said Lynn Franco, Director of
Economic Indicators at The Conference Board. "While expectations remain
high by historical standards, the modest curtailment in optimism
suggests that consumers do not foresee the economy gaining much momentum
in the months ahead.” Consumer confidence measures Americans' sentiment on current economic
conditions & expectations for the next 6 months, including business & labor market conditions. Since consumer spending accounts for about
70% of US economic activity, economists pay close attention to
the survey. Sentiment toward labor markets was unchanged with unemployment at an 18-year low of 3.8%.
Consumer confidence falls in June despite expectations for gains
The heat appears to be coming off home prices, albeit very slightly. Nationally, values rose 6.4% annually in Apr, down from a 6.5% gain the previous month, according to the S&P CoreLogic Case-Shiller National Home Price Index. The nation's 10 largest cities saw price gains of 6.2% in Apr, down from 6.4% in the previous month. The 20-City Composite posted a 6.6% year-over-year gain, down from 6.7% in the previous month. “Home prices continued their climb,” said David M. Blitzer, managing director of the Index Committee at S&P Dow Jones Indices. “Cities west of the Rocky Mountains continue to lead price increases with Seattle, Las Vegas & San Francisco ranking 1-2-3 based on price movements in the trailing 12 months. The favorable economy and moderate mortgage rates both support recent gains in housing.” The biggest factor heating home prices is the pervasive shortage of homes for sale. Supply is increasing very slightly month-to-month, but is still considerably lower than one year ago. 10 of the top 20 cities are currently higher than their peaks from 2006, not accounting for inflation. The national index is also above its last peak. “However, if one adjusts the price movements for inflation since 2006, a very different picture emerges,” noted Blitzer. “Only three cities – Dallas, Denver and Seattle – are ahead in real, or inflation-adjusted, terms. The National Index is 14 percent below its boom-time peak and Las Vegas, the city with the longest road to a new high, is 47 percent below its peak when inflation is factored in.” Demand for housing continues to outpace supply, even as mortgage rates increase. The nation's home builders saw higher sales in May, but they are still not increasing production at the rate the market needs. They are also more focused on the move-up than the entry-level
Home price gains ease in April: S&P Case-Shiller
Lennar (LEN) reported a better-than-expected quarterly profit as housing demand got a boost from a strengthening economy & job growth. Orders, an indication of future revenue for homebuilders, jumped 62.3% to 14,440 homes in the qtr. The company sold 12,095 homes, led by its eastern region, which includes Florida & NJ. The company sold 7710 homes in the qtr last year. The average sales price rose 10.4% to $413K. Deliveries & price were also helped by the acquisition of smaller rival CalAtlantic last year that increased the backlog of the combined company. Concerns about rising interest rates & construction costs have been offset by low unemployment & rising wages, combined with short supply, CEO Stuart Miller said. EPS rose to 94¢. The company had a charge of $236.8M related to purchase accounting & $23.9M in acquisition & integration costs for its CalAtlantic merger last year. Excluding items, EPS was $1.58, far above the estimate of 45¢. Revenue jumped 67.4% to $5.46B & topped the estimate for $5.11B. The stock advanced 2.39.
If you would like to learn more about LEN, click on this link:
club.ino.com/trend/analysis/stock/LEN?a_aid=CD3289&a_bid=6ae5b6f7
Lennar's profit jumps 45% on strong housing demand, sending shares sharply higher
Buyers returned, but without a lot of conviction. These are troubling times with intl trade & there will be many more announcements about changes to rules & customs which have been in place for years, even decades. After a decent gain, selling in the last hour caused the Dow to pull back about 100 from its peak. A test of 24K may be needed to see if the bulls are really in charge of this shaky market.
Dow Jones Industrials
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