Dow sank 144 (closing near session lows), decliners slightly over advancers & NAZ tumbled 107. The MLP index rose 2+ to the 277s & the REIT index was about even in the 347s. Junk bond funds were mixed & Treasuries slid lower. Oil shot up to 70 (more below) & gold lost 1 to 1230.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.17236399986518913)
US shares broadly lower as tech sector weighs on markets
More Americans signed contracts to purchase homes in Jun compared to May, but the volume of pending sales has slipped over the past year. The National Association of Realtors said that its pending home sales index rose 0.9% last month to 106.9. But on a yearly basis, pending home sales have fallen 2.5%. There are signs that home-buying has stalled in recent months due to the mix of rising prices, higher mortgage rates & a dearth of sales listings. On a monthly basis, pending sales increased in all 4 geographic regions: Northeast, Midwest, South & West. But pending sales have also tumbled in all 4 regions during the past year, especially in the Northeast & West where homes are generally more expensive. Pending sales are a barometer of home purchases that are completed a month or 2 later. After months of steady gains, the housing market has shown evidence of stalling. The Realtors said last week that completed sales of existing homes fell 0.6% in Jun from the prior month & 2.2% over the past 12 months. The median sales price rose 5.2% over the past year to $276K, about double the pace of wage gains. Sales of newly built homes tumbled 5.3% in Jun, while ground breakings also fell, according to the Commerce Dept.
Caterpillar (CAT) reported record Q2 earnings & bumped up its full-year forecast. The big machinery exporter also said it would offset a sizable H2 hit from the tariffs by raising prices. "Caterpillar delivered record second-quarter profit per share," CEO Jim Umpleby said. "Based on outstanding results in the first half of the year and continued strength in many of our end markets, Caterpillar is again raising our profit outlook for 2018." EPS were $2.82, the best Q2 EPS performance for the equipment manufacturer. It was more than double that from a year earlier, while adjusted EPS of $2.97 was nearly twice as high as the year-earlier period. The company raised its full-year EPS forecast to $11-12, an increase of 75¢ from its previous guidance. The company gave this higher forecast despite rising costs due to tariffs, with CAT saying it expects an impact of $100-200M on its material costs in H2. The company will offset those impacts with price increases this year. "Our business in China continues to be strong. We haven't seen an impact of the trade tension on our business," Umpleby said. The stock dropped 2.82.
If you would like to learn more about CAT, click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar posts record second-quarter profit, raises forecast
Pres Trump said that he would be willing to meet with Iranian Pres Rouhani "any time they want to," & that he would impose no preconditions to such a meeting. "They want to meet, I'll meet. Any time they want," Trump said. His comments came amid escalating tension between the US & Iran. Earlier this month, the pres threatened Rouhani in an all-caps post on Twitter that called out the Iranian leader by name. A meeting with Rouhani would be "good for the country, good for them, good for us, and good for the world," the pres said. It's not clear whether Iran would accept any proposed meeting, particularly given the threats the pres has issued. In Jul, Rouhani's chief of staff Mahmoud Vaezi said that Trump had asked eight times for a meeting with Rouhani & was rejected each time. Trump, whose White House has stylized him as the "ultimate negotiator and dealmaker," stressed the high stakes of any potential meeting with Rouhani. "Speaking to other people, especially when you're talking about potentials of war, and death, and famine, and lots of other things — you meet," he said. "There's nothing wrong with meeting." The pres cited his administration's negotiations with North Korean leader Kim Jong Un & Russian leader Vladimir Putin as examples of his successful bilateral negotiations.
Trump: I am ready to meet with Iran 'any time they want to' – with no preconditions
Oil prices rose back above $70 a barrel, with US crude posting its best one-day $ gain in over a month, after 4 weeks of losses for the benchmark. West Texas Intermediate crude ended the session up $1.44 (2.1%) to $70.13 a barrel. While the contract has risen in 7 of the last previous 10 sessions, it has not posted a gain of more than $1 a barrel since Jun 27. As of Fri, WTI was down more than 7% over the last 4 weeks, as heavy losses in a handful of trading sessions wiped out a string of modest daily gains for the benchmark. The contract to deliver intl benchmark Brent crude for Sep was up 83¢ (1.1%) at $75.12 a barrel (the Sep contract expires tomorrow). Trading was heavier for the Oct contract, which is up 97¢ (1.3%) at $75.73. Prices got support after Saudi Arabia announced it would suspend shipments of oil thru the critical Bab el-Mandeb Strait, after Houthi rebels in Yemen attacked a pair of oil tankers in the Red Sea. The Saudis have led a military coalition against the Iran-aligned Houthis for more than 3 years. The US & Iran have lately engaged in a war of words, with Iranian officials threatening to snarl oil exports in the world's busiest region for crude shipments. Tension is rising ahead of the first of 2 deadlines next week for intl businesses to wind down ties with Iran under renewed US sanctions.
US crude rises 2.1%, settling at $70.13, boosted by signs of tight oil supply
The Treasury expects to borrow $329B in Q3, $56B more than previously estimated, according to a statement. The new forecast includes an end-of-qtr cash balance of $350B, the largest borrowing in the Q3 since 2010 & well above the $189B borrowed one year ago. Details of the borrowing will be released Wed. One of the reasons for the increased borrowing is that the Fed is not replacing as many securities on its balance sheet once they mature, allowing some to "roll off" under its new policy of quantitative tightening. During Q2, the Treasury borrowed $72B in net marketable debt & ended with a cash balance of $333B. This was slightly lower than the $75B estimated. During Q3, Treasury said it expects to borrow $440B in net marketable debt with a cash balance of $390B.
As is typical when reporting corp earnings, the best ones tend to come early. Later ones are less impressive. After being the leader in this year's stock market, tech shares are leading the pullback. For example, FB sold off almost 4 today after taking a drubbing last week. The Dow is hanging in above 25K after largely being in the 24-25K rut for 6 months. Breaking out (that means rising above) looks to be a serious challenge for the bulls. Late day selling & the goings on in DC are making matters worse.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
Stocks fell as tech shares weighed on
the key indices & offset the effect of a record Q2 profit
from Dow stock Caterpillar (CAT). The
manufacturer which also hiked its full-year
outlook & raised its div, beat expectations, which
had been tempered by worries about the effect of tariffs on the
company's exports & also rising input costs. That success wasn't enough to lift the Dow, S&P 500 or NAZ, down more than 1% as
tech stocks struggled. Slightly more than ½ of the companies in the
S&P 500 have reported Q2 earnings & the results
are well ahead of expectations. In Europe,
Britain's FTSE 100 was trading modestly higher, while Germany's DAX &
France''s CAC40 were lower. Asian bourses closed mostly lower. On
Fri, the S&P 500 managed to post its 4rth-straight weekly
advance, as strong earnings from a number of firms helped offset an
end-of-week slide in the tech sector. Investors
parsed a mixed batch of data & earnings results over the course of
the week that broadly suggested the US economy remains strong, even as
certain industries have shown signs of weakening. Data Fri showed
the US economy grew 4.1% in Q2, the fastest pace
in nearly 4 years, though lower than the expectations. Yet
disappointing earnings from some companies put pressure on
the tech sector, sparking wild swings. Facebook (FB) logged the biggest
one-day loss in market capitalization ever Thurs after warning its
growth was slowing, while Intel (INTC), Dow stock, & Twitter (TWTR) tumbled after their earnings
failed to meet expectations.
US shares broadly lower as tech sector weighs on markets
Pres Trump said he would have
"no problem" shutting down the federal gov this year if
congressional lawmakers don't agree to provide additional border
security funding. Trump's suggestion puts him
at odds with members of his own party in Congress, where many
Reps are facing tough re-election fights this Nov. Gov funding expires at the end of Sep, just weeks before
the midterm elections. "I would have no problem
doing a shutdown," Trump said during a joint press conference at the
White House with Italian Prime Minister Giuseppe Conte. "It's time we
had border security." Asked about specific requirements, he said he had no "red line." "I'll always leave room for negotiation," Trump said.
Trump says he has 'no problem' shutting down government
More Americans signed contracts to purchase homes in Jun compared to May, but the volume of pending sales has slipped over the past year. The National Association of Realtors said that its pending home sales index rose 0.9% last month to 106.9. But on a yearly basis, pending home sales have fallen 2.5%. There are signs that home-buying has stalled in recent months due to the mix of rising prices, higher mortgage rates & a dearth of sales listings. On a monthly basis, pending sales increased in all 4 geographic regions: Northeast, Midwest, South & West. But pending sales have also tumbled in all 4 regions during the past year, especially in the Northeast & West where homes are generally more expensive. Pending sales are a barometer of home purchases that are completed a month or 2 later. After months of steady gains, the housing market has shown evidence of stalling. The Realtors said last week that completed sales of existing homes fell 0.6% in Jun from the prior month & 2.2% over the past 12 months. The median sales price rose 5.2% over the past year to $276K, about double the pace of wage gains. Sales of newly built homes tumbled 5.3% in Jun, while ground breakings also fell, according to the Commerce Dept.
US pending home sales rose 0.9 percent in June
Caterpillar (CAT) reported record Q2 earnings & bumped up its full-year forecast. The big machinery exporter also said it would offset a sizable H2 hit from the tariffs by raising prices. "Caterpillar delivered record second-quarter profit per share," CEO Jim Umpleby said. "Based on outstanding results in the first half of the year and continued strength in many of our end markets, Caterpillar is again raising our profit outlook for 2018." EPS were $2.82, the best Q2 EPS performance for the equipment manufacturer. It was more than double that from a year earlier, while adjusted EPS of $2.97 was nearly twice as high as the year-earlier period. The company raised its full-year EPS forecast to $11-12, an increase of 75¢ from its previous guidance. The company gave this higher forecast despite rising costs due to tariffs, with CAT saying it expects an impact of $100-200M on its material costs in H2. The company will offset those impacts with price increases this year. "Our business in China continues to be strong. We haven't seen an impact of the trade tension on our business," Umpleby said. The stock dropped 2.82.
If you would like to learn more about CAT, click on this link:
club.ino.com/trend/analysis/stock/CAT?a_aid=CD3289&a_bid=6ae5b6f7
Caterpillar posts record second-quarter profit, raises forecast
Pres Trump said that he would be willing to meet with Iranian Pres Rouhani "any time they want to," & that he would impose no preconditions to such a meeting. "They want to meet, I'll meet. Any time they want," Trump said. His comments came amid escalating tension between the US & Iran. Earlier this month, the pres threatened Rouhani in an all-caps post on Twitter that called out the Iranian leader by name. A meeting with Rouhani would be "good for the country, good for them, good for us, and good for the world," the pres said. It's not clear whether Iran would accept any proposed meeting, particularly given the threats the pres has issued. In Jul, Rouhani's chief of staff Mahmoud Vaezi said that Trump had asked eight times for a meeting with Rouhani & was rejected each time. Trump, whose White House has stylized him as the "ultimate negotiator and dealmaker," stressed the high stakes of any potential meeting with Rouhani. "Speaking to other people, especially when you're talking about potentials of war, and death, and famine, and lots of other things — you meet," he said. "There's nothing wrong with meeting." The pres cited his administration's negotiations with North Korean leader Kim Jong Un & Russian leader Vladimir Putin as examples of his successful bilateral negotiations.
Trump: I am ready to meet with Iran 'any time they want to' – with no preconditions
Oil prices rose back above $70 a barrel, with US crude posting its best one-day $ gain in over a month, after 4 weeks of losses for the benchmark. West Texas Intermediate crude ended the session up $1.44 (2.1%) to $70.13 a barrel. While the contract has risen in 7 of the last previous 10 sessions, it has not posted a gain of more than $1 a barrel since Jun 27. As of Fri, WTI was down more than 7% over the last 4 weeks, as heavy losses in a handful of trading sessions wiped out a string of modest daily gains for the benchmark. The contract to deliver intl benchmark Brent crude for Sep was up 83¢ (1.1%) at $75.12 a barrel (the Sep contract expires tomorrow). Trading was heavier for the Oct contract, which is up 97¢ (1.3%) at $75.73. Prices got support after Saudi Arabia announced it would suspend shipments of oil thru the critical Bab el-Mandeb Strait, after Houthi rebels in Yemen attacked a pair of oil tankers in the Red Sea. The Saudis have led a military coalition against the Iran-aligned Houthis for more than 3 years. The US & Iran have lately engaged in a war of words, with Iranian officials threatening to snarl oil exports in the world's busiest region for crude shipments. Tension is rising ahead of the first of 2 deadlines next week for intl businesses to wind down ties with Iran under renewed US sanctions.
US crude rises 2.1%, settling at $70.13, boosted by signs of tight oil supply
The Treasury expects to borrow $329B in Q3, $56B more than previously estimated, according to a statement. The new forecast includes an end-of-qtr cash balance of $350B, the largest borrowing in the Q3 since 2010 & well above the $189B borrowed one year ago. Details of the borrowing will be released Wed. One of the reasons for the increased borrowing is that the Fed is not replacing as many securities on its balance sheet once they mature, allowing some to "roll off" under its new policy of quantitative tightening. During Q2, the Treasury borrowed $72B in net marketable debt & ended with a cash balance of $333B. This was slightly lower than the $75B estimated. During Q3, Treasury said it expects to borrow $440B in net marketable debt with a cash balance of $390B.
U.S. expects to borrow $329 billion in third quarter, largest borrowing in that period in eight years
As is typical when reporting corp earnings, the best ones tend to come early. Later ones are less impressive. After being the leader in this year's stock market, tech shares are leading the pullback. For example, FB sold off almost 4 today after taking a drubbing last week. The Dow is hanging in above 25K after largely being in the 24-25K rut for 6 months. Breaking out (that means rising above) looks to be a serious challenge for the bulls. Late day selling & the goings on in DC are making matters worse.
Dow Jones Industrials
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