Dow jumped up 208, advancers over decliners 2-1 & NAZ gained 68. The MLP index was fractionally lower in the 277s & the REIT index dropped 4 to the 354s. Junk bond funds crawled higher & Treasuries prices were lower taking the yield on the 10 year Treasury down to 3.07%. Oil lost pennies to 71 & gold added 2 to 1211.
AMJ (Alerian MLP Index tracking fund)
The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting near a 49-year low in a sign the job market remains strong. Initial claims for state unemployment benefits fell by 3K to a seasonally adjusted level of 201K for the latest week, the Labor Dept said. That's the lowest level since 1969. The forecast called for claims rising to 210K. The 4-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, declined 2K to 205K last week, the lowest level since 1969. The labor market is viewed as being near or at full employment. It continues to strengthen, with nonfarm payrolls increasing by 201K jobs in Aug & annual wage growth notching its biggest gain in more than 9 years. Job openings hit an all-time high of 6.9M in Jul. Though there have been reports of some companies either planning job cuts or laying off workers because of trade tensions between the US & its major trade partners, they have been partially offset by increased hiring in the steel industry. Economists, however, have warned of job losses if the trade tensions escalate. The claims report also showed the number of people receiving benefits after an initial week of aid fell 55K to 1.645M for the latest week, the lowest level since 1973. The 4-week moving average of continuing claims fell 20K to 1.691M, the lowest level since 1973.
US weekly jobless claims fall as labor market strength continues
US home sales flatlined in Aug but inventory increased for the first time in 3 years as the housing market continued to struggle despite strength across the broader economy. The National Association of Realtors said that existing home sales were unchanged at a seasonally adjusted annual rate of 5.34M units last month. It follows 4 straight months of monthly declines. A dearth of properties for sale has pushed up prices, sidelining many would-be homeowners. "As long as we have increased inventory, I think the housing market can turn for the better in terms of sales," NAR Chief Economist Lawrence Yun said. Supply has also been constrained by rising building material costs as well as land & labor shortages while rising mortgage rates are expected to slow demand. The Federal Reserve is expected to raise borrowing costs by a ¼ percentage point next Wed following its latest interest-rate policy meeting, the 3rd such increase this year. The forecast called for existing home sales increasing 0.3%. Existing home sales make up about 90% of home sales. Existing home sales fell 1.5% from a year ago. Across the nation's 4 regions, sales jumped 7.6% in the Northeast & there was a rise of 2.4% in the Midwest. Sales fell 5.9% in the West & 0.4% in the South. There were 1.92M homes on the market in Aug, an increase of 2.7% from one year ago. It was the first inventory increase in 3 years on a year-on-year basis. Yesterday, data showed housing starts rose 9.2% in Aug as groundbreaking on multifamily units soared, but permits were off 5.7%, the biggest decline since Feb 2017. At the Aug sales pace, it would take 4.3 months to clear the current inventory, up from 4.1 months a year ago. A supply of 6-7 months is viewed as a healthy balance between supply & demand. The median house price increased 4.6% from one year ago to $264K in Aug. It was the 4th consecutive month that prices had risen less than 5% on a yearly basis.
Existing home sales unchanged in August
China hopes the US will show sincerity & take steps to correct its behavior, its commerce ministry said, after both countries slapped new tariffs on each other's goods this week in an escalating trade war. China added $60B of US products to its import tariff list on Tues to hit back at US duties on $200B of Chinese goods that go into effect from Sep 24. Some analysts & American businesses are now concerned China could resort to other means of retaliation such as pressuring US companies operating in China. Pres Trump has threatened further retaliation if Beijing takes aim at US agricultural or industrial workers as he accused China of trying to sway US elections by targeting farmers. "China has been forced to take retaliatory measures, and they are entirely meant to protect China's own interests," commerce ministry spokesman Gao Feng said at a weekly news briefing in Beijing. "They are also meant to protect global free trade order, and have nothing to do with domestic politics in the United States." He did not directly reply to questions asking if there will be a fresh round of trade talks between Beijing & DC, which had appeared to be in the works prior to the latest tariff increases. The deepening rift between China & the US has stoked concerns about job losses on both sides of the Pacific as tariffs threaten to erode trade flows & economic growth.
China urges US to show sincerity correct behavior in trade actions
After almost 8 months, the Dow was able to reach a new intra-day record high & the NAZ is over 8K. Trade tensions are viewed as being lower or at least manageable. That sounds good, however it's difficult to think that higher tariffs are not a bother. While the bulls are back in charge, this rally looks suspicious.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 71.29 | +0.17 | +0.2% |
| GC=F | Gold | 1,211.10 | +2.80 | +0.2% |
Even with a backdrop of trade tensions, the solid
economy is winning out, & it drove the Dow to
return to the record high that it set back in Jan 26, when it closed
at 26,616. The Dow rallied aggressively in
Jan before taking a deep dive. Since Jul it has been slowly
creeping higher, boosted by the continued stream of positive economic
data. The US economy is firing on all cylinders with virtually every
American who wants to be working gainfully employed, high consumer
confidence & solid economic growth. The unemployment rate in the country is 3.9% &, according to
the most recent measure the GDP grew by 4.2% in Q2.
Dow regains record high despite trade tensions
The number of Americans filing for unemployment benefits unexpectedly fell last week, hitting near a 49-year low in a sign the job market remains strong. Initial claims for state unemployment benefits fell by 3K to a seasonally adjusted level of 201K for the latest week, the Labor Dept said. That's the lowest level since 1969. The forecast called for claims rising to 210K. The 4-week moving average of initial claims, considered a better measure of labor market trends as it irons out week-to-week volatility, declined 2K to 205K last week, the lowest level since 1969. The labor market is viewed as being near or at full employment. It continues to strengthen, with nonfarm payrolls increasing by 201K jobs in Aug & annual wage growth notching its biggest gain in more than 9 years. Job openings hit an all-time high of 6.9M in Jul. Though there have been reports of some companies either planning job cuts or laying off workers because of trade tensions between the US & its major trade partners, they have been partially offset by increased hiring in the steel industry. Economists, however, have warned of job losses if the trade tensions escalate. The claims report also showed the number of people receiving benefits after an initial week of aid fell 55K to 1.645M for the latest week, the lowest level since 1973. The 4-week moving average of continuing claims fell 20K to 1.691M, the lowest level since 1973.
US weekly jobless claims fall as labor market strength continues
US home sales flatlined in Aug but inventory increased for the first time in 3 years as the housing market continued to struggle despite strength across the broader economy. The National Association of Realtors said that existing home sales were unchanged at a seasonally adjusted annual rate of 5.34M units last month. It follows 4 straight months of monthly declines. A dearth of properties for sale has pushed up prices, sidelining many would-be homeowners. "As long as we have increased inventory, I think the housing market can turn for the better in terms of sales," NAR Chief Economist Lawrence Yun said. Supply has also been constrained by rising building material costs as well as land & labor shortages while rising mortgage rates are expected to slow demand. The Federal Reserve is expected to raise borrowing costs by a ¼ percentage point next Wed following its latest interest-rate policy meeting, the 3rd such increase this year. The forecast called for existing home sales increasing 0.3%. Existing home sales make up about 90% of home sales. Existing home sales fell 1.5% from a year ago. Across the nation's 4 regions, sales jumped 7.6% in the Northeast & there was a rise of 2.4% in the Midwest. Sales fell 5.9% in the West & 0.4% in the South. There were 1.92M homes on the market in Aug, an increase of 2.7% from one year ago. It was the first inventory increase in 3 years on a year-on-year basis. Yesterday, data showed housing starts rose 9.2% in Aug as groundbreaking on multifamily units soared, but permits were off 5.7%, the biggest decline since Feb 2017. At the Aug sales pace, it would take 4.3 months to clear the current inventory, up from 4.1 months a year ago. A supply of 6-7 months is viewed as a healthy balance between supply & demand. The median house price increased 4.6% from one year ago to $264K in Aug. It was the 4th consecutive month that prices had risen less than 5% on a yearly basis.
Existing home sales unchanged in August
China hopes the US will show sincerity & take steps to correct its behavior, its commerce ministry said, after both countries slapped new tariffs on each other's goods this week in an escalating trade war. China added $60B of US products to its import tariff list on Tues to hit back at US duties on $200B of Chinese goods that go into effect from Sep 24. Some analysts & American businesses are now concerned China could resort to other means of retaliation such as pressuring US companies operating in China. Pres Trump has threatened further retaliation if Beijing takes aim at US agricultural or industrial workers as he accused China of trying to sway US elections by targeting farmers. "China has been forced to take retaliatory measures, and they are entirely meant to protect China's own interests," commerce ministry spokesman Gao Feng said at a weekly news briefing in Beijing. "They are also meant to protect global free trade order, and have nothing to do with domestic politics in the United States." He did not directly reply to questions asking if there will be a fresh round of trade talks between Beijing & DC, which had appeared to be in the works prior to the latest tariff increases. The deepening rift between China & the US has stoked concerns about job losses on both sides of the Pacific as tariffs threaten to erode trade flows & economic growth.
China urges US to show sincerity correct behavior in trade actions
After almost 8 months, the Dow was able to reach a new intra-day record high & the NAZ is over 8K. Trade tensions are viewed as being lower or at least manageable. That sounds good, however it's difficult to think that higher tariffs are not a bother. While the bulls are back in charge, this rally looks suspicious.
Dow Jones Industrials
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