Dow went up 54, decliners slightly ahead of advancers & NAZ rose 24. The MLP index was fractionally lower in the 273s & the REIT index was little changed. Junk bond funds crawled higher & Treasuries fluctuated. Oil slid lower to the 71s (more below) & gold lost 6 to 1198.
AMJ (Alerian MLP Index tracking fund)
Stocks flat ahead of Fed decision
US new home sales rebound in August, prior months revised lower
Pres Trump could decide to shut down parts of the gov in the coming days as he pushes for money to build his proposed border wall. The House is expected to pass a bill as early as today that would fund the Pentagon & a few other agencies for a year, combined with a stopgap measure to sustain the rest of the gov for a short time. It would not, however, fund Trump's proposed barrier on the US-Mexico border. The lack of cash for the project has frustrated Trump, who last week called the bill "ridiculous" & urged Reps to "GET TOUGH!" Since the Senate already approved the legislation, only his veto would stop it from becoming law if it gets through the House. Trump has waffled on the idea of shutting down the gov in recent weeks. House Speaker Paul Ryan said today that the pres told him he would sign the spending bill. Gov funding expires at 12:01 AM ET Mon.
Trump may choose to shut down the government this weekend over his border wall demands
Oil prices ease, but remain near 4-year highs
Not much for stocks to do while they wait for the announcement on rates by the Fed. Drama remains at high levels in DC. The threat of a partial gov shutdown is just one more worry for traders. This week the Dow has been struggling in what had been a good month previously.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 71.77 | -0.51 | -0.7% |
| GC=F | Gold | 1,198.70 | -6.40 | -0.5% |
Stocks were little changed ahead of the
Federal Reserve decision on interest rates & Fed Chairman Jerome
Powell's press conference. The Federal Open
Market Committee wraps-up a 2-day meeting & investors widely expect
policymakers to set in motion another increase to short-term interest
rates. Investors & economists will also be
watching Fed Chairman Jerome Powell, whose comments during his press conference may offer a better picture of plans heading into 2019 & potential concerns over the economic impact
of new import tariffs. Chinese stocks extended their recovery to hit 8-week highs as trade concerns ease & the Shanghai composite rose 0.9%. Hong Kong's Hang Seng finished the session with a gain of 1.2%. Japan's Nikkei ended the day up 0.4%. In Europe, stocks were mixed.
Stocks flat ahead of Fed decision
Sales of new US single-family homes increased
more than expected in Aug after 2 straight monthly declines, but
the underlying trend still pointed to a weakening housing market amid
rising mortgage rates & higher home prices. The
Commerce Dept said new home sales rebounded 3.5% to a seasonally adjusted annual rate of 629K units last
month. Jul's sales pace was revised down to 608K units from the
previously reported 627K units. Sales in
Jun were also much weaker than previously reported. The forecast called for new home sales, which account for about 11% of housing market sales, rising 0.5% to a pace of 630K
units in Aug. New home sales are drawn from
permits & tend to be volatile on a month-to-month basis. They
increased 12.7% from a year ago. The housing market is lagging a robust economy,
with data last week showing sales of previously owned homes flat in
Aug & building permits plunging to a more than one-year low. Economists
blame the weakness in the housing market on rising borrowing costs &
house prices, which have outstripped wage growth, making home purchasing
unaffordable for some first-time buyers. The 30-year fixed mortgage rate has increased more
than 60 basis points this year to an average of 4.65% & house
prices rose 5.9% in Jul from a year ago. With the Federal Reserve expected to raise interest rates
later today for the 3rd time this year, mortgage rates are
likely to rise further. Residential investment contracted in H1 & is expected to decline further in Q3. The
median new house price rose 1.9% to $320K in Aug from a
year ago. There were 318K new homes on the market in Aug, the most
since 2009 & up 1.6% from Jul. Supply is, however,
just over half of what it was at the peak of the housing market boom in
2006. At the Aug sales pace it would take 6.1
months to clear the supply of houses on the market, down from 6.2 months
in Jul. Nearly 2/3 of the houses sold last month were either
under construction or yet to be built.
US new home sales rebound in August, prior months revised lower
Pres Trump could decide to shut down parts of the gov in the coming days as he pushes for money to build his proposed border wall. The House is expected to pass a bill as early as today that would fund the Pentagon & a few other agencies for a year, combined with a stopgap measure to sustain the rest of the gov for a short time. It would not, however, fund Trump's proposed barrier on the US-Mexico border. The lack of cash for the project has frustrated Trump, who last week called the bill "ridiculous" & urged Reps to "GET TOUGH!" Since the Senate already approved the legislation, only his veto would stop it from becoming law if it gets through the House. Trump has waffled on the idea of shutting down the gov in recent weeks. House Speaker Paul Ryan said today that the pres told him he would sign the spending bill. Gov funding expires at 12:01 AM ET Mon.
Trump may choose to shut down the government this weekend over his border wall demands
Oil prices eased but were still
heading for a 5th consecutive qtr of gains, driven by an impending
drop in Iranian exports in the last 3 months of the year when
global demand heats up. Crude inventories rose by 1.9M
barrels in the week to Sep 21 the US Energy Information
Administration reported, compared with analyst expectations for a
decrease of 1.3M barrels. Gasoline stocks rose by
1.5M barrels, compared with expectations for a 788K-barrel gain. Distillate stockpiles, which include
diesel & heating oil, fell by 2.2M barrels, versus expectations
for a 752K-barrel increase. Brent crude futures were down 49¢ at $81.38 a barrel,
after gaining nearly 1% the previous session & Brent rose yesterday to its highest since Nov 2014 at $82.55 per barrel. US crude futures were down 49¢ at $71.79 a barrel after climbing yesterday to close at the highest level since Jul 11. The US will apply sanctions to halt oil
exports from Iran, the 3rd-largest producer in OPEC, starting on Nov 4. The pending
loss of Iranian supply has been a major factor in the recent surge in
crude prices. Several big buyers of
Iranian crude, such as a number of Indian refiners, have signaled they
will wind down their purchases, yet the exact impact of the loss of
Iranian barrels on the global market balance is not clear. US officials, including Pres Trump,
are trying to assure consumers & investors that enough supply will
remain in the oil market while requesting producers raise their output. "We will ensure prior to
the re-imposition of our sanctions that we have a well supplied oil
market," Trump's special envoy for Iran, Brian Hook, said. In an earlier speech at
the UN, Trump reiterated calls on OPEC to pump more oil and stop raising
prices. He also accused Iran of sowing chaos & promised further
sanctions on the country. The 'OPEC+' group, which includes the world's biggest producer Russia, met over the weekend but did not see the need to add new output as the market is well-supplied currently.
Oil prices ease, but remain near 4-year highs
Not much for stocks to do while they wait for the announcement on rates by the Fed. Drama remains at high levels in DC. The threat of a partial gov shutdown is just one more worry for traders. This week the Dow has been struggling in what had been a good month previously.
Dow Jones Industrials
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