Dow sank 290, decliners over aqdvancers about 5-1 & NAZ lost 79. The MLP index was off 3 to the 273s & the REIT index recovered 6+ to the 339s. Junk bond funds slid lower & Treasuries were steady. Oil fell 1+ to 70 on reports of increased supply & gold inched up 1 to 1232.
AMJ (Alerian MLP Index tracking fund)
Stocks give back some gains
US housing starts fall more than expected in September
Commerce Secretary Wilbur Ross said that US-China trade talks are on hiatus. "It appears as though we may be in something of a hiatus now," Ross said. Ross noted that "in any negotiation there are ups and downs," but suggested that talks had entered an inactive period. "I don't know that I would call it a continued impasse," he added. "We are where we are." The US & China, the world's 2 largest economies, have been engaged for months in a trade dispute. On Sun, Trump''s top economic advisor Larry Kudlow said the relationship between the 2 countries "has not been positive lately." American & Chinese officials have suggested that the leaders of the 2 countries may be able to advance talks at the upcoming G-20 summit in Argentina. Asked about that possibility, Ross suggested it was unlikely that much would be accomplished there. "Meetings of world leaders at the G-20 never get into huge amounts of detail," Ross said. "You can't do a multi-thousand page trade agreement in an hour," he added.
US trade talks with China on 'hiatus,' Commerce Secretary Ross says
The bulls were not able to keep the momentum going after a report that US-China trade talks are going nowhere. Earnings should continue strong but the dark clouds of trade issues & higher interest rates are not going away any time soon. One plus going forward, rebuilding in the south will be a plus for homebuilders in the coming months. The Dow is down about 1K in Oct.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 70.80 | -1.12 | -1.6% |
| GC=F | Gold | 1,232.10 | +1.10 | +0.1% |
Stocks fell on, giving back some of yesterday's gains that were driven by a batch of positive earnings reports. While stocks have been pulled lower in recent
weeks by rising Treasury yields, earnings season kicked off in earnest
this week, & at least, on that gave investors something else
to sink their teeth into. Analysts are expecting another big earnings
season, with Goldman Sachs forecasting S&P 500 to experience 21% earnings per share growth in Q3. Earnings
continued to stream in today, while traders digested the latest
economic data reports, which included Sep housing starts, which
came in below expectations. Also, the Federal Reserve will release the minutes of the most recent
policy setting meeting in which interest rates were increased.
Stocks give back some gains
US homebuilding dropped more than expected in Sep as construction activity in the South fell by the most in nearly 3 years, likely held down by Hurricane Florence. Housing
starts dropped 5.3% to a seasonally adjusted annual rate of 1.201M units last month, the Commerce Dept said. Data for Aug was revised down to show starts rising to a rate of
1.268M units instead of the previously reported pace of 1.282M units. Starts in the South, which
accounts for the bulk of homebuilding, tumbled 13.7% last month, the biggest decline since Oct 2015. Hurricane Florence
slammed North & South Carolina in mid-Sep & flooding from the
storm probably depressed homebuilding last month. Building
permits fell 0.6% to a rate of 1.241M units in Sep.
That was the 2nd straight monthly decline in permits & suggested
homebuilding is likely to remain tepid. The forecast called for housing starts declining to a pace
of 1.22M units last month. Starts surged 29% in the
Northeast & rose 6.6% in the West while they fell 14.0% in
the Midwest. The housing market has been a weak
spot in a robust economy. The sluggishness is blamed on rising
mortgage rates, which have combined with higher house prices to make
home purchasing unaffordable for some first-time buyers. The 30-year fixed mortgage rate jumped 19 basis
points to 4.90% last week, the highest level since 2011, according to data from mortgage finance agency Freddie Mac. The
mortgage rate has risen about 91 basis points this year. Single-family
homebuilding, which accounts for the largest share of the housing
market, decreased 0.9% to a rate of 871K units in Sep.
Single-family homebuilding has lost momentum since hitting a pace of
948K units last Nov, which was the strongest in more than 10
years. A survey on yesterday showed confidence
among single-family homebuilders rose in Oct, but builders said
"housing affordability has become a challenge due to ongoing price and
interest rate increases." Permits to build
single-family homes rose 2.9% in Sep to a pace of 851K
units. They, however, remain below the level of single-family starts,
suggesting limited scope for a strong rebound in homebuilding. Starts
for the volatile multi-family housing segment plunged 15.2% to a
rate of 330K units in Sep. Permits for the construction of
multi-family homes declined 7.6% to a pace of 390K units.
US housing starts fall more than expected in September
Dems may be anticipating a massive blue wave
during the Nov midterm elections, but according to Pres Trump,
the strong US economy will likely propel Reps to victory. “History
says that whoever’s president always seems to lose the midterm,” Trump
said. “No
one had the economy that we do. We have the greatest economy that we’ve ever had.” Although
critics of the White House often credit the roaring economy to the
Obama administration – including former Pres Obama, who in
Sep said the economic recovery began while he was in the White
House – Trump warned that if the “opposition” had won the 2016
presidential election, there would be more rules & regulations in
place. “They would’ve done things with taxes
that would’ve been a disaster,” he added. “Raised taxes, they were all going to raise taxes.” In Dec, Trump signed into law a
business-friendly tax overhaul (the largest since Ronald Reagan was in
the Oval Office) that permanently slashed the corp tax rate to 21% from 35%. In Q2, the US economy advanced by a rate of 4.2%, the
strongest since Q3-2014. An up-to-date tracker monitored by the Federal Reserve Bank of Atlanta, is currently estimating Q3 growth of 4%. “We
had 4.2 percent last quarter, and everybody said that’s impossible,”
Trump said. “Had the opposition gotten in, you would be at minus 4.2
[percent]. You would be so low, you would have job numbers that would be
so bad, you would have companies leaving this country. They were
flowing out of this country, now they’re flowing in. Whenever I hear
that, I say, ‘Isn’t it sad?’” Fed Chair Jerome
Powell has also signaled an optimistic note on the economy, saying in early Oct that the combination of
record-low unemployment & low inflation shows the country is going
thru “extraordinary times.” He maintained the central bank's position
of gradually raising interest rates.
We have the 'greatest economy' ever, president says
Commerce Secretary Wilbur Ross said that US-China trade talks are on hiatus. "It appears as though we may be in something of a hiatus now," Ross said. Ross noted that "in any negotiation there are ups and downs," but suggested that talks had entered an inactive period. "I don't know that I would call it a continued impasse," he added. "We are where we are." The US & China, the world's 2 largest economies, have been engaged for months in a trade dispute. On Sun, Trump''s top economic advisor Larry Kudlow said the relationship between the 2 countries "has not been positive lately." American & Chinese officials have suggested that the leaders of the 2 countries may be able to advance talks at the upcoming G-20 summit in Argentina. Asked about that possibility, Ross suggested it was unlikely that much would be accomplished there. "Meetings of world leaders at the G-20 never get into huge amounts of detail," Ross said. "You can't do a multi-thousand page trade agreement in an hour," he added.
US trade talks with China on 'hiatus,' Commerce Secretary Ross says
The bulls were not able to keep the momentum going after a report that US-China trade talks are going nowhere. Earnings should continue strong but the dark clouds of trade issues & higher interest rates are not going away any time soon. One plus going forward, rebuilding in the south will be a plus for homebuilders in the coming months. The Dow is down about 1K in Oct.
Dow Jones Industrials
No comments:
Post a Comment