Dow shot up 547, advancers over decliners 5-1 & NAZ soared 214. The MLP index shot up 5+ to the 276s & the REIT index went up 1+ to the 333s. Junk bond funds gained & Treasuries inched higher. Oil was up pennies in the 71s & gold lost 1 to 1229 following its recent advance.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.8116015171332475)
The Senate's top Rep said that a vote on Pres Trump's NAFTA replacement won't come until 2019, potentially setting up a showdown with Dems if, as expected, they win a majority in the House. "That'll be a next year issue," Senate Majority Leader Mitch McConnell said. "There's no question this will be on the top of the agenda." Indeed, the legislative calendar for the rest of the year is tight. Lawmakers are campaigning for re-election ahead of next month's midterm election. Several other pressing issues await senators when they get back for the lame-duck session after the election, such as the farm bill & another deadline to fund the gov. The US, Mexico & Canada reached an 11th-hour deal late last month to keep much of the old North American Free Trade Agreement alive, with a few distinct changes. The updated pact, now called the USMCA, still needs to be approved by each nation's legislatures. Some Reps had been pushing for a vote on the deal this year, but it was always unlikely given the remaining priorities for this congressional term. Dems have been largely supportive of keeping NAFTA in place. Yet, if the party takes power in the House, its members could push for concessions & complicate the approval process. The GOP, meanwhile, is expected to hold onto or expand its slight majority in the Senate. Key Reps have also suggested that the refreshed trade agreement needs improvement. Sen Pat Toomey said, "there's a possibility that we could address some of these what I consider flaws in the implementing legislation that Congress has to pass."
Mitch McConnell says a vote on Trump's NAFTA replacement won't happen until next year
US homebuilders continue to face several challenges, including a severe labor shortage, but the cost of lumber is coming down. That has builders feeling better. A monthly sentiment survey from the National Association of Home Builders (NAHB) rose one point in Oct to 68 & was unchanged from Oct 2017. Anything above 50 is considered positive. "Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment," said NAHB Chair Randy Noe. "Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable." Lumber prices are falling because supplies are rising, with an approximately 5% gain in the first 4 months of this year, according to Robert Dietz, NAHB's chief economist. There has also been some relief from a Canadian rail car shortage as well as softer housing data over the summer. Of the index's 3 components, current sales conditions rose one point to 74 & sales expectations in the next 6 months increased one point to 75. Buyer traffic saw the largest gain, up 4 points to 53, crossing the line into positive territory. Despite the uptick in buyer traffic, sales have weakened for much of this year for both new & existing homes. There is strong demand, but steep price increases have knocked some buyers out of the market. "Favorable economic conditions and demographic tailwinds should continue to support demand, but housing affordability has become a challenge due to ongoing price and interest rate increases," Dietz said. "Unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019." Mortgage rates are now up more than a full percentage point compared to a year ago, weakening affordability further. Rates made their largest jump in the last 2 months & continue to move higher. Builders should benefit from a still-lean supply of existing homes for sale. However, newly built homes come at a price premium & builders are still largely focused on the move-up market, although some are starting to build more entry-level homes. Higher prices for land, labor & materials make it difficult for builders to profit off the least expensive homes.
Homebuilder sentiment improves in October as lumber prices fall
US economic outlook vs the rest of the globe is brightest in 11 years
club.ino.com/trend/analysis/stock/UNH?a_aid=CD3289&a_bid=6ae5b6f7
Strong sales of cancer drugs & a turnaround in its baby care business helped Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, Q3 earnings & revenue outpace estimates. EPS of $1.44 was up from $1.37 a year earlier. Excluding items, EPS was $2.05, above the $2.03 expected. Net sales rose 3.6% to $20.35B, surpassing expectations of $20.05B. The pharmaceuticals segment posted $10.35B in revenue, beating estimates of $10.02B. Medical device sales totaled $6.59B, missing expectations of $6.64B. The consumer business reported $3.42B in sales, above the $3.34B anticipated. "It was a strong qtr across all 3 of our segments of the business," CFO Joe Wolk said. JNJ tweaked its full-year forecast for EPS to $8.13-8.18, up slightly from the previously guided $8.07-8.17. The forecast called for full-year EPS of $8.15. The company predicts revenue of $81.0-81.4B. Analysts had expected $81.21B. In the qtr, worldwide sales of cancer drug Darzalex reached $498M, missing estimates of $538.7M. Sales of Stelara, an immunotherapy treatment for plaque psoriasis, reached $1.31B, exceeding expectations of $911M. The stock gained 2.61.
If you would like to learn moire about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
Johnson & Johnson tops third-quarter earnings, revenue estimates
Earnings season began with loud cheers from investors. Optimism from investors, corp execs & consumer is running at high levels. And more good earnings news is expected. Buying continued all day & the Dow finished close to the highs. However the intl business story is less encouraging, especially regarding US-China trade relations, & interest rates will keep rising. Trading tomorrow will test the strength of today's rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Senate's top Rep said that a vote on Pres Trump's NAFTA replacement won't come until 2019, potentially setting up a showdown with Dems if, as expected, they win a majority in the House. "That'll be a next year issue," Senate Majority Leader Mitch McConnell said. "There's no question this will be on the top of the agenda." Indeed, the legislative calendar for the rest of the year is tight. Lawmakers are campaigning for re-election ahead of next month's midterm election. Several other pressing issues await senators when they get back for the lame-duck session after the election, such as the farm bill & another deadline to fund the gov. The US, Mexico & Canada reached an 11th-hour deal late last month to keep much of the old North American Free Trade Agreement alive, with a few distinct changes. The updated pact, now called the USMCA, still needs to be approved by each nation's legislatures. Some Reps had been pushing for a vote on the deal this year, but it was always unlikely given the remaining priorities for this congressional term. Dems have been largely supportive of keeping NAFTA in place. Yet, if the party takes power in the House, its members could push for concessions & complicate the approval process. The GOP, meanwhile, is expected to hold onto or expand its slight majority in the Senate. Key Reps have also suggested that the refreshed trade agreement needs improvement. Sen Pat Toomey said, "there's a possibility that we could address some of these what I consider flaws in the implementing legislation that Congress has to pass."
Mitch McConnell says a vote on Trump's NAFTA replacement won't happen until next year
US homebuilders continue to face several challenges, including a severe labor shortage, but the cost of lumber is coming down. That has builders feeling better. A monthly sentiment survey from the National Association of Home Builders (NAHB) rose one point in Oct to 68 & was unchanged from Oct 2017. Anything above 50 is considered positive. "Builders are motivated by solid housing demand, fueled by a growing economy and a generational low for unemployment," said NAHB Chair Randy Noe. "Builders are also relieved that lumber prices have declined for three straight months from elevated levels earlier this summer, but they need to manage supply-side costs to keep home prices affordable." Lumber prices are falling because supplies are rising, with an approximately 5% gain in the first 4 months of this year, according to Robert Dietz, NAHB's chief economist. There has also been some relief from a Canadian rail car shortage as well as softer housing data over the summer. Of the index's 3 components, current sales conditions rose one point to 74 & sales expectations in the next 6 months increased one point to 75. Buyer traffic saw the largest gain, up 4 points to 53, crossing the line into positive territory. Despite the uptick in buyer traffic, sales have weakened for much of this year for both new & existing homes. There is strong demand, but steep price increases have knocked some buyers out of the market. "Favorable economic conditions and demographic tailwinds should continue to support demand, but housing affordability has become a challenge due to ongoing price and interest rate increases," Dietz said. "Unless housing affordability stabilizes, the market risks losing additional momentum as we head into 2019." Mortgage rates are now up more than a full percentage point compared to a year ago, weakening affordability further. Rates made their largest jump in the last 2 months & continue to move higher. Builders should benefit from a still-lean supply of existing homes for sale. However, newly built homes come at a price premium & builders are still largely focused on the move-up market, although some are starting to build more entry-level homes. Higher prices for land, labor & materials make it difficult for builders to profit off the least expensive homes.
Homebuilder sentiment improves in October as lumber prices fall
The US is putting more distance between itself & the rest of the world in terms of growth expectations from
professional investors. The news keeps getting worse for global
economic prospects, with respondents to the Bank of America Merrill
Lynch Fund Manager Survey for Oct now holding their dimmest view for
the future since the financial crisis. A record 85% of
market pros say the world is in the "late cycle" period of growth.
That's the highest reading since Nov 2008, just 2 months after Lehman Brothers collapsed & triggered the worst days of the depression.
That level is also a full 11 percentage points above its previous
record in Dec 2007. A net 38% expect the global economy to
decelerate over the next year. However, the view on the US is not as dour. In fact, the gap between expectations for the US economy vs. the world is at its widest since Oct 2007, right around the stock market highs before the crisis plunge. The results come just a year after global synchronized growth was one
of the market's biggest stories. Economies were thriving together for
the first time since the recession, sparking a rally in risk assets
around the world. Now, much of the global economy is sinking while the US continues to rise. The IMF recently cut its outlook
for the world economy in 2018-19 by 0.2 percentage points to 3.7%. At the same time, US GDP rose an average 3.2% in H1 & the Atlanta Fed is projecting Q3
to come in at 4%. Investors are most worried about a global trade war as the Trump administration uses tariffs
to try to close its trade deficit, particularly with China. However,
fears about the conflict are declining as respondents turn to concerns
that the Federal Reserve may make a policy mistake by tightening too
quickly. That jibes with
indications company execs have been giving during earnings calls so
far. Goldman Sachs found that during the nascent Q3
reporting period, more officials are expressing concerns about rising currencies, particularly the $, than tariff issues. The Fed has been raising rates in a gradual, steady manner & Chair Jerome Powell recently jolted markets when he said there is a good distance to go yet before rates stop increasing.
In addition to hiking its benchmark funds rate, the Fed has been
reducing the size of its balance sheet by allowing up to $50B a
month in proceeds from bonds it holds to run off in a process nicknamed
"quantitative tightening" or QT. A slowdown in China ranks 3rd among investor concerns. Stocks have been volatile
over the past 2 weeks, though the pessimism may not have reached a
point yet to turn the latest market selling around.
US economic outlook vs the rest of the globe is brightest in 11 years
UnitedHealth Group (UNH), Dow stock, added more members to its
health plans in Q3, helping it to post a profit well
above estimates & boost its earnings forecast for the
year. The largest US health insurer said it
now expects full-year adjusted EPS to approach $12.80,
compared with its prior forecast of $12.50-12.75. While
other health players are
embarking on major merger deals, UNH has doubled down on a
strategy of reining in costs & expanding its medical services group. The
insurance business added 2.8M members year-over-year in Q3 & raked in revenue of $45.94B, 12.8%
higher than last year. UNH reported a 28% rise in quarterly profit, helped by growth in its insurance & medical services businesses. EPS rose to
$3.24 in Q3,
from $2.51 a year earlier. Total revenue rose to $56.56B from $50.32B. The stock gained a big 12.32.
If you would like to learn moire about UNH, click on this link:club.ino.com/trend/analysis/stock/UNH?a_aid=CD3289&a_bid=6ae5b6f7
UnitedHealth 3Q earnings and revenue top expectations
Strong sales of cancer drugs & a turnaround in its baby care business helped Johnson & Johnson (JNJ), a Dow stock & Dividend Aristocrat, Q3 earnings & revenue outpace estimates. EPS of $1.44 was up from $1.37 a year earlier. Excluding items, EPS was $2.05, above the $2.03 expected. Net sales rose 3.6% to $20.35B, surpassing expectations of $20.05B. The pharmaceuticals segment posted $10.35B in revenue, beating estimates of $10.02B. Medical device sales totaled $6.59B, missing expectations of $6.64B. The consumer business reported $3.42B in sales, above the $3.34B anticipated. "It was a strong qtr across all 3 of our segments of the business," CFO Joe Wolk said. JNJ tweaked its full-year forecast for EPS to $8.13-8.18, up slightly from the previously guided $8.07-8.17. The forecast called for full-year EPS of $8.15. The company predicts revenue of $81.0-81.4B. Analysts had expected $81.21B. In the qtr, worldwide sales of cancer drug Darzalex reached $498M, missing estimates of $538.7M. Sales of Stelara, an immunotherapy treatment for plaque psoriasis, reached $1.31B, exceeding expectations of $911M. The stock gained 2.61.
If you would like to learn moire about JNJ, click on this link:
club.ino.com/trend/analysis/stock/JNJ?a_aid=CD3289&a_bid=6ae5b6f7
Johnson & Johnson tops third-quarter earnings, revenue estimates
Earnings season began with loud cheers from investors. Optimism from investors, corp execs & consumer is running at high levels. And more good earnings news is expected. Buying continued all day & the Dow finished close to the highs. However the intl business story is less encouraging, especially regarding US-China trade relations, & interest rates will keep rising. Trading tomorrow will test the strength of today's rally.
Dow Jones Industrials
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