Dow rose 82 (still 200+ below its early highs), decliners ahead of advancers 5-4 & NAZ went up 30. The MLP index sank another big 5+ to the 229s & the REIT index dropped to the 338s. Junk bond funds fluctuated & Treasuries were in demand again. Oil sold off to the 46s (more below on these brutal day for oil) & gold added 1 to 1253.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The White House suggested that Pres Trump could back down from his demand for $5B to fund his proposed border wall in a year-end spending bill. Trump's push for the money has threatened a partial gov shutdown when funding for 7 agencies lapses after midnight Fri. Last week, the pres said he would be "proud" to close parts of the gov over border security. "We have other ways that we can get to that $5 billion that we'll work with Congress," White House press secretary Sarah Huckabee Sanders said. She added that the Trump administration could support $1.6B in border security funding proposed by Senate Dems, as long as it can "couple that with other funding resources" to get to $5B She added that "at the end of the day, we don't want to shut down the government. We want to shut down the border." Senate Minority Leader Chuck Schumer & House Minority Leader Nancy Pelosi have cast the potential lapse in funding as the "Trump shutdown." When Pelosi goaded Trump into an Oval Office fracas last week, the characterization appeared to irritate the pres. Sanders' comments mark a de-escalation in the White House's rhetoric on the proposed barrier on the US-Mexico border. Trump has repeatedly threatened to force a shutdown if he cannot secure money for the wall. Still, Trump himself has not weighed in today on how much money he would accept. As always, a comment or tweet from the pres could trample on the message administration officials try to send. Later today, Sanders put the burden on Congress to find a solution, even though GOP lawmakers have said they do not know what Trump would accept. The White House wants to "see what the Senate can pass," she said. Then, the administration will "make a determination" on whether to sign it. She added that Trump has directed agencies to see if they have money to put toward border security, though it is unclear which departments would fund it other than DHS.
Each new housing data point is worse than the last & they are prompting a leading industry analysts to say the market is in a correction. Single-family housing starts fell more than 13% last month from a year earlier, according to the US Census. Building permits, an indicator of future construction, were down nearly 2%. This followed a sharp drop in homebuilder sentiment to the lowest level in more than 3 years, according to the National Association of Home Builders (NAHB). Builders cannot hit the lower prices because of higher costs for land, labor & materials. While they might be able to build cheaper homes farther outside major metropolitan areas, doing so is risky, given that demand there is so weak. Multifamily housing starts, meanwhile, surged 20% last month compared with Nov 2017. While this monthly reading tends to be volatile, it indicates that the rental market will remain strong for the foreseeable future. Adding to the frustration in the housing market is a stagnation among sellers. Evan though supply is rising slowly because sales are slowing, there are still few new listings coming onto the market. Current homeowners either can't afford a new home or don't want to pay a higher mortgage interest rate on a new home. This is hitting homebuilders as well. The average rate on the 30-year fixed mortgage is hovering around 5%. While homebuilders are still not ramping up entry-level supply, they are starting to cut prices. A new survey from the NAHB, which has yet to be released, found 41% of builders reported reducing prices as a sales incentive for Jul-Oct, up from 26% a year earlier.
Oil prices plunged about 7% to a more than 15-month low as the US & Russia continue to pump at record levels even as analysts warn that signs of faltering demand are emerging. West Texas Intermediate crude ended the session down a whopping $3.64 (7.3%) at $46.24. Losses accelerated ahead of WTI's settlement, with the contract closing at its lowest level since Aug 2017. US crude continued to plunge after the settle, falling nearly 8% below $46 a barrel. Brent crude, the intl benchmark for oil prices, fell $3.35 (5.6%) to $56.26, a 14-month closing low. From peak to trough, WTI has lost 40% of its value since hitting a roughly 4-year high in early Oct. The slump has brought WTI's YTD losses to more than 23%. Brent has fallen as much as 35% since its Oct high & is down 16% in 2018. This month, oil output from US shale fields is set to rise above 8M barrels per day (bpd) for the first time ever, the Energy Information Administration reported yesterday. Production from the 7 key regions is forecast to rise by nearly 134K bpd in Jan, the biggest increase since Sep. US crude futures fell sharply lower yesterday after energy data firm Genscape reported that crude stockpiles at a closely watched storage hub in the Cushing, Oklahoma rose more than 1M barrels. Meanwhile, sources said Russia is pumping at 11.42M bpd this month, a level that would mark an all-time high if confirmed. Russia is the largest producer in an alliance of 10 oil-exporting countries that reached an agreement with OPEC to cut output earlier this month. The roughly 2 dozen producers began limiting their output last year in order to drain a global crude glut. The alliance eased off those caps earlier this year, but now that crude stockpiles are once again on the rise, the producers are launching another round of supply cuts that aim to take 1.2M bpd off the market. However, the cutbacks do not go into effect until Jan & Russia has warned that it will only gradually taper off output. Oil was also dragged lower by a tumble in US stock markets yesterday.
US crude plunges 7.3% to $46.24, lowest settle since August 2017, on oversupply concerns
In early Oct the Dow reached a new record high. Since then it has had an unusually bumpy time & is now trading at its lowest since Nov 2017 (on the way up). After giving up its gains in the AM today, a rally (if that's what you call it) in the last hour put it the black. These are not good times for investors with the worst Dec since 1931. That's saying something. Even a favorable announcement by the Fed tomorrow is not going to solve the many problems investors are concerned with. The basic reason oil is at its lows is on fears about global growing slowing next year! Not good for stocks.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The White House suggested that Pres Trump could back down from his demand for $5B to fund his proposed border wall in a year-end spending bill. Trump's push for the money has threatened a partial gov shutdown when funding for 7 agencies lapses after midnight Fri. Last week, the pres said he would be "proud" to close parts of the gov over border security. "We have other ways that we can get to that $5 billion that we'll work with Congress," White House press secretary Sarah Huckabee Sanders said. She added that the Trump administration could support $1.6B in border security funding proposed by Senate Dems, as long as it can "couple that with other funding resources" to get to $5B She added that "at the end of the day, we don't want to shut down the government. We want to shut down the border." Senate Minority Leader Chuck Schumer & House Minority Leader Nancy Pelosi have cast the potential lapse in funding as the "Trump shutdown." When Pelosi goaded Trump into an Oval Office fracas last week, the characterization appeared to irritate the pres. Sanders' comments mark a de-escalation in the White House's rhetoric on the proposed barrier on the US-Mexico border. Trump has repeatedly threatened to force a shutdown if he cannot secure money for the wall. Still, Trump himself has not weighed in today on how much money he would accept. As always, a comment or tweet from the pres could trample on the message administration officials try to send. Later today, Sanders put the burden on Congress to find a solution, even though GOP lawmakers have said they do not know what Trump would accept. The White House wants to "see what the Senate can pass," she said. Then, the administration will "make a determination" on whether to sign it. She added that Trump has directed agencies to see if they have money to put toward border security, though it is unclear which departments would fund it other than DHS.
Each new housing data point is worse than the last & they are prompting a leading industry analysts to say the market is in a correction. Single-family housing starts fell more than 13% last month from a year earlier, according to the US Census. Building permits, an indicator of future construction, were down nearly 2%. This followed a sharp drop in homebuilder sentiment to the lowest level in more than 3 years, according to the National Association of Home Builders (NAHB). Builders cannot hit the lower prices because of higher costs for land, labor & materials. While they might be able to build cheaper homes farther outside major metropolitan areas, doing so is risky, given that demand there is so weak. Multifamily housing starts, meanwhile, surged 20% last month compared with Nov 2017. While this monthly reading tends to be volatile, it indicates that the rental market will remain strong for the foreseeable future. Adding to the frustration in the housing market is a stagnation among sellers. Evan though supply is rising slowly because sales are slowing, there are still few new listings coming onto the market. Current homeowners either can't afford a new home or don't want to pay a higher mortgage interest rate on a new home. This is hitting homebuilders as well. The average rate on the 30-year fixed mortgage is hovering around 5%. While homebuilders are still not ramping up entry-level supply, they are starting to cut prices. A new survey from the NAHB, which has yet to be released, found 41% of builders reported reducing prices as a sales incentive for Jul-Oct, up from 26% a year earlier.
Oil prices plunged about 7% to a more than 15-month low as the US & Russia continue to pump at record levels even as analysts warn that signs of faltering demand are emerging. West Texas Intermediate crude ended the session down a whopping $3.64 (7.3%) at $46.24. Losses accelerated ahead of WTI's settlement, with the contract closing at its lowest level since Aug 2017. US crude continued to plunge after the settle, falling nearly 8% below $46 a barrel. Brent crude, the intl benchmark for oil prices, fell $3.35 (5.6%) to $56.26, a 14-month closing low. From peak to trough, WTI has lost 40% of its value since hitting a roughly 4-year high in early Oct. The slump has brought WTI's YTD losses to more than 23%. Brent has fallen as much as 35% since its Oct high & is down 16% in 2018. This month, oil output from US shale fields is set to rise above 8M barrels per day (bpd) for the first time ever, the Energy Information Administration reported yesterday. Production from the 7 key regions is forecast to rise by nearly 134K bpd in Jan, the biggest increase since Sep. US crude futures fell sharply lower yesterday after energy data firm Genscape reported that crude stockpiles at a closely watched storage hub in the Cushing, Oklahoma rose more than 1M barrels. Meanwhile, sources said Russia is pumping at 11.42M bpd this month, a level that would mark an all-time high if confirmed. Russia is the largest producer in an alliance of 10 oil-exporting countries that reached an agreement with OPEC to cut output earlier this month. The roughly 2 dozen producers began limiting their output last year in order to drain a global crude glut. The alliance eased off those caps earlier this year, but now that crude stockpiles are once again on the rise, the producers are launching another round of supply cuts that aim to take 1.2M bpd off the market. However, the cutbacks do not go into effect until Jan & Russia has warned that it will only gradually taper off output. Oil was also dragged lower by a tumble in US stock markets yesterday.
US crude plunges 7.3% to $46.24, lowest settle since August 2017, on oversupply concerns
In early Oct the Dow reached a new record high. Since then it has had an unusually bumpy time & is now trading at its lowest since Nov 2017 (on the way up). After giving up its gains in the AM today, a rally (if that's what you call it) in the last hour put it the black. These are not good times for investors with the worst Dec since 1931. That's saying something. Even a favorable announcement by the Fed tomorrow is not going to solve the many problems investors are concerned with. The basic reason oil is at its lows is on fears about global growing slowing next year! Not good for stocks.
Dow Jones Industrials
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