Wednesday, January 16, 2019

Higher markets on early earnings reports

Dow gained 92 (but off early highs), advancers over decliners better than 3-2 & NAZ went up 10 after yesterday's big rise.  The MLP index was fractionally higher to the 248s & the REIT index rose 3+ to the 342s.  Junk bond funds crawled higher & Treasuries slid lower in price.  Oil was steady & gold added another 5 to 1293, getting close to the important 1300 ceiling.

AMJ (Alerian MLP Index tracking fund)


CL=FCrude Oil52.19
+0.08+0.2%

GC=FGold   1,292.30
+3.90+0.0%







3 Stocks You Should Own Right Now - Click Here!



Stocks were trading higher following better-than-expected profit reports from Dow stock Goldman Sachs (GS) & Bank of America (BAC).  In Europe, London's FTSE slipped 0.4%, Germany's DAX was slightly higher & France's CAC gained 0.2%.  In Asian markets today, China's Shanghai Composite ended trading flat & Hong Kong's Hang Seng finished the session up 0.3%.  Japan's Nikkei ended the day lower by 0.6%.  US stocks closed higher yesterday as rising shares of tech & biotech companies boosted major equity averages.  Shares also got an boost early in the day's trading session as the People's Bank of China said it will increase efforts this year to stimulate its economy by improving credit availability for small companies & cut taxes.  On the economic calendar, producer prices fell 0.2% last month after edging up 0.1% in Nov.  NY manufacturers reported tepid growth in Jan as the pace of new orders & shipments slowed.

Stocks rise on bank earnings

US import prices fell for a 2nd straight month in Dec as the cost of petroleum products tumbled & a strong & curbed prices of other goods, leading to the largest annual drop in more than 2 years.  The Labor Dept said import prices declined 1.0% last month after a downwardly revised 1.9% drop in Nov.  The forecast called for import prices decreasing 1.3% after a previously reported 1.6% decline in Nov.  In the 12 months thru Dec, import prices fell 0.6%, the biggest annual drop since Sep 2016.  It was also the first year-on-year decline since Oct 2016 & followed a 0.5% rise in Nov.  Import prices fell 0.6% in 2018, the first calendar year drop since 2015, after increasing 3.2% in 2017.  Coming in the wake of data showing declines in headline producer & consumer prices in Dec, the import prices report strengthens expectations of a pause in interest rate increases from the Federal Reserve in the near term.  Imported food prices edged up 0.1% after dropping 2.2% in the prior month.  Excluding fuels & food, import prices were unchanged last month after slipping 0.1% in Nov.  Import prices rose 0.6% in the 12 months thru Dec.  Core import price readings are likely being held down by the strong $, which gained about 7.5% last year against the currencies of the US main trade partners.

US import prices fall for 2nd straight month


As the partial gov shutdown enters its 4th week, the housing market has already begun to show signs of stress.  A survey conducted among 2211 members of the National Association of Realtors (NAR) found that while ¾ of respondents said contract signings & closings have proceeded without issue, 11% said that the shutdown impacted current clients, while another 11% cited an effect on prospective clients.   The most common complaint, which accounted for 25% of shutdown-related complications, was that a buyer decided not to go thru with a purchase due to the ongoing uncertainty, even though he or she was not a federal employee.  Nearly ½ of non-homeowners told the NAR they hadn't purchased a home because they could not afford to do so – another area where the shutdown could add to pain for potential homebuyers.   As previously reported, the shutdown has impacted the ability of some borrowers to get a loan for a mortgage.  While Fannie Mae & Freddie Mac are not gov agencies, & therefore will likely continue operations as normal, the Federal Housing Administration, a branch of the Dept of Housing & Urban Development, has shown some signs of delay.  Lower-income people tend to turn to the FHA for assistance because it offers as little as 3.5% down for those with a credit score of as little as 580.  Lenders for a traditional mortgage prefer a score in the 700 range.  Other borrowers in small suburbs, financing homes with mortgages backed by the Dept of Agriculture (USDA), are already running into challenges.  According to a survey from the NAR, of those affected by the gov shutdown, 17% had a closing delay because of a USDA loan, 13% had a delay due to IRS income verification & 9% had a delay due to a VA loan.  Over the weekend, the partial gov shutdown became the longest in US history.  The pres has said it could go on for months, even years.

Record shutdown's affect on the housing market


US online shoppers spent a record $126B during the holiday season, with a sizable portion of sales coming from shoppers buying items on their smartphones, according to a report by Adobe Analytics.  The sales haul marked a 16.5% increase compared to the same period one year ago.  Shoppers spent an average of more than $2B per day in Nov & Dec for the first time on record.  Smartphones accounted for 51% of traffic on online retail platforms during the period, according to Adobe, which tracks data from 80 of the top 100 US e-commerce outlets.  Roughly 1/3 of all sales revenue stemmed from smartphone purchases.  Shoppers spent $24.2B in the 5-day period between  Thanksgiving & Cyber Monday, marking a 23% year-over-year increase.  Major online holiday sales events on Black Friday & Cyber Mon broke existing records, drawing $6.2B & $7.9B, respectively.  Top-selling items for online retailers included blockbuster video games, streaming devices & Fingerlings dolls.  Online shoppers spent $108.2B during the previous online holiday shopping season.

US online holiday sales hit record $126B as smartphones drive traffic


Traders seem to be dazzled by early earnings reports.  However more are coming & they have to be written.  The economy is beginning to stumble.  Holiday retail sales look good but they are history.  This is a new year & the gov shutdown, WHICH IS GOING NOWHERE FAST, is pinching harder.  This month & next month may be gloomier than investors have become used to.  Even as stocks have risen recently, demand for safe haven gold continues strong.

Dow Jones Industrials








No comments: