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)
Stocks rise on bank earnings
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
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 52.19 | +0.08 | +0.2% |
| GC=F | Gold | 1,292.30 | +3.90 | +0.0% |
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
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