Dow inched up 5, advancers ahead of decliners 5-2 & NAZ went up 31. The MLP index
& the REIT index was off 1+ to the 372s on profit taking. Junk bond funds rose in price & Treasuries dipped slightly. Oil climbed to the 59s & gold added 1 to 1304.
AMJ (Alerian MLP Index tracking fund
Homebuilder sentiment holds steady despite a decline in mortgage rates
There’s no doubt the economy is laboring through a tough stretch. The big question is whether it gets worse before it gets better. Bet on growth speeding up. The economy has repeatedly started a new year off slowly since the US exited its last recession in mid-2009. And growth has usually picked up in the spring. The same pattern seems ready to re-emerge & early hints might come this week from the first batch of reports on how the economy is performing in Mar. GDP, the official scorebook for the economy, is forecast to accelerate to a 2.5% annual pace in the spring from an estimated 1.5% in Q1. Pretty good, if it works out that way, but not as good as last year. GDP soared to 4.2% in Q2-2018 after growing just ½ as fast in the opening 3 months. The main difference between this year and last? There’s no big tax cuts or spending increases on tap in DC. The economy got a big boost last spring thru the generous hand of Congress & the White House. Still, the economy isn't exactly suffering from a lack of support. The Federal Reserve, for example, announced in late Jan it was scrapping plans to raise interest rates again anytime soon. That caused interest rates on business loans, mortgage & other consumer goods to tumble. Look for home sales in particular to perk up again. The stock market meanwhile, has recovered from a harrowing plunge in Dec. Consumer confidence rebounded after the market meltdown & partial gov shutdown. And the unemployment rate slipped to 3.8% in Feb, reflecting the strongest labor market in decades. A robust labor market all but assures households will continue to drive the economy forward. Consumers have been spending a bit less than they've earned the past several months, but that’s unlikely to last.
Chinese Pres Xi Jinping will visit Italy, France & Monaco from Thurs-Mar 26, the foreign ministry said. Italy's coalition government has sent mixed signals over whether it will sign a proposed agreement to join China's T$ Belt & Road infrastructure investment drive. The initiative aims to expand commerce by building ports, railways & other infrastructure across more than 60 countries from the South Pacific thru Asia to Europe & Africa. Projects under the initiative have faced complaints that they leave host countries with too much debt, & with too little work going to local companies. Italy's Undersecretary of State Guglielmo Picchi tweeted earlier this month that Italy should not sign the agreement.
Not much to do today. Traders are waiting for the Fed to speak at mid week, although excitement is not expected. Trade talks keep dragging on & a final deal looks to be down the road. The US economy is stumbling along, growing but at a soggy rate in Q1. Q2 should show an improvement (hopefully). The Dow continues to trend sideways near its record highs because the bulls remain optimistic.
Dow Jones Industrials
& the REIT index was off 1+ to the 372s on profit taking. Junk bond funds rose in price & Treasuries dipped slightly. Oil climbed to the 59s & gold added 1 to 1304.
AMJ (Alerian MLP Index tracking fund
| CL=F | Crude Oil | 58.85 | +0.33 | +0.6% |
| GC=F | Gold | 1,305.40 | +2.50 | +0.2% |
The nation's homebuilders are feeling positive about their business, but not as much as they did a year ago. A
monthly sentiment measure held steady at 62 from Feb to Mar,
according to the National Association of Home Builders/Wells Fargo
Housing Market Index (NAHB). The index stood at 70 in Mar 2018. Anything
above 50 is considered positive. “Builders report the market is stabilizing following the slowdown at
the end of 2018, and they anticipate a solid spring home buying season,”
said NAHB Chairman Greg Ugalde. Mortgage rates rose throughout most of
last year but have since fallen to below year-ago levels. That should
help make all homes more affordable, but new homes come at a higher
price than similar existing ones. Weak affordability has been the
biggest problem in the new home market, as builders have largely focused
on move-up homes rather than cheaper entry-level products. The median
price of a new home sold in Jan was down nearly 4% annually,
according to the US Census. That was not necessarily because builders
were lowering prices, but because a larger share of entry-level homes
sold that month. Sales in Jan fell to a 3-month low. “More builders are saying that lower price points are selling well, and
this was reflected in the government’s new home sales report released
last week,” said Robert Dietz, NAHB's chief economist. “Increased
inventory of affordably priced homes — in markets where government
policies support such construction — will enable more entry-level buyers
to enter the market.” Builders say they continued to have trouble
building lower-priced homes, however, due to shortages of skilled labor & buildable lots. Of
the index's 3 components, sales expectations in the next 6 months
rose 3 points over the past month to 71, current sales conditions
increased 2 points to 68 & traffic of prospective buyers fell 4
to 44 . Buyer traffic has been in negative territory for several
months. Looking at 3-month moving averages, builder sentiment
in the Northeast rose 5 to 48, the South was up 3 to 66 & the West increased 2 to 69. Sentiment in the Midwest fell 1 to 51.
Homebuilder sentiment holds steady despite a decline in mortgage rates
There’s no doubt the economy is laboring through a tough stretch. The big question is whether it gets worse before it gets better. Bet on growth speeding up. The economy has repeatedly started a new year off slowly since the US exited its last recession in mid-2009. And growth has usually picked up in the spring. The same pattern seems ready to re-emerge & early hints might come this week from the first batch of reports on how the economy is performing in Mar. GDP, the official scorebook for the economy, is forecast to accelerate to a 2.5% annual pace in the spring from an estimated 1.5% in Q1. Pretty good, if it works out that way, but not as good as last year. GDP soared to 4.2% in Q2-2018 after growing just ½ as fast in the opening 3 months. The main difference between this year and last? There’s no big tax cuts or spending increases on tap in DC. The economy got a big boost last spring thru the generous hand of Congress & the White House. Still, the economy isn't exactly suffering from a lack of support. The Federal Reserve, for example, announced in late Jan it was scrapping plans to raise interest rates again anytime soon. That caused interest rates on business loans, mortgage & other consumer goods to tumble. Look for home sales in particular to perk up again. The stock market meanwhile, has recovered from a harrowing plunge in Dec. Consumer confidence rebounded after the market meltdown & partial gov shutdown. And the unemployment rate slipped to 3.8% in Feb, reflecting the strongest labor market in decades. A robust labor market all but assures households will continue to drive the economy forward. Consumers have been spending a bit less than they've earned the past several months, but that’s unlikely to last.
The U.S. economy is off to another shaky start in 2019, but it’s not about to collapse
Chinese Pres Xi Jinping will visit Italy, France & Monaco from Thurs-Mar 26, the foreign ministry said. Italy's coalition government has sent mixed signals over whether it will sign a proposed agreement to join China's T$ Belt & Road infrastructure investment drive. The initiative aims to expand commerce by building ports, railways & other infrastructure across more than 60 countries from the South Pacific thru Asia to Europe & Africa. Projects under the initiative have faced complaints that they leave host countries with too much debt, & with too little work going to local companies. Italy's Undersecretary of State Guglielmo Picchi tweeted earlier this month that Italy should not sign the agreement.
China's Xi to make 3-nation Europe visit starting Thursday
Not much to do today. Traders are waiting for the Fed to speak at mid week, although excitement is not expected. Trade talks keep dragging on & a final deal looks to be down the road. The US economy is stumbling along, growing but at a soggy rate in Q1. Q2 should show an improvement (hopefully). The Dow continues to trend sideways near its record highs because the bulls remain optimistic.
Dow Jones Industrials
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