Dow rose 67, advancers over decliners about 2-1 & NAZ & gained 43. The MLP index bounced back 1+ to the 207s (still very depressed) & the REIT index went up 1+ to 400. Junk bond funds were mix\ed & Treasuries saw limited buying. Oil climbed to the 57s & gold dropped another 5 to 1451 (a low since early Aug).
AMJ (Alerian MLP Index tracking fund)
A pivotal 2 weeks for the US-Mexico-Canada Agreement, President Trump's overhaul of the Clinton-era NAFTA deal, starts today as House member return from a long Veterans Day weekend. Rep Richard Neal, whom Speaker Nancy Pelosi appointed to lead a working group tasked with resolving differences between House Dems & the Trump administration on the pact, wants to move it to the Senate before Thanksgiving, according to House Agriculture Chair Rep. Collin Peterson. That gives House members less than 10 voting days to approve the agreement. The Rep-controlled Senate would have to sign off by its Dec 13 adjournment date for the pact to be approved by year's end. "[Neal] is pushing hard," Peterson said last week on the passage of the agreement is a priority for the Trump administration, which promised to buoy the US economy by improving a variety of intl trade deals. Reps in the House failed to approve the proposal before losing their majority in mid-term elections in 2018, & Trump has criticized Dems who took over afterward for moving slower than he wants while focusing on an impeachment inquiry. House Speaker Nancy Pelosi "fiddles while the USMCA is in the deep freeze," White House trade adviser Peter Navarro said in Oct. "The false narrative here is this whole issue about labor enforcement. That problem's effectively been solved." The pact requires 75% of automobile components to be manufactured in the US, Canada & Mexico in order to avoid tariffs, & 40-45% of automobile parts to be made by workers who earn at least $16 an hour by 2023. Pelosi & House Dems have raised concerns about enforcement of the $16 an hour wage. To move USMCA forward, Neal has floated tying it to the Butch Lewis Act, his multiemployer pension bailout bill that passed the House in Jul. Leaders from the 3 countries negotiating the deal signed as a precursor to their legislatures ratifying it. Mexico ratified the deal in Jun, while Canada appears on track to ratify the deal in its new parliament.
Hong Kong is on the brink of a “total breakdown,” according to a police spokesperson, & how China handles the situation could potentially impact a trade deal with the US. The human rights issues in Hong Kong & Xinjiang province are “part of the conversation,” Marc Short, chief of staff to VP Mike Pence, said. “There’s a recognition that we can’t decouple the economies entirely and so yes, we are speaking out and saying we want to see these abuses fixed, but it’s not a retreat that says we still can’t have trade deals,” he said, adding that the administration wants to make sure that “so many of the things China has done on the economic front, from cheating on trade deals and devaluing its currency” are resolved. The pro-democracy protests have stretched into their 5th month & are showing no signs of slowing down. Yesterday, a few thousand protestors took over several blocks in the city's financial district, blocking roads & snarling traffic. Protests on Mon resulted in the shooting of one demonstrator, who is in serious condition, & the arrest of more than 260. Hong Kong's economy entered a recession in Q3 as the violence has deterred tourists from visiting the city. Q3 GDP fell 3.2%, the biggest drop since the financial crisis. That followed a 0.4% contraction in Q2. A recession occurs when there are 2 consecutive qtrs of negative growth. “I think that we agree that they need to make sure that the agreement they signed with the Brits is maintained and protected and I think that is an indication to how they will conduct other agreements across the globe in other trade deals and in other agreements,” Short said.
DR Horton (DHI) reported better-than-expected fiscal Q4 earnings, giving the stock a boost that continues its momentum this year. Reported EPS of $1.35 was above the forecast for $1.25. Its $5B in revenue surpassed expectations for $4.8B. For the year, EPS rose 13% & sales orders were up 7%. DHI is benefiting from pent-up demand for new housing because US construction has been below historical levels since the recession. That is now starting to change. Housing starts were up 8% in Sep on a year-over-year basis as the real-estate market has begun to rise back to pre-recession levels. The company's broad geographic footprint & mix of home prices give it an advantage as demand picks up, according to CEO Donald R Horton. “Over the last five years, we have grown our revenues by 119% and our earnings per share by 186%, while also generating $4 billion of cash flows from homebuilding operations, significantly increasing returns on inventory and equity and reducing our debt,” he said. Mortgage rates are also low, making it easier for potential buyers to afford homes. The average rate on a 30-year fixed-rate mortgage is still below 4% despite rising over the past month. DHI expects to increase the number of sales that close in the new fiscal year of 60-61K, up from 56,975 in 2019. Revenue should rise to $18.5-19B from $17.6B. It also expects to cut its share count by about 2% by buying back stock. The stock rose 76¢.
If you would like to learn more about DHI, click on this link:
club.ino.com/trend/analysis/stock/DHI?a_aid=CD3289&a_bid=6ae5b6f7
Market averages keep climbing to record highs & Trump's speech shortly will probably bring out more stock buyers. Since Trump's inauguration, there have been 100 record closes & that trend should continue today.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 57.42 | +0.56 | +1.0% |
| GC=F | Gold | 1,452.90 | -4.20 | - 0.3% |
A pivotal 2 weeks for the US-Mexico-Canada Agreement, President Trump's overhaul of the Clinton-era NAFTA deal, starts today as House member return from a long Veterans Day weekend. Rep Richard Neal, whom Speaker Nancy Pelosi appointed to lead a working group tasked with resolving differences between House Dems & the Trump administration on the pact, wants to move it to the Senate before Thanksgiving, according to House Agriculture Chair Rep. Collin Peterson. That gives House members less than 10 voting days to approve the agreement. The Rep-controlled Senate would have to sign off by its Dec 13 adjournment date for the pact to be approved by year's end. "[Neal] is pushing hard," Peterson said last week on the passage of the agreement is a priority for the Trump administration, which promised to buoy the US economy by improving a variety of intl trade deals. Reps in the House failed to approve the proposal before losing their majority in mid-term elections in 2018, & Trump has criticized Dems who took over afterward for moving slower than he wants while focusing on an impeachment inquiry. House Speaker Nancy Pelosi "fiddles while the USMCA is in the deep freeze," White House trade adviser Peter Navarro said in Oct. "The false narrative here is this whole issue about labor enforcement. That problem's effectively been solved." The pact requires 75% of automobile components to be manufactured in the US, Canada & Mexico in order to avoid tariffs, & 40-45% of automobile parts to be made by workers who earn at least $16 an hour by 2023. Pelosi & House Dems have raised concerns about enforcement of the $16 an hour wage. To move USMCA forward, Neal has floated tying it to the Butch Lewis Act, his multiemployer pension bailout bill that passed the House in Jul. Leaders from the 3 countries negotiating the deal signed as a precursor to their legislatures ratifying it. Mexico ratified the deal in Jun, while Canada appears on track to ratify the deal in its new parliament.
Trump's US-Mexico trade deal faces final showdown in Congress
Hong Kong is on the brink of a “total breakdown,” according to a police spokesperson, & how China handles the situation could potentially impact a trade deal with the US. The human rights issues in Hong Kong & Xinjiang province are “part of the conversation,” Marc Short, chief of staff to VP Mike Pence, said. “There’s a recognition that we can’t decouple the economies entirely and so yes, we are speaking out and saying we want to see these abuses fixed, but it’s not a retreat that says we still can’t have trade deals,” he said, adding that the administration wants to make sure that “so many of the things China has done on the economic front, from cheating on trade deals and devaluing its currency” are resolved. The pro-democracy protests have stretched into their 5th month & are showing no signs of slowing down. Yesterday, a few thousand protestors took over several blocks in the city's financial district, blocking roads & snarling traffic. Protests on Mon resulted in the shooting of one demonstrator, who is in serious condition, & the arrest of more than 260. Hong Kong's economy entered a recession in Q3 as the violence has deterred tourists from visiting the city. Q3 GDP fell 3.2%, the biggest drop since the financial crisis. That followed a 0.4% contraction in Q2. A recession occurs when there are 2 consecutive qtrs of negative growth. “I think that we agree that they need to make sure that the agreement they signed with the Brits is maintained and protected and I think that is an indication to how they will conduct other agreements across the globe in other trade deals and in other agreements,” Short said.
China's human rights issues could impact trade deal
DR Horton (DHI) reported better-than-expected fiscal Q4 earnings, giving the stock a boost that continues its momentum this year. Reported EPS of $1.35 was above the forecast for $1.25. Its $5B in revenue surpassed expectations for $4.8B. For the year, EPS rose 13% & sales orders were up 7%. DHI is benefiting from pent-up demand for new housing because US construction has been below historical levels since the recession. That is now starting to change. Housing starts were up 8% in Sep on a year-over-year basis as the real-estate market has begun to rise back to pre-recession levels. The company's broad geographic footprint & mix of home prices give it an advantage as demand picks up, according to CEO Donald R Horton. “Over the last five years, we have grown our revenues by 119% and our earnings per share by 186%, while also generating $4 billion of cash flows from homebuilding operations, significantly increasing returns on inventory and equity and reducing our debt,” he said. Mortgage rates are also low, making it easier for potential buyers to afford homes. The average rate on a 30-year fixed-rate mortgage is still below 4% despite rising over the past month. DHI expects to increase the number of sales that close in the new fiscal year of 60-61K, up from 56,975 in 2019. Revenue should rise to $18.5-19B from $17.6B. It also expects to cut its share count by about 2% by buying back stock. The stock rose 76¢.
If you would like to learn more about DHI, click on this link:
club.ino.com/trend/analysis/stock/DHI?a_aid=CD3289&a_bid=6ae5b6f7
Homebuilder D.R. Horton’s Stock Rallies on Another Strong Quarter
Market averages keep climbing to record highs & Trump's speech shortly will probably bring out more stock buyers. Since Trump's inauguration, there have been 100 record closes & that trend should continue today.
Dow Jones Industrials
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