Dow fell 22, advancers over decliners 3-2 & NAZ went up 31. The MLP index fell 1+ to a depressed the 201s & the REIT index was steady at 406. Junk bond funds inched higher & Treasuries were sold. Oil slipped lower in the 58s & gold was off 4 to 1462.
AMJ (Alerian MLP Index tracking fund)
The US economy grew more quickly than expected in the 3 months thru Sep, according to new figures published by the Commerce Dept. GDP increased at a 2.1% annualized rate, the gov said in its 2nd reading of Q3 GDP. That was higher than its original estimate of 1.9% last month. The forecast expected the measure to remain unrevised from the preliminary reading. The upward revision was largely the result of stronger inventory & business investment. At the beginning of the year, the economy grew at a torrid 3.1% rate, but has weakened substantially over the year, largely a result of the US-China trade war. “The trade conflict with China represents the main risk to U.S. growth,” said Agathe Demarais, global forecasting director at the Economist Intelligence Unit. And if the world's 2 largest economies fail to sign a phase one trade deal by mid-Dec, suspending Bs of $s in planned tariffs, “growth would decelerate more sharply than we currently expect.” Still, the holiday shopping season, which is expected to be relatively healthy thanks to solid job growth & strong consumer spending, could boost economic growth.
Demand for housing is high, but there aren't enough homes for sale to meet it. Pending home sales, which measure signed contracts, fell 1.7% in Oct month-to-month, according to the National Association of Realtors (NAR). Sales were 4.4% higher annually, likely because mortgage rates are much lower this fall. The average rate on the 30-year fixed mortgage was about a full percentage point lower this Oct than it was a year ago. Rates did move slightly higher in Oct, which could account for some of the monthly drop, but a shortage of homes for sale is more of the culprit. Lower rates overall this year have juiced demand significantly, causing for-sale inventory to fall. Inventory had been rising at the start of this year, due to last year's rate spike. “We still need to address and, more importantly, correct inadequate levels of inventory across the country,” said Lawrence Yun, chief economist at the NAR. “There is no shortage of buyers seeking homes, but a lack of available units continues to drag down the nation’s housing market and overall economy.” Sales of newly built homes, which are also measured by signed contracts, were significantly higher in Oct compared with a year Oct 2018. Builders are seeing strong demand & are trying to shift production to more affordable homes. Housing starts are still not where they need to be, however, to meet demand. “We risk a lingering shortage of sufficient inventory if homebuilding only continues at its current pace over the next 20 years, when the U.S. population is projected to increase by more than 40 million over this period. Clearly, home builders must step in and construct more housing,” added Yun.
Pending home sales fall 1.7% in October, as housing shortage worsens
Beijing finally responds to Hong Kong election results after big win for democrats
As expected, this is a quiet day for trading ahead of tomorrow's holiday. The revision on GDP data sounds good, however that could later hurt Q4 data. In the meantime, the popular averages are at or hovering near record highs.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 58.29 | -0.12 | -0.2% |
| GC=F | Gold | 1,455.20 | -5.10 | -0.4% |
The US economy grew more quickly than expected in the 3 months thru Sep, according to new figures published by the Commerce Dept. GDP increased at a 2.1% annualized rate, the gov said in its 2nd reading of Q3 GDP. That was higher than its original estimate of 1.9% last month. The forecast expected the measure to remain unrevised from the preliminary reading. The upward revision was largely the result of stronger inventory & business investment. At the beginning of the year, the economy grew at a torrid 3.1% rate, but has weakened substantially over the year, largely a result of the US-China trade war. “The trade conflict with China represents the main risk to U.S. growth,” said Agathe Demarais, global forecasting director at the Economist Intelligence Unit. And if the world's 2 largest economies fail to sign a phase one trade deal by mid-Dec, suspending Bs of $s in planned tariffs, “growth would decelerate more sharply than we currently expect.” Still, the holiday shopping season, which is expected to be relatively healthy thanks to solid job growth & strong consumer spending, could boost economic growth.
US economy grew faster than previously thought
Demand for housing is high, but there aren't enough homes for sale to meet it. Pending home sales, which measure signed contracts, fell 1.7% in Oct month-to-month, according to the National Association of Realtors (NAR). Sales were 4.4% higher annually, likely because mortgage rates are much lower this fall. The average rate on the 30-year fixed mortgage was about a full percentage point lower this Oct than it was a year ago. Rates did move slightly higher in Oct, which could account for some of the monthly drop, but a shortage of homes for sale is more of the culprit. Lower rates overall this year have juiced demand significantly, causing for-sale inventory to fall. Inventory had been rising at the start of this year, due to last year's rate spike. “We still need to address and, more importantly, correct inadequate levels of inventory across the country,” said Lawrence Yun, chief economist at the NAR. “There is no shortage of buyers seeking homes, but a lack of available units continues to drag down the nation’s housing market and overall economy.” Sales of newly built homes, which are also measured by signed contracts, were significantly higher in Oct compared with a year Oct 2018. Builders are seeing strong demand & are trying to shift production to more affordable homes. Housing starts are still not where they need to be, however, to meet demand. “We risk a lingering shortage of sufficient inventory if homebuilding only continues at its current pace over the next 20 years, when the U.S. population is projected to increase by more than 40 million over this period. Clearly, home builders must step in and construct more housing,” added Yun.
Pending home sales fall 1.7% in October, as housing shortage worsens
After Hong Kong's pro-democracy candidates scored a
landslide win in local elections, Chinese state media called the
results “skewed” & a “setback” for the city's drive for democracy. Pan-democrats in Hong Kong won
almost 90% of 452 district council seats in Sun's elections — widely
seen as a barometer of public sentiment after months of social unrest
in the special administrative region. The results were also a stinging
rebuke to Beijing-backed chief exec Carrie Lam & her
administration. “The
result of Sun's district council election marks a setback for Hong
Kong's democratic development, as the results were skewed by the illegal
activities of the opposition camp to the benefit of their candidates,”
said China Daily. “In
the run-up to Sunday’s voting, members of the opposition camp,
particularly their young agitators, engaged in an all-out campaign to
sabotage the campaign activities of pro-establishment candidates and
intimidate their supporters from going to the ballot box,” added the
English language newspaper. Hong Kong, a former British colony, which
returned to Chinese rule in 1997, has been plagued by months of
anti-gov protests. The Chinese territory operates under the “one
country, two systems” framework which grants Hong Kong self-governing
power & various freedoms, including limited election rights.
Demonstrators are angry at what they say is Chinese meddling in some of
those freedoms. The Chinese Communist Party's People’s Daily reported yesterday that the local elections in Hong Kong have concluded, but it did not mention the result. The
newspaper also said the months-long social unrest in Hong Kong has
“severely disrupted the elections process” & added that “patriotic
candidates” were harassed on the day of the election by those seeking
chaos. In a commentart, state news agency Xinhua blamed “foreign forces” & said the election “fell victim” to the social unrest. “During
the past more than 5 months, rioters conspired with foreign forces & escalated violent acts, which resulted in political antagonism,
social splits, and setbacks in the economy,” Xinhua said. “Campaigns of some patriotic candidates were seriously
disrupted, and their offices were trashed and set ablaze. One candidate
was injured in an attack. Harassment on patriotic candidates occurred on
the voting day,” according to the news agency.
Beijing finally responds to Hong Kong election results after big win for democrats
As expected, this is a quiet day for trading ahead of tomorrow's holiday. The revision on GDP data sounds good, however that could later hurt Q4 data. In the meantime, the popular averages are at or hovering near record highs.
Dow Jones Industrials
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