Dow fell 25, decliners over advancers 3-2 & NAZ went up 49. The MLP index rose 1+ to the 152 & the REIT index dropped 4 to 361. Junk bond funds were mixed & Treasuries edged higher. Oil was flattish in the 38s & gold was off 1 to 1734.
AMJ (Alerian MLP Index tracking fund)
US home construction rebounds 4.3% in May after steep declines caused by shutdowns due to the coronavirus. The Commerce Dept reported that the May rise in home construction followed declines in Apr & Mar. Home builders are hoping that as the nation re-opens, housing will post a strong recovery, helped by super-low mortgage rates. But some analysts caution that the fledgling rebound could be derailed if cases of the coronavirus spike again, causing potential buyers to put off looking for a new home.
Buyers are rushing back into the housing market, enticed by record low mortgage rates & a pandemic-induced need to nest like never before. Mortgage applications to purchase a home rose 4% last week from the previous week & were a remarkable 21% higher than one year ago, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. That was the 9th consecutive week of gains and the highest volume in more than 11 years. “The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said MBA economist Joel Kan. Buyers were also fueled by a new record low mortgage rate. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510K or less) decreased to 3.30% from 3.38%, with points decreasing to 0.29 from 0.30 (including the origination fee) for loans with a 20% down payment. Lower rates also fueled refinance demand. Those applications rose 10% for the week & were 106% higher than a year ago. Refinances had been slipping for weeks, but the new record low rates may have woken some homeowners up to the potential savings. “Refinancing continues to support households’ finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery,” Kan said. The refinance share of mortgage activity increased to 63.2% of total applications from 61.3% the previous week. With fixed interest rates so low, the adjustable-rate mortgage share of activity decreased to just 2.8% of total applications. ARM loans carry lower rates but higher risk.
Homebuyer mortgage demand spikes to 11-year high, as rates hit another record low
General Motors (GM) CEO said she is “cautiously optimistic” about consumer demand returning as well as a global economic recovery as businesses continue to reopen following shutdowns due to the coronavirus pandemic. “We’ve been pleasantly surprised how demand has come back,” she added. Barra said the company is “hopeful that we’ll have a strong recovery” overall but is planning for multiple scenarios “to make sure the company is strong from a business perspective and can weather any outcome.” GM, remains committed to ride-sharing, specifically when it comes to autonomous vehicles. Some have speculated consumers won't want to utilize ride-sharing, which the company has a stake in, in the future due to the coronavirus pandemic. “Right now you’re seeing people, for the most part, be very cautious in shared environments across many levels,” she continued. “I think as we move forward, ride-sharing will be important, and autonomous will be even stronger.” Cruise, a majority-owned subsidiary of GM, unveiled in Jan a driverless, electric shuttle for ride-sharing called Origin. The automaker initially had plans to launch a self-driving fleet of vehicles last year but indefinitely delayed those plans for further testing. Her comments came a day after the company’s annual shareholder meeting, where she promised the company will remain steadfast on its plans to invest $20B in all-electric & autonomous vehicles thru 2025. The automaker is in the midst of reopening its North American production. Barra has said the company plans to get production back or close to pre-coronavirus levels by the end of this month. “The return to work has been going pretty well,” Barra said, adding she has visited 8 plants to talk with employees & ensure they feel safe returning to work. “We’re cautiously optimistic as we see demand resuming.” The stock was off 23¢.
If you would like to learn more about GM, click on this link:
GM CEO Mary Barra ‘cautiously optimistic’ on coronavirus recovery, consumer demand
Stocks are meandering, looking for direction. While the economy is recovering, percentage gains are off depressed levels which does not say much about what is really happening. Meanwhile, the virus is refusing to go away which is very troubling for investors. The Dow is back to where it was 2 weeks ago & gold continues to be purchased by nervous investors, keeping it above elevated levels at 1700+.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 37.49 | -0.89 | -2.3% |
| GC=F | Gold | 1,730.50 | -6.00 | -0.4% |
US home construction rebounds 4.3% in May after steep declines caused by shutdowns due to the coronavirus. The Commerce Dept reported that the May rise in home construction followed declines in Apr & Mar. Home builders are hoping that as the nation re-opens, housing will post a strong recovery, helped by super-low mortgage rates. But some analysts caution that the fledgling rebound could be derailed if cases of the coronavirus spike again, causing potential buyers to put off looking for a new home.
New home construction rebounds 4.3% in May
Buyers are rushing back into the housing market, enticed by record low mortgage rates & a pandemic-induced need to nest like never before. Mortgage applications to purchase a home rose 4% last week from the previous week & were a remarkable 21% higher than one year ago, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. That was the 9th consecutive week of gains and the highest volume in more than 11 years. “The housing market continues to experience the release of unrealized pent-up demand from earlier this spring, as well as a gradual improvement in consumer confidence,” said MBA economist Joel Kan. Buyers were also fueled by a new record low mortgage rate. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($510K or less) decreased to 3.30% from 3.38%, with points decreasing to 0.29 from 0.30 (including the origination fee) for loans with a 20% down payment. Lower rates also fueled refinance demand. Those applications rose 10% for the week & were 106% higher than a year ago. Refinances had been slipping for weeks, but the new record low rates may have woken some homeowners up to the potential savings. “Refinancing continues to support households’ finances, as homeowners who refinance are able to gain savings on their monthly mortgage payments in a still-uncertain period of the economic recovery,” Kan said. The refinance share of mortgage activity increased to 63.2% of total applications from 61.3% the previous week. With fixed interest rates so low, the adjustable-rate mortgage share of activity decreased to just 2.8% of total applications. ARM loans carry lower rates but higher risk.
Homebuyer mortgage demand spikes to 11-year high, as rates hit another record low
General Motors (GM) CEO said she is “cautiously optimistic” about consumer demand returning as well as a global economic recovery as businesses continue to reopen following shutdowns due to the coronavirus pandemic. “We’ve been pleasantly surprised how demand has come back,” she added. Barra said the company is “hopeful that we’ll have a strong recovery” overall but is planning for multiple scenarios “to make sure the company is strong from a business perspective and can weather any outcome.” GM, remains committed to ride-sharing, specifically when it comes to autonomous vehicles. Some have speculated consumers won't want to utilize ride-sharing, which the company has a stake in, in the future due to the coronavirus pandemic. “Right now you’re seeing people, for the most part, be very cautious in shared environments across many levels,” she continued. “I think as we move forward, ride-sharing will be important, and autonomous will be even stronger.” Cruise, a majority-owned subsidiary of GM, unveiled in Jan a driverless, electric shuttle for ride-sharing called Origin. The automaker initially had plans to launch a self-driving fleet of vehicles last year but indefinitely delayed those plans for further testing. Her comments came a day after the company’s annual shareholder meeting, where she promised the company will remain steadfast on its plans to invest $20B in all-electric & autonomous vehicles thru 2025. The automaker is in the midst of reopening its North American production. Barra has said the company plans to get production back or close to pre-coronavirus levels by the end of this month. “The return to work has been going pretty well,” Barra said, adding she has visited 8 plants to talk with employees & ensure they feel safe returning to work. “We’re cautiously optimistic as we see demand resuming.” The stock was off 23¢.
If you would like to learn more about GM, click on this link:
GM CEO Mary Barra ‘cautiously optimistic’ on coronavirus recovery, consumer demand
Stocks are meandering, looking for direction. While the economy is recovering, percentage gains are off depressed levels which does not say much about what is really happening. Meanwhile, the virus is refusing to go away which is very troubling for investors. The Dow is back to where it was 2 weeks ago & gold continues to be purchased by nervous investors, keeping it above elevated levels at 1700+.
Dow Jones Industrials
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