Dow climbed 60, advancers over decliners 5-2 & NAZ gained 115. The MLP index rose 1+ to the 128s & the REIT index went up 3 to 358. Junk bond funds inched higher & Treasuries were flattish in price. Oil crawled higher in the 41s & gold added 4 to 1949.
AMJ (Alerian MLP Index tracking fund)
Pending home sales continued to climb in Jun, rising 16.6% monthly since May, & rising 6.3% since Jun 2019, according to the National Association of Realtors (NAR). This beats the expectation for the monthly gain, which was a rise of 12.5% & it's the 2nd straight month of gains in contract activity. The Realtors have also raised their forecast for the housing market because of what they say is an apparent market turnaround. For 2020, existing-home sales are expected to decline by only 3%. New home sales are projected to rise by 3%. The previous forecast for existing home sales in 2020 was down 7.7%, with new home sales up 1%. “It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago,” said Lawrence Yun, NAR's chief economist. “Consumers are taking advantage of record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.” Pending sales measure signed contracts on existing homes, so it shows that buyers were out shopping during the month, just before the most recent surge in coronavirus cases. Sales had spiked in May, a stunning 44% compared with Apr. The average rate on the 30-year fixed mortgage at the beginning of Jun was 3.24%, & by the end of Jun it dipped to 2.95%. Rates have been hovering near record lows, around 2.9% since then. The NAR anticipates rates to stay at or near 3% over the next 18 months. This follows last week's NAR report showing the sale of existing homes in Jun rose a stunning 20.7% monthly. That’s the largest monthly gain since the Realtors began tracking the data in 1968. This count is based on closings & sales were still lower annually, by 11.3%. One of the biggest issues remains the supply of existing homes for sale, which fell 18% annually in Jun to just 1.57M homes. Based on the current sales pace, that represents a 4-month supply. Last Jun 350K more homes were on the market. The supply was up just 1% monthly, from May to Jun. Yun says the price of lumber is hurting the builders. “While the outlook is promising, sharply rising lumber prices are concerning,” Yun added. “A reduction in tariffs – even if temporary – would help increase home building and thereby spur faster economic growth.”
Pending home sales surge for the second consecutive month
General Motors (GM) lost $806M & burned thru Bs of $s of cash in Q2 in what is expected to be the worst 3 months of the year for the auto industry as the coronavirus shuttered factories & devastated sales. GM results reflected a 34% drop in US vehicle sales, which the company attributed to a drop in demand “due to the COVID-19 pandemic and tight dealer inventories caused by the production shutdown in the first and second quarters.” The loss is a sharp contrast to the $2.4B profit it made last year. Revenue slid to $16.8B, a more than 53% drop from $36B during the same time last year. However, the loss isn't as bad as feared. Revenue:was $16.8B versus $17.3B expected On an adjusted basis, the company lost 50¢ a share while the forecast called for a loss of $1.77 a share. CEO Mary Barra described the qtr as “one of the most challenging” in the company's history. She said that the company is positioned for “continued recovery” for the remainder of the year & beyond. The company burned thru $7.8B in cash during the qtr, a number that is closely tracked. GM expects to spend $7-9B in Q2. GM also expects to generate $7-9B in free cash flow during H2. That's contingent on “continued economic recovery” & a US sales pace for the industry of about 14M for the rest of the year, CFO Dhivya Suryadevara said. The company did not release new guidance for 2020.. The stock fell 59¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM swings to an $800 million loss as coronavirus saps cash in second quarter
Boeing (BA), a Dow stock, plans to cut aircraft production & warned about the possibility of further reductions in its workforce as the impact of the coronavirus pandemic ravages demand for air travel. The pandemic has driven up financial losses at its airline customers & hurt demand for new planes. The company was in crisis before the coronavirus spread around the world because of the fallout from 2 fatal crashes of its 737 Max that claimed 346 lives. “Regretfully, the prolonged impact of COVID-19 causing further reductions in our production rates and lower demand for commercial services means we’ll have to further assess the size of our workforce,” CEO Dave Calhoun said after the company released a $2.4B quarterly loss. “This is difficult news, and I know it adds uncertainty during an already challenging time. We will try to limit the impact on our people as much as possible going forward.” The company's Q2 results came in worse than expected. Revenue fell 25% to $11.8B from $15.75B a year earlier & below a forecast for sales of $13.2B. The commercial aircraft unit suffered the most with a 65% drop in revenue from a year earlier to $1.6B as deliveries of new planes tumbled The defense unit proved more resilient than its commercial business, bringing in $6.6B, roughly flat on the year. For the qtr, the net loss narrowed to $4.20 per share, from $5.21 per share, a year earlier, when it posted a nearly $5B charge on its beleaguered 737 Max program. On an adjusted basis, the per share loss was $4.79 per share, compared with a $2.54 per-share loss estimated.. The stock dropped 7.67 (5%).
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing posts loss, plans further production cuts and assesses workforce size
Steve Mnuchin says the 2 sides are far apart on a stimulus deal. The Fed announcement later is not expected to produce a lot of excitement. Amid the chaos, demand for gold keeps taking it to new heights.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 41.38 | +0.34 | +0.8% |
| GC=F | Gold | 1,948.00 | +3.40 | +0.2% |
Pending home sales continued to climb in Jun, rising 16.6% monthly since May, & rising 6.3% since Jun 2019, according to the National Association of Realtors (NAR). This beats the expectation for the monthly gain, which was a rise of 12.5% & it's the 2nd straight month of gains in contract activity. The Realtors have also raised their forecast for the housing market because of what they say is an apparent market turnaround. For 2020, existing-home sales are expected to decline by only 3%. New home sales are projected to rise by 3%. The previous forecast for existing home sales in 2020 was down 7.7%, with new home sales up 1%. “It is quite surprising and remarkable that, in the midst of a global pandemic, contract activity for home purchases is higher compared to one year ago,” said Lawrence Yun, NAR's chief economist. “Consumers are taking advantage of record-low mortgage rates resulting from the Federal Reserve’s maximum liquidity monetary policy.” Pending sales measure signed contracts on existing homes, so it shows that buyers were out shopping during the month, just before the most recent surge in coronavirus cases. Sales had spiked in May, a stunning 44% compared with Apr. The average rate on the 30-year fixed mortgage at the beginning of Jun was 3.24%, & by the end of Jun it dipped to 2.95%. Rates have been hovering near record lows, around 2.9% since then. The NAR anticipates rates to stay at or near 3% over the next 18 months. This follows last week's NAR report showing the sale of existing homes in Jun rose a stunning 20.7% monthly. That’s the largest monthly gain since the Realtors began tracking the data in 1968. This count is based on closings & sales were still lower annually, by 11.3%. One of the biggest issues remains the supply of existing homes for sale, which fell 18% annually in Jun to just 1.57M homes. Based on the current sales pace, that represents a 4-month supply. Last Jun 350K more homes were on the market. The supply was up just 1% monthly, from May to Jun. Yun says the price of lumber is hurting the builders. “While the outlook is promising, sharply rising lumber prices are concerning,” Yun added. “A reduction in tariffs – even if temporary – would help increase home building and thereby spur faster economic growth.”
Pending home sales surge for the second consecutive month
General Motors (GM) lost $806M & burned thru Bs of $s of cash in Q2 in what is expected to be the worst 3 months of the year for the auto industry as the coronavirus shuttered factories & devastated sales. GM results reflected a 34% drop in US vehicle sales, which the company attributed to a drop in demand “due to the COVID-19 pandemic and tight dealer inventories caused by the production shutdown in the first and second quarters.” The loss is a sharp contrast to the $2.4B profit it made last year. Revenue slid to $16.8B, a more than 53% drop from $36B during the same time last year. However, the loss isn't as bad as feared. Revenue:was $16.8B versus $17.3B expected On an adjusted basis, the company lost 50¢ a share while the forecast called for a loss of $1.77 a share. CEO Mary Barra described the qtr as “one of the most challenging” in the company's history. She said that the company is positioned for “continued recovery” for the remainder of the year & beyond. The company burned thru $7.8B in cash during the qtr, a number that is closely tracked. GM expects to spend $7-9B in Q2. GM also expects to generate $7-9B in free cash flow during H2. That's contingent on “continued economic recovery” & a US sales pace for the industry of about 14M for the rest of the year, CFO Dhivya Suryadevara said. The company did not release new guidance for 2020.. The stock fell 59¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM?a_aid=CD3289&a_bid=6ae5b6f7
GM swings to an $800 million loss as coronavirus saps cash in second quarter
Boeing (BA), a Dow stock, plans to cut aircraft production & warned about the possibility of further reductions in its workforce as the impact of the coronavirus pandemic ravages demand for air travel. The pandemic has driven up financial losses at its airline customers & hurt demand for new planes. The company was in crisis before the coronavirus spread around the world because of the fallout from 2 fatal crashes of its 737 Max that claimed 346 lives. “Regretfully, the prolonged impact of COVID-19 causing further reductions in our production rates and lower demand for commercial services means we’ll have to further assess the size of our workforce,” CEO Dave Calhoun said after the company released a $2.4B quarterly loss. “This is difficult news, and I know it adds uncertainty during an already challenging time. We will try to limit the impact on our people as much as possible going forward.” The company's Q2 results came in worse than expected. Revenue fell 25% to $11.8B from $15.75B a year earlier & below a forecast for sales of $13.2B. The commercial aircraft unit suffered the most with a 65% drop in revenue from a year earlier to $1.6B as deliveries of new planes tumbled The defense unit proved more resilient than its commercial business, bringing in $6.6B, roughly flat on the year. For the qtr, the net loss narrowed to $4.20 per share, from $5.21 per share, a year earlier, when it posted a nearly $5B charge on its beleaguered 737 Max program. On an adjusted basis, the per share loss was $4.79 per share, compared with a $2.54 per-share loss estimated.. The stock dropped 7.67 (5%).
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing posts loss, plans further production cuts and assesses workforce size
Steve Mnuchin says the 2 sides are far apart on a stimulus deal. The Fed announcement later is not expected to produce a lot of excitement. Amid the chaos, demand for gold keeps taking it to new heights.
Dow Jones Industrials
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