Dow fell 141, decliners modestly ahead of advancers & NAZ was off 15. The MLP index slid to the 112s & the REIT index rebounded 4+ to the 344s after yesterday's sharp decline. Junk bond funds did little & Treasuries inched higher. Oil crawled higher in the 39s & gold lost 5, falling to 1905.
| CL=F | Crude Oil | 39.71 | +0.40 | +1.2% |
| GC=F | Gold | 1,921.10 | +10.50 | +0.6% |
After a record-setting Jul, the housing market still shows no sign of cooling off. Sales of existing homes rose 2.4% to a seasonally adjusted annualized
rate of 6 M units, according to the National Association of
Realtors. Sales were 10.5% higher compared with Aug 2019. This is the
highest sales pace since 2006, before the last recession. Sales
were hampered only by lack of supply. There were 1.49M homes for
sale at the end of Aug, down 18.6% annually to a 3.0-month supply. The supply of homes for sale when sales were last this robust, in 2006,
was more than double the current supply. That tight supply pushed
the median price of an existing home sold in Aug to a record high of
$311K. That is up 11.4% annually. In Q3
the housing wealth will have increased by $1.5T from Q2. “The imbalance of supply and demand will hurt
affordability soon. Once that appears it will hinder home ownership
rates,” said Lawrence Yun, chief economist for the Realtors. Tough
competition has the market moving very quickly. It took just 22 days to
sell a home in Aug, matching the fastest on record. Mortgage
rates set several record lows in Aug, which only added to the fierce
competition for housing. Low rates also kept the heat on home prices, as
they give buyers additional purchasing power.
Existing home sales jump to 14-year high, as prices set another record
Federal Reserve Chair Jerome Powell pledged continued support for an economy that he said has shown substantial improvement but still needs more work. In remarks the central bank leader will deliver at the House Financial Services Committee, Powell reiterated the Fed's commitment to helping the economy through the coronavirus pandemic & outlined what's been done so far. “We remain committed to using our tools to do what we can, for as long as it takes, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy,” Powell said. The appearance is one of 3 he will make this week. The Fed has cut short-term interest rates to near zero & launched 13 lending & liquidity programs that have helped ease market stresses & provided credit to businesses. In addition, the FOMC last week committed to not raising interest rates until inflation rises above 2%. While Powell said the accommodative policies will continue as needed, he added that the economy has improved. “Economic activity has picked up from its depressed second-quarter level, when much of the economy was shut down to stem the spread of the virus. Many economic indicators show marked improvement,” he said. “Both employment and overall economic activity, however, remain well below their pre-pandemic levels, and the path ahead continues to be highly uncertain.” The Fed's support programs have the potential to provide more than $2T in various levels of funding, though some have been used only lightly. The Main Street Lending Program, geared toward small- & medium-sized businesses, has just $2B or so committed though it has the potential for $600B. A facility in which the Fed can purchase corporate bonds on the primary market hasn't been used at all. Still, Powell said the facilities overall have unleashed about ½ their potential funding & will be at the ready should market stresses reemerge. “Our economy will recover fully from this difficult period,” he said. “We remain committed to using our full range of tools to support the economy for as long as is needed.”
Powell pledges the Fed’s economic aid ‘for as long as it takes’
The global tally for confirmed cases of the coronavirus that causes COVID-19 climbed to 31.3M, according to aggregated by Johns Hopkins University.
while the death toll rose to 966K. The US continued to lead the
world with 6.8M cases & 199.9K deaths. There were 55K new
cases reported in the US & at least 428 new deaths yesterday. The new case tally compares with the
daily average 42K over the past week. Brazil has the 2nd highest
death toll at 137K & the 3rd highest case tally at 4.6M. India is 3rd with 89K deaths & 2nd with 5.6M cases. Mexico is 4th with 74K deaths & 7th with 700K cases. The
UK has 42K deaths & 401K cases, the highest death toll in
Europe & 5th-highest in the world.
U.S. death toll inches closer to 200,000 as new cases rise by over 50,000 in a day
Buyers were active at the opening, but sellers returned & are taking the Dow lower. Fears about coronvirus which is not giving up without a strong fight & uncertainty over the election are limiting enthusiasm to buy stocks. The popular averages continue in the red in the market's toughest month historically.
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