Dow went up 46, decliners over advancers 3-2 & NAZ gamed 74. The MLP index declined 3+ to the 153s & the REIT index pulled back 3+ to the 372s. Junk bond funds were little changed & Treasuries slid lower in price. Oil declined in the 53s & gold was off 1 to 1865.
AMJ (Alerian MLP index tracking fund)
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The number of Americans filing for first-time unemployment benefits remained elevated last week as a surge in COVID-19 infections & new restrictions to help curb the spread of the virus weighed on the labor market's recovery. The Labor Dept reported that 900K Americans filed first-time jobless claims last week, slightly lower than the 910K forecast. The number is nearly 4 times the pre-crisis level but is well below the peak of almost 7M that was reached when stay-at-home orders were first issued in Mar. Almost 70M Americans (40% of the labor force) have filed for unemployment benefits during the pandemic. The number of people who are continuing to receive unemployment benefits fell to 5M, a decline of 127K from the previous week. Roughly 16M Americans were receiving some kind of jobless benefit. Many more are receiving jobless aid from 2 federal programs that Congress established with the passage of the CARES Act in Mar: One extends aid to self-employed individuals, gig workers & others who typically aren't eligible to receive benefits, & the other provides aid to those who have exhausted their state benefits.
Another 900K Americans filed for unemployment benefits last week
The Philadelphia Federal Reserve's business condition index jumped to 26.5 in Jan from 9.1 in Dec topping expectations of a reading of 10.5 in Jan. It's the highest level since last Feb, just before the pandemic shut down the economy. The 6-month outlook rose to 52.8, from 43.1 last month & new orders, employment & shipments jumped in Jan. There were signs of inflationary pressures in the supply chain. Manufacturing has been a bright spot in the US economy. It has continued to grow despite the resurgence in the coronavirus pandemic. The ISM factory index hit 60.7% in Dec, its highest level since Aug 2018. This was the 7th straight month above the 50% mark that shows expansion. Manufacturing was much stronger in Philadelphia than in the New York region, where activity slipped to 3.5 this month.
Factory activity surges in Mid-Atlantic region in January
US home builders started construction on homes at a seasonally-adjusted annual rate of 1.67M in Dec, representing a 5.8% increase from the previous month's figure, the Census Bureau reported. Permitting for new homes occurred at a seasonally-adjusted annual rate of 1.7M, up 4.5% from Nov. Compared with Dec 2019, housing starts were up 5%, while permits were up 17%. It was the highest level housing starts & building permits have reached since 2006. Both figures came in ahead of expectations, reflecting growth in the single-family sector. Economists had expected housing starts to occur at a pace of 1.6M & building permits to come in at a pace of 1.6M. Growth in the single-family sector drove the rise in both housing starts & building permits. On a monthly basis, single-family starts were up 12%, while single-family permits were up 7.8%. Comparatively, new construction on multifamily buildings fell 15.2% between Nov & Dec, while multifamily permits for buildings with 5 or more units slipped 2%. Permits for duplexes, triplexes & quadplexes dropped 11.5%. On a regional basis, all parts of the country saw permitting activity increase except for the Northeast where it fell 7.2%. Though even in the Northeast, single-family permits were up on a monthly basis. Similarly, the Northeast was the only region to see a decline in housing starts — both overall & for the single-family sector. The Midwest experienced the largest growth in housing starts, with a 32% increase. Overall, housing starts for 2020 were up nearly 12% from 2019, in spite of the slowdown this spring sparked by the pandemic. Builders' optimism might be waning slightly in the face of slowing foot traffic from buyers & rising costs associated with purchasing land & materials. But the underlying need for new homes is still there, which should keep the building sector busy for some time to come.
Markets were struggling at the start, but buyers returned iin the 2nd hour to take the averages higher. The exec orders are dimming enthusiasm of investors although the popular averages continue in record high territory.Dow Jones Industrials
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