Dow was off 57, declines over advancers about 2-1 & NAZ dropped 178. The MLP index fell 1+ to the 154s & the REIT index slid back another 1+ to the 385s. Junk bond funds fluctuated & Treasuries saw a little buying. Oil climbed higher above 60, fueled by bad weather in the south, & gold tumbled 28 to 1770.
AMJ (Alerian MLP index tracking fund)
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US retail sales soared in Jan as consumers, buoyed by the cash payments that many Americans received as part of the latest $900B coronavirus relief package, boosted their spending. The value of total sales increased 5.3% from the prior month, the Commerce Dept said. The forecast expected sales to climb 1.1%. It comes after a decline of 1% in Dec, revised Commerce Dept figures show. Spending was spread across industries last month, with receipts at bars & restaurants -- one of the sectors hit hardest by the pandemic -- increasing 6.9%. The biggest increase in sales was at department stores, up 23.5%, electronics & appliance stores, which rose 14.7%, & furniture stores, up 12%. The report comes as congressional Dems move forward with passing another round of emergency aid for families still reeling from the pandemic. The proposal, called the American Rescue Plan, is widely expected to include a 3rd cash payment worth up to $1400 for families earning less than $100K.
US retail sales surge 5.3% in January, boosted by $600 stimulus checks
Buyer demand for newly built homes continues to surge & that is keeping builder confidence high even as building material prices climb. Builder sentiment rose one point to 84 in Feb according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Anything above 50 is considered positive sentiment. The index stood at 74 in Feb 2020. “Lumber prices have been steadily rising this year and hit a record high in mid-February, adding thousands of dollars to the cost of a new home and causing some builders to abruptly halt projects at a time when inventories are already at all-time lows,” said NAHB Chairman Chuck Fowke. “Builders remain very focused on regulatory and other policy issues that could price out households seeking new homes in a tight market this year.” While home prices are a concern in both the new & existing home markets, there appears to be very little pullback in buyer demand. Of the index's t3 components, current sales conditions held steady at 90 & traffic of prospective buyers rose 4r points to 72. Sales expectations in the next 6 months, however, fell 3 points to 80. “Demand conditions remain solid due to demographics, low mortgage rates and the suburban shift to lower cost markets, but we expect to see some cooling in growth rates for residential construction in 2021 due to cost factors, supply chain issues and regulatory risks,” said NAHB chief economist Robert Dietz. “Some builders are at capacity and may not be able to expand production due to these headwinds.”
Homebuilder confidence improves, despite record high lumber prices
US industrial production rose 0.9% in Jan, the Federal Reserve reported, for the 4th straight monthly gain. The gain was above expectations for a 0.5% gain. Production rose a revised 1.3% in Dec, down slightly from the prior estimate of a 1.6% gain. Manufacturing output rose 1% in Jan after a 0.9% rise in the prior month. Output of motor vehicles fell 0.7% in Jan after a 0.2% decline in the prior month. Output was held down by the global shortage of semiconductors. Mining production, which includes oil & gas, jumped 2.3% after a 0.7% gain in the prior month. Utility output fell 1.2% after a sharp 4.9% rise in the prior month. Capacity utilization rose to 75.6% in Jan from 74.9 in the prior month. The capacity utilization rate reflects the limits to operating the nation's factories, mines & utilities. Economists remain optimistic about the prospects for manufacturing production in coming months. Factories have been relatively resilient during the pandemic, while the service sector has been hobbled by business lockdowns. Total production has not returned to pre-pandemic levels though, held down by weakness in the energy sector.
U.S. industrial output jumps 0.9% in January for fourth straight gain
Investors stayed home at the opening & the the indices continue in the red. Investors are finding the storms in the US to be very depressing.
Dow Jones Industrials
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