Dow gained 144, advancers over decliners 4-3 & NAZ slid back 12. The MLP index went up 3+ to the 196s & the REIT index was off a tad in the 447s. Junk bond funds were little changed & Treasuries rose in price. Oil climbed 1 to about 74 & gold was flat at 1763.
AMJ (Alerian MLP index tracking fund)
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US private-sector job growth slowed in Jun, but was ahead of what was expected. The
US economy added 692K private-sector jobs this month, a decline
from the downwardly revised 886K jobs gained in May, according to the
ADP National Employment Report. The forecast expected the addition of 600K jobs. "The
labor market recovery remains robust, with June closing out a strong
second quarter of jobs growth," said Nela Richardson, chief economist at
ADP. "While payrolls are still nearly 7 million short of pre-COVID19
levels, job gains have totaled about 3 million since the beginning of
2021." Service providers continued to lead the job gains with leisure &
hospitality adding 332K workers in Jun. Education & health
services (plus 123K), professional & business services (plus
53K) & trade, transportation & utilities (plus 62K) also saw
solid gains. Information services (minus 4K) was the only
services-providing sector to lose jobs. Goods-producing sectors added a total of 68K jobs, led by construction (plus 47K). Job growth was pretty evenly distributed across small-, medium- & large-sized businesses. The ADP report comes ahead of Fri's Jun nonfarm payrolls report.
Private payrolls rise by 692,000 in June, down from prior month
The pandemic-induced housing boom may not be over quite yet. Despite recent months of softening sales, buyers came back remarkably strongly in May. Pending home sales, a measure of signed contracts on existing homes, jumped an unexpectedly high 8% in May compared with Apr, according to the National Association of Realtors (NAR). The foecast expected a 1% drop. This is the highest level of sales activity for May since 2005. Sales were up 13% from May 2020, when the housing market was just beginning to come back from the coronavirus lockdown. Pending contracts are a forward-looking indicator of closed home sales. “May’s strong increase in transactions – following April’s decline, as well as a sudden erosion in home affordability – was indeed a surprise,” said Lawrence Yun, NAR's chief economist. “The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings.” After falling quite sharply in Apr, the average on the 30-year fixed hovered in a tight range throughout May, giving some buyers at least a little relief on potential monthly payments. But sky-high home prices have been a major concern. In Apr, the much watched S&P Case-Shiller National Home Price Index was up over 14% year over year, the largest gain in its 30-year history. The Realtors report even higher gains in the median home price, some of which is skewed due to the fact that more of the sales activity is happening on the higher end of the market, where listings are more plentiful. The low end of the market is barely budging, as first-time buyers struggle for meager listings. Investors, the majority of whom use cash, are also more prevalent at the lower end of the market. “While these hurdles have contributed to pricing out some would-be buyers, the record-high aggregate wealth in the country from the elevated stock market and rising home prices are evidently providing funds for home purchases,” Yun added. Sales of newly built homes in May, which are also measured by signed contracts, fell nearly 6% from Apr, as builders continued to raise prices. The median price of a newly built home sold in May was up 18%, according to the US Census. Builders have seen soaring costs for land, labor & materials. While the price of lumber has come down dramatically in the last month, it is still well above pre-pandemic levels.
May home sales rebound to highest level since 2005, shocking even the Realtors
Dr Scott Gottlieb said he believes there’s enough Covid immunity protection across the US population that, even as the highly transmissible delta variant circulates, the country is unlikely to experience a situation nearly as dire as previous points in the pandemic. “I don’t think it’s going to be a raging epidemic across the country like we saw last winter. I think that there’s going to be pockets of spread, and prevalence overall is going to pick up,” the former Food & Drug Administration commissioner said. “But I think in parts of the country where vaccination rates are high, and that’s certainly true in the Northeast, I think we’re largely protected — at least from the current variants that are circulating,” added Gottlieb. On the other hand, Gottlieb said parts of the country are more vulnerable to outbreaks involving the Covid delta variant. Those are places where the number of people who have previously been infected or received the vaccine are low. He noted the situation in Missouri, where health officials have expressed concern with a rise in cases & hospitalizations, particularly in areas with lagging vaccination rates. “If you’re someone even who has been vaccinated living in those parts of the country, and there’s a dense epidemic of this new delta variant, you’re at risk as well because we know the vaccines aren’t 100% and we know in vulnerable populations — people who are immunocompromised, people who are much older — the vaccines may not work as well over time.” The delta variant has been identified in more than 90 countries, including the US where about every 2 weeks its prevalence is doubling. In some countries, such as Israel, concern over the delta variant has led to govs to tighten public-health restrictions.
Dr. Scott Gottlieb says U.S. unlikely to have another ‘raging epidemic’ from Covid delta variant
Investors are feeling good as they wait for more encouraging economic data. The poopular stock averages are all close to record highs.
Dow Jones Industrials
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