Dow gained 66, advancers over advancers 3-2 & NAZ crawled up 6, good enough for a new record. The MLP index added 2+ to the 177s & the REIT index inched up to the 462s. Junk bond funds fluctuated & Treasuries were sold today. Oil was even in the 67s after a wild ride in the last 2 weeks & gold retreated 22 to 1786.
AMJ (Alerian MLP index tracking fund)
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Orders for big-ticket items slipped last month as manufacturers continued to navigate a supply chain crunch higher materials costs. New orders for manufactured durable goods in Jul fell 0.1% to a
seasonally adjusted $257B, according to the Census Bureau. The forecast anticipated a 0.3% decline. Orders rose an unrevised 0.8% in Jun & have increased in 13 of the last 15 months. Excluding transportation, new orders decreased 0.7% & fell 1.2% when excluding defense. Transportation equipment orders fell $1.7B (2.2%), to $75.3B to drive the decline. Shipments rose 2.2% to $258B & have increased in 4 of the last 5 months.
Durable goods orders slip as supply chain disruptions persist
After rising for 3 weeks, mortgage rates came back down a bit last week, but it didn't seem to have much effect on mortgage demand. Total application volume rose 1.6% last week compared with the previous week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548K or less) decreased to 3.03% from 3.06%, with points falling to 0.29 from 0.34 (including the origination fee) for loans with a 20% down payment. “Treasury yields fell last week, as investors continue to anxiously monitor if the rise in COVID-19 cases in several states starts to dampen economic activity. Mortgage rates slightly declined as a result,” said Joel Kan, an MBA economist. Applications to refinance a home loan, which are highly rate sensitive, moved just 1% higher for the week & were 3% higher than the same week one year ago. The problem is that so many borrowers already refinanced at even lower rates last fall. Applications for a loan to purchase a home increased 3% for the week but were 16% lower than the same week one year ago. Homebuyers are hitting an affordability wall, & the supply of homes for sale, while increasing slightly, is still far too low. “The purchase index was at its highest level since early July, despite still continuing to lag 2020′s pace,” said Kan, adding, “There was also some easing in average loan sizes, which is potentially a sign that more first-time buyers looking for lower-priced homes are being helped by the recent uptick in for-sale inventory for both newly built homes and existing homes.”
Mortgage rates fall for the first time in 3 weeks, but demand is still light
There’s finally a light at the end of the Covid-19 tunnel, according to Dr Anthony Fauci — but only if the “overwhelming majority of people” get vaccinated. The Food & Drug Administration fully approved Pfizer (PFE) & BioNTech's (BNTX) Covid vaccine Mon. For Fauci that means more Americans will feel comfortable getting vaccinated — & the US could have enough control over Covid to return to some degree of normalcy by spring 2022. But even with the end in sight, this particular timeline is not a guarantee. Back in Apr, Fauci projected that the US could return to “normal” this summer, before that prediction was thwarted by the rise of Covid’s delta variant. “This is a very wily virus,” Fauci said yesterday. Currently, 52% of Americans are fully vaccinated, according to data from the Centers for Disease Control. It's not yet clear what percentage of the population needs to be vaccinated in order to achieve a comfortable level of immunity, Fauci added. But unvaccinated people cannot “keep lingering,” he said — because as long as the virus circulates, more dangerous & potentially vaccine-defeating variants can continue to emerge. With the new target of next spring on the horizon, “our fate is in our own hands,” Fauci said. Getting thru the winter will be additionally complicated, Fauci said, by 2 other viruses that typically circulate during the season: influenza & the respiratory syncytial virus (RSV), a common upper-respiratory virus that causes cold-like symptoms & is particularly dangerous in children under age 2. Parts of the country are already seeing surges in RSV, much earlier than usual. Last year, both flu & RSV cases dropped due to Covid protection measures like hand hygiene & social distancing. As a result, fewer people obtained natural immunity from a prior infection, which some experts believe is fueling the RSV surge. A similar scenario could occur with the flu in the coming months, potentially overwhelming hospitals and health care systems & prolonging the fight against Covid.
How the U.S. can reach ‘Covid normalcy’ by spring 2022, according to Fauci
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