Dow climbed 164, advancers over decliners 5-2 & NAZ went up 31. The MLP index rose 2 to the 201s & the REIT index gained 4+ to 469. Junk bond funds were flattish & Treasuries had a little more selling. Oil went over 83 for another multi-year high & gold advanced 12 to 1783.
AMJ (Alerian MLP index tracking fund)
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Online holiday shopping
sales are projected to notch a record-breaking $207B this year
even as retailers grapple with dire supply chain challenges, according
to Adobe. The
projection– which covers online shopping from Nov. 1 to Dec. 31 –
shows a 10% increase from last year, according to the Adobe Digital
Economy Index. Globally,
Adobe projects that online spending will hit $910B during the
same time, which marks an 11% growth compared to a year ago. This
"strong growth rate" may be unsurprising, comes just "after a year
where the pandemic made e-commerce an essential service," Adobe said. During
Cyber Week, consumers are expected to spend about $36B on online
goods. However, Cyber Monday is expected to drive the biggest
single-day profits of about $11.3B, a 4% increase from last
year. Meanwhile, Black Friday is projected to drive $9.5B in
profits, up 5% compared to 2020 &Thanksgiving is expected to pull in
about $5.4B, an increase of about 6% from last year. However, the season won't come without its challenges. Due to crowded ports & cargo delays & disruptions in overseas
manufacturing, consumers will not only face a shortage in supplies but
they'll also see higher prices compared to last year even with the
holiday discounts. And consumers are also likely to pay more for products that are in stock due
to the fact that retailers are issuing smaller discounts compared to
years past "on top of e-commerce inflation that has persisted through
the year," Adobe said.
Online holiday sales projected to reach record-breaking amount
Climbing mortgage interest rates caused another drop in mortgage demand for both refinances & home purchases. Total application volume fell 6.3% 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) increased to 3.23% from 3.18%, with points decreasing to 0.35 from 0.37 (including the origination fee) for loans with a 20% down payment. That rate was 21 basis points lower the same week one year ago. The 30-year fixed rate has risen 20 basis points over the past month & is now at the highest level since Apr. Applications to refinance a home loan, which are most sensitive to weekly rate changes, decreased 7% for the week & were 22% lower year over year. The refinance share of mortgage activity fell to 63.3% of total applications from 63.9% the previous week. “Refinance applications declined for the fourth week as rates increased, bringing the refinance index to its lowest level since July 2021,” said Joel Kan, MBA's associate VP of economic & industry forecasting. Mortgage applications to purchase a home dropped 5% for the week & were 12% lower year over year. Higher mortgage rates are now playing a larger role in the purchase market because home prices are so high. Various measures have prices nationally up 18% from a year ago for existing homes. For newly built homes, the median price in Aug was 20% higher than Aug 2020, according to the US Census. Mortgage rates continued their climb higher this week & the expectation is they will rise more significantly into next year, as the Federal Reserve tapers its purchases of mortgage-backed bonds. The MBA put out its 2022 forecast earlier this week, predicting a 33% drop in mortgage origination volume & a 4% average rate on the 30-year. That will mean more competition for lenders in a shrinking business.
Weekly mortgage demand drops over 6% after interest rates move even higher
Progressive Rep Ilhan Omar slammed moderate Sen Joe Manchin after he reiterated that he support a reconciliation package that costs more than $1.5T, underscoring the deep division among Dems over what they want in the bill. "He is going to lower the number every time a reporter asks," Omar said in response to a comment from Manchin on his
preferred topline number – which is the same as it's been for months. "It’s all a joke to him. He isn’t negotiating, he is killing the bill
and it’s time we all recognized it. Sadly, his shameful tactics will
cost his constituents much needed investments for themselves and
families." But Omar's comment also came as both moderates & progressives who met with Pres Biden expressed gratitude that he is getting more involved in
negotiations on Dems' legislative agenda. Many also expressed
optimism about the chances of a deal coming together soon. House Progressive Caucus Chairwoman Rep Pramila Jayapal was potentially the loudest of those voices. "The president is the inspirer, he is the closer, he is the
convincer, the mediator in chief. He really is doing a phenomenal job,"
Jayapal said. "We had a really good productive meeting. Another
productive meeting with the president, with the vice president, with
Secretary Yellen," she added. "I think we all feel still even more
optimistic about getting to an agreement on a really transformational
bill." Rep Mark Pocan, another member of the Progressive Caucus, said that he believes Dems will be able to get all their members on board in the foreseeable future.
Progressives rip Manchin as Biden tries to unite party behind spending splurge
Stock buyers expect retail sales to be good in the important holiday season. The chart below shows the Dow has finally broken thru the 35½K ceiling However, dark clouds have not gone away, starting with inflation worries & supply chain problems.
Dow Jones Industrials
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