Dow went up 179, advancers over decliners 5-2 & NAZ gained 124. The MLP index was steady in the 171s & the REIT index advanced 2+ to the 494s (new record). Junk bond funds rose along with stocks & Treasuries saw more buying. Oil climbed higher in the 71s & gold bounced back 9 to 1797.
AMJ (Alerian MLP index tracking fund)
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US economic growth was revised slightly higher in Q3, but still slowed sharply from the spring amid a surge of COVID-19 infections nationwide that forced consumers to pull back on spending. GDP, the broadest measure of goods & services produced across the economy, grew by 2.3% on an annualized basis in Jul-Sep, the Commerce Dept said in its 3rd & final reading. While that's an increase from the 2.1% estimated last month, it still marks the slowest since Q2-2020, when the economy was in the throes of the shortest, but steepest, recession in nearly a century. The economy grew at an annual revised rate of 6.7% in Q2. The Q3 slowdown also reflected pandemic-induced disruptions in the supply chain that limited the availability of goods such as motor vehicles, as well as the evaporation of federal stimulus money provided to businesses, households & state & local govs. Hurricane Ida, one of the most powerful storms to ever make landfall in the US, also weighed on manufacturing production, further hampering growth. Still, the economy has regained steam since then, powered by solid consumer spending in Oct as the summer Covid-19 wave faded away. The trade deficit shrank in Oct for the first time in months, driven by a new record of US exports as congestion at ports & warehouses cleared. The unemployment rate in Nov dropped to 4.2%, the lowest level since the pandemic began. GDP Now, an up-to-date tracker monitored by the Federal Reserve Bank of Atlanta, is currently estimating Q4 growth of 7.2%. Still, there are dark clouds looming on the horizon. Market forecasters are dialing back their growth projections for next year as hopes fade for Pres Biden's sweeping economic agenda & concerns grow about the new Covid-19 variant. Inflation is at the highest level in nearly 4 decades, & the Federal Reserve is pushing forward with its plans to tighten monetary policy.
Why US economic growth is up despite lagging in previous months
Sales of previously owned homes in Novr rose 1.9% from Oct to 6.5M units, according to the National Association of Realtors' (NAR) seasonally adjusted count. Sales were 2.0% lower than Nov 2020. These sales reflect home closings, so contracts that were likely signed in Sep & Oct. Sales likely increased due to a strengthening job market & concerns among potential buyers that mortgage rates will be significantly higher next year, according to the NAR's chief economist Lawrence Yun. There were 1.1M homes for sale at the end of Nov, down 13% year over year. At the current sales pace that represents a 2.1-month supply. “New listings are coming on the market, but they are being snatched up quickly,” said Yun, who added that he expects to see a further decline in inventory in Dec. That tight supply continued to put upward pressure on home prices. The median price of an existing home sold in Nov was $354K, a 13.9% gain from Nov 2020. Price gains are slowing from earlier annual gains of about 20%. Sales were stronger in the more expensive categories, with homes priced $750K- $1M rising 37% year over year & those priced above $1M rising 50%. Comparatively, homes priced between $100-250K fell 19%. Supply is leanest on the lower end of the market. The market is also moving very quickly, with the average days a home stays on the market just 18 days. The share of sales to first-time buyers was just 26%, down from 32% in Nov 2020 & the share of sales to investors was 15%, up from 14% the year before.
November home sales rose due to hot job market and concerns over rising rates next year
U.S. consumer confidence improves further in
Investors are feeling better & the consumer confidence data helped. Expectations about short-term growth prospects improving is bringing out buyers. However volume is relatively light in the holiday shortened week.
Dow Jones Industrials
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