Dow rose 39, advancers modestly ahead of decliners & NAZ was off 119. The MLP index added 1+ to the 209s & the REIT index went up 1+ to the 466s. Junk bond funds drifted lower & Treasuries were very heavily sold, taking the yield on the 10 year Treasury up 16 basis points to 2.49% (more below). Oil was off 1+ to 111 & gold fell 9 to 1952.
AMJ (Alerian MLP index tracking fund)
|
|
The US said it will work with intl partners to provide at least 15B cubic meters more of liquified natural gas to Europe this year, seeking to end the bloc's dependence on Russian energy exports following the Kremlin's invasion of Ukraine. These additional volumes of LNG are expected to increase going forward, the White House said. It comes amid heightened concern that energy-importing countries continue to top up Pres Vladimir Putin's war chest with oil and gas revenue on a daily basis. Pres Biden described the agreement as a “groundbreaking” new initiative designed to “increase energy security, economic security and national security.” Speaking alongside European Commission Pres Ursula von der Leyen in Brussels, Biden said: “I know that eliminating Russian gas will have costs for Europe. But it’s not only the right thing to do from a moral standpoint, it’s going to put us on a much stronger strategic footing.” “All of this is bringing the European Union and the United States even closer together, and that’s a win for all of us,” he added.
EU strikes gas deal with the U.S. as it seeks to cut its reliance on Russia
The 10-year Treasury yield hit a fresh 2-year high as investors anticipate a more aggressive Fed. The 10-year rate at its highs hit 2.475%, its highest level since May 2019. The yield on the benchmark 10-year Treasury note moved 10.4 basis points higher to 2.445% & the yield on the 30-year Treasury bond jumped 7.1 basis points to 2.583%. Yields move inversely to prices & 1 basis point is equal to 0.01%. The moves higher come amid growing expectations the Federal Reserve will be more aggressive in its tightening cycle. Fed Chair Jerome Powell Mon said, "inflation is much too high," & emphasized the Fed would continue to raise interest rates until inflation is under control. "If we conclude that it is appropriate to move more aggressively by raising the federal funds rate by more than 25 basis points at a meeting or meetings, we will do so," Powell added.
10-year yield roars to fresh 2-year high on expectations for more aggressive Fed
In a grim sign for the housing market’s busiest season, pending home sales, which measure signed contracts on existing homes, fell 4.1% in Feb compared with Jan, according to the National Association of Realtors. Sales were down 5.4% compared with Feb 2021. The forecast called for a slight gain. This is the 4rth straight month of declines in pending sales, which are an indicator of future closings, 1-2 months out. Since this count is based on signed contracts in Feb, when mortgage rates really started to take off, it is a strong indicator of how the market is reacting to the new rate environment, especially as it is entering the crucial spring season. Rates began rising in Jan & continued sharply higher in Feb. The average rate on the 30-year fixed mortgage is now more than a full percentage point higher than it was one year ago. The jump in mortgage rates could not come at a worse time, as spring is historically the busiest season for the housing market. Today's potential buyers are facing an expensive market. The median monthly payment on a new mortgage is now taking up a much larger share of a typical consumer’s income. It jumped 8.3% in Feb compared with Jan, according to a new index from the Mortgage Bankers Association. It is nearly 22% higher than it was in Feb 2021. For borrowers on the lower end of the market, that monthly payment is up nearly 10% month to month.
Pending home sales fall in February, setting a grim tone as housing market enters key spring season
Stocks are seeing a lot of selling in the last ½ hour. The news on pending home sales is discouraging & the sudden rise in Treasury yields is very scary for traders who have become addicted to low interest rates. And the meetings for the big wigs in Europe are not providing encouragement for investors.
Dow Jones Industrials
No comments:
Post a Comment