Dow fell 253, decliners over advancers 2-1 & NAZ lost 149. The MPL index slid back 1+ to the 189s & the REIT index was off 2+ to the 404s. Junk bond funds were mixed & Treasuries saw heavy buying, taking on the 10 year Treasury below 3%. Oil dropped 4 to the 105s & gold slid 10 to 1807 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
A historic housing shortage brought on by the one-2 punch of slow construction & strong pandemic-induced demand is finally starting to ease. Active listings for homes jumped 19% in Jun, the fastest annual pace since Realtor.com began tracking the metric 5 years ago. And the number of new listings during the month finally surpassed typical pre-Covid levels, up 4.5% from a year ago. Overall inventory, however, is still about ½ pre-Covid levels. Some markets that saw the biggest surges in demand during the pandemic are now among those seeing the biggest gains in supply: “We expect to see additional inventory growth in July, building on accelerated improvements seen throughout June,” said Danielle Hale, chief economist at Realtor.com, adding that the supply gains increased as the month progressed. And Hale said even more homeowners could decide to sell, adding new supply as buyers grapple with higher costs & difficulty finding homes that fit their budgets. Still, the expanding supply is not easing sky-high home prices yet. The median listing price in Jun hit another record high of $450K. Annual gains are moderating slightly, but still up almost 17%, partly because the share of larger, more expensive homes is rising. The costs of owning the median-priced home in the second quarter required 31.5% of the average US wage, according to a new report by ATTOM, a property data provider. That's the highest percentage since 2007 & up from 24% the year before, marking the biggest jump in more than 2 decades. Lenders generally see a 28% debt-to-income ratio as the ceiling for approving a mortgage. It's why some potential homebuyers today are no longer qualifying for a mortgage. As a result, the affordability of buying a home in Q2 dropped in 97% of the nation, according to ATTOM. That's up from 69% in the same qtr a year ago & the highest reading since just before the housing crash in the last recession.
The housing shortage is starting to ease after supply surged in June
The Food & Drug Administration (FDA) said vaccine manufacturers should update their Covid-19 booster shots to target the most recent omicron subvariants that are gaining ground in the US. Dr Peter Marks, head of the FDA's vaccine division, said manufacturers should update their shots to target omicron BA.4 & BA.5 in addition to the original strain of the virus that first emerged in Wuhan, China in 2019. The FDA wants to update the booster shots to provide longer lasting protection ahead of the fall, when public health experts expect another wave of infection as immunity from the vaccines wanes and people head indoors, where Covid spreads more easily, to escape the cold. The 2-dose primary vaccination series won’t immediately change, Marks said. In other words, people who are fully vaccinated will not start from scratch in the fall. They would simply receive an omicron shot to increase their protection against the virus. People who are not yet vaccinated will get 2 doses of the original vaccine first & then likely a jab with the new version. Marks said the FDA will review the new vaccines for safety, effectiveness & manufacturing quality to ensure they meet the highest standards before they authorize them for public use. The FDA's panel of independent experts voted overwhelmingly yesterday to recommend a new formula after an all-day meeting in which they evaluated the benefits & downsides of updating the shots ahead of a fall booster campaign in the US. But the vaccine makers are having trouble keeping up with the rapid evolution of the virus. But BA.1 has been pushed out by other omicron subvariants & is no longer circulating in the US Omicron BA.4 & BA.5 now make up more than 50% of Covid infections in the US, according to the Centers for Disease Control & Prevention. It's unclear how long it will take the vaccine makers to switch gears & develop shots that include BA.4 & BA.5 rather than the original version of omicron. The FDA has asked the companies to start clinical trials on these newer subvariants, Marks said. The FDA panel of experts generally favored targeting BA.4 & BA.5 in an effort to keep up with the evolution of the virus.
FDA backs changing Covid booster shots to target most recent omicron subvariants
The Supreme Court dealt a significant blow to the Biden administration's climate change agenda,
ruling that the Environmental Protection Agency (EPA) cannot pass
sweeping regulations that could overhaul entire industries without
additional congressional approval. The 6-3 decision limits how far the executive branch can go in forcing new environmental regulations on its own. "Capping
carbon dioxide emissions at a level that will force a nationwide
transition away from the use of coal to generate electricity may be a
sensible ‘solution to the crisis of the day,’ But it is not plausible
that Congress gave EPA the authority to adopt on its own such a
regulatory scheme in Section 111(d)," Chief Justice John Roberts said in
the Court's opinion, referencing Section 111 of the Clean Air Act. "A
decision of such magnitude and consequence rests with Congress itself,
or an agency acting pursuant to a clear delegation from that
representative body." The case stemmed from the Obama
administration’s 2015 Clean Power Plan which aimed to reduce carbon
emissions at power plants by pushing a shift from coal, to natural gas, & ultimately to wind & solar energy. The plan was put on hold by the
Supreme Court in 2016, & then repealed by the Trump administration & replaced by the less extreme Affordable Clean Energy (ACE) Rule. The question of how much power the EPA has was based on a provision
in Section 111 of the Clean Air Act, which grants the EPA power to set
"standards of performance" for existing sources of air pollutants as
long as they take into account cost, energy requirements, & non-air
health & environmental impacts. The
Trump EPA, in repealing the Clean Power Plan, took the position that
Section 111 only let them determine measures to be implemented at the
physical power plants themselves (an "inside-the-fence-line"
restriction) & not broadly-applied measures for entire industries. Similarly, West Virginia & other states claimed that Section 111 does not allow the EPA to go
so far as to make rules that would completely reshape American
electrical grids or force industries to eliminate carbon emissions
altogether.
SCOTUS deals Biden green agenda serious blow with EPA decision
Initial jobless claims ticked down last week, but were marginally higher than forecast, as investors continue to assess the labor market for potential signs of a slowdown. First-time filings for unemployment insurance in the US totaled 231K for last week, falling slightly from the prior week's upwardly revised 233K, the Dept of Labor said. The forecast had expected the latest reading to come in at 230K. The 4-week moving average, which smooths out some weekly volatility in the data, was 231K, an increase of 7K from the previous week's revised average, per the Labor Dept.
US jobless claims total 231,000 last week
Oil futures fell to
tally a loss for the month, but held on to a gain so far this year. OPEC+ confirmed an existing agreement to boost
production in Aug. The decision either illustrates the group's inability to boost production above what is planned or its indifference to do in order to meet western demand. West Texas
Intermediate crude for Aug fell $4.02 (3.7%) to settle at $105.76 a barrel. Based on the front-month contracts, prices
fell 7.8% for the month, but trade nearly 41% higher YTD.
Oil futures fall for the month, but hold on to a year-to-date gain
Gold futures settled lower for a 4th day in a row as expectations for aggressive action by the Federal Reserve diminished the precious metal's luster, sending prices down by more than 2% for the month to their lowest finish since Feb. Gold futures for Aug lost $10 (0.6%) to settle at $1807 per ounce, the lowest most-active contract finish since early Feb. Prices fell 2.2% for the month & 7.5% for the qtr & trade 1.2% lower YTD. The prospect of higher interest rates has dampened demand for gold because higher rates make bonds a more attractive investment by comparison, since gold doesn’t offer a yield. Powell said yesterday that there is “no guarantee” that the Fed could drive inflation back down to its 2% target without crashing the robust American labor market.
Gold falls more than 2% for the month, settles at lowest since February
Dow Jones Industrials
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