Dow gained 127, advancers over decliners 5-2 & NAZ climbed 294 after key earnings reports. The MLP index went up 1+ to 207 & the REIT index stayed near 421. Junk bond funds were in demand so far today & Treasuries saw more buying ahead of the Fed announcement later today. Oil was up 2+ to the 97s & gold slid back 3 to 1715.
AMJ (Alerian MLP index tracking fund)
The Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey found mortgage applications fell 1.8% last week from the previous week. The decrease was the 4th week in a row as home purchase activity nears pandemic levels. "Mortgage applications declined for the fourth consecutive week to the lowest level of activity since February 2000," said Joel Kan, MBA's Associate VP of Economic & Industry Forecasting. The survey comes as inflation woes & market uncertainty have sparked worry in potential buyers, causing them to avoid entering the market. "Increased economic uncertainty and prevalent affordability challenges are dissuading households from entering the market, leading to declining purchase activity that is close to lows last seen at the onset of the pandemic," he added. "Weakening purchase applications trends in recent months have been consistent with data showing a slowdown in sales for newly constructed homes and existing homes." Among the turmoil, Kan said the data showed a stabilization in mortgage rates. He also expressed optimism for the coming months. "A potential silver lining for the housing market is that stabilizing mortgage rates and increases in for-sale inventory may bring some buyers back to the market during the second half of the year," Kan said. He continued: "With mortgage rates remaining well over 5%, refinance applications are now 83% below last year’s pace."
Home purchase activity nears pandemic levels
Sales of new US homes fell more than expected in Jun to the lowest level in 2 years as rising mortgage rates & the relentless increase in home values slowed activity by edging prospective homebuyers out of the market. New
single-family home purchases tumbled 8.1% to a seasonally adjusted
annual rate of 590K units, the lowest level since Apr 2020, the
Commerce Dept reported. They sruvey expected new home sales – which account for a small percentage
of total sales – to fall 5.2% last month. On an annual basis, new home sales are down 17.4%. The median new house price climbed 7.4% in Jun from the year-ago
period to $402K. There were about 457K new homes on the market at
the end of Jun, an increase from 447K units in
May. The interest rate sensitive housing market has started to cool noticeably in recent months as the Federal Reserve
moves to tighten policy at the fastest pace in 3 decades in order
to cool consumer demand & bring scorching-hot inflation under control. Combined with high home prices, the rapid rise in borrowing costs has
pushed many entry-level homebuyers out of the market. A new report from
Redfin last week showed that the share of sale agreements on existing
homes canceled in Jun was just under 15% of all homes that went under
contract – the highest since early 2020 at the height of the COVID-19
pandemic.
US new home sales drop to lowest level in 2 years
The White House announced that the Dept of Energy will be issuing a notice to sell 20M more barrels of oil for the Strategic Petroleum Reserve as part of the Biden administration's effort to bring gas prices down. This makes the 5th such sale that Pres Biden has authorized. The White House continued to blame "disruptions posed by Russia’s invasion" for the high prices while claiming that the Biden administration's actions are making a tremendous difference. "In fact, the Department of the Treasury estimates that as a result of these drawdowns both domestically and internationally, the price at the pump for Americans is up to about 40 cents per gallon lower than it otherwise would have been," the White House said. While gas prices are down significantly since a recent national average price of more than $5 per gallon in Jun, the average is still $4.33, compared to $3.16 from one year ago & approximately $2.39 when Biden first took office in Jan 2021. Reps slammed the White House after previous sales from the Strategic Petroleum Reserves after it was made known that Ms of barrels were being sent to European & Asian countries, including China. "The American people deserve answers as to why our emergency energy reserves are being sent to foreign adversaries like the Chinese Communist Party, compromising our energy security and national security," House Energy & Commerce Committee Ranking Member Cathy McMorris Rodgers said.
White House will sell another 20M barrels of oil from US reserves
Tech earnings are driving much the excitement in the stock market. However, everybody is still waiting to hear from the Fed later.
Dow Jones Industrials
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