Dow dropped 254, decliners over advancers about 4-1 & NAZ fell 141, The MLP index was off 4+ to 221 & the REIT index slid back 1+ to 421. Junk bond funds drifted lower & Treasuries were sold again, raising yields (more below). Oil retreated 4+ to the 92s after yesterday's big rise & gold sank 13 to 1736.
AMJ (Alerian MLP index tracking fund)
Home buyers are regaining some buying power as the market shifts from "predominantly" favoring sellers over the past 2 years, according to an industry expert. In a recent survey conducted by Realtor.com, 92% of homeowners who sold their home within the past year said they "accepted some buyer-friendly terms." About 41% accepted some contract contingencies relating to appraisals, home inspections, home sales & financing. This data suggests that "negotiation is back on the table" for housing prices and contract terms. Homes that were sold at or above asking price peaked in Feb & Mar at 82% when mortgage rates hovered at 4%. Last month, 69% of homes were sold at or above asking as mortgage rates sat near 6%. The 30-year fixed rate was 5.55% last week, according to mortgage buyer Freddie Mac. Meanwhile, homeowners who sold below asking rose from 18% at the beginning of the year to 31% last month, according to the real estate listings website. Buyers are getting more picky. Nearly every surveyed homeowner, 95%, who sold their home within the past month said the buyer requested an inspection. That's up from 82% of sellers who sold 6-12 months ago. The number of buyers that asked for a home repair following a home inspection more than doubled last month 6-12 months ago. By contrast, the number of sellers who refused to pay for any repairs fell from 8% to zero 6-12 months ago. "The overheated housing market of the past two years, which predominantly favored sellers, is beginning to regain a sense of normalcy, which is welcome news for home buyers," George Ratiu, manager of economic research for Realtor.com, said
Homebuyers are taking back their bargaining power, survey shows
There were nearly 1M more job openings than expected in Jul, an inflationary sign that the labor market is still extremely tight, the Bureau of Labor Statistics reported. Available positions totaled 11.2M for the month, well in excess of the 10.3M estimate, according to the Job Openings & Labor Turnover Survey (JOLTS). The total was about 200K higher than the 11.0M in Jun, up from the initially reported 10.7M. Federal Reserve officials watch the JOLTS numbers closely for signs of slack in hiring. The Jul numbers reinforced that there is still a considerable shortage of workers for available positions, with openings outnumbering available workers by just shy of a 2-to-1 margin. That, in turn, is inflationary as employers are forced to offer higher compensation to lure workers at a time when prices are rising near their fastest pace in more than 40 years. Hiring declined during the month, falling to 6.4M. Quits, a closely watched metric for worker confidence, also declined, down to 4.2M as those leaving their jobs as a percentage of the workforce declined one-tenth of a percentage point to 2.7%, still relatively high by historical standards. Changing jobs has proven lucrative during the Covid era, with job switchers seeing an average 6.7% annual wage growth rate, well ahead of the 4.9% rate of those who have stayed in their positions, according to the Atlanta Fed. Total separations declined slightly in Jul to 5.9M, as the rate edged lower to 3.9%. Layoffs & discharges were little changed at just under 1.4M. Total separations declined slightly in Jul to 5.9M, as the rate edged lower to 3.9%. Layoffs & discharges were little changed at just under 1.4M.
Job openings top 11.2 million in July, well above estimate and nearly double the available workers
Treasury yields rose after the 2-year rate hit its highest level since 2007 in the previous session. The yield on the short-term 2-year Treasury note last rose about 5 basis points to 3.487% — close to its highest level in nearly 15 years. The yield on the benchmark 10-year Treasury note rose 3 basis points to 3.142% & the yield on the 30-year Treasury bond rose 1 basis point to 3.259%. Yields move inversely to prices & a basis point is equal to 0.01%. Today ECB policymaker & Estonian central bank Governor Madis Muller said the central bank should discuss a 75-basis-point rate hike in Sep given exceptionally high inflation. Markets are still processing a Fri speech by Federal Reserve Chair Jerome Powell, in which he said the central bank would continue raising interest rates at a level that may cause “some pain” to the economy. Powell's comments led to 2 days of declines for the major US stock market averages.
10-year Treasury yield rises as traders assess Fed's next move
Dow Jones Industrials
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