Dow finished up 3, but advancers over decliners 3-2 & NAZ dropped 228. The MLP index added 1+ to the 223s & the REIT index was about even in the 362s. Junk bond funds were a little higher & Treasuries saw heavy buying, reducing yields. Oil went up 2+ to 88 & gold rebounded 12 to 1670 (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)
Sales of new US homes tumbled in Sep as high home prices & mortgage rates not seen in over a decade edged prospective homebuyers out of the market. New single-family home purchases fell 10.9% to a seasonally adjusted annual rate of 603K units, the Commerce Dept reported. The forecast expected new home sales – which account for a small percentage of total sales – to fall 13.9% last month. On an annual basis, new home sales are down 17.6%. The median new house price climbed nearly 14% in Sep from the year-ago period to $470K. That is also up about 8% from Aug. There were about 462K new homes on the market at the end of Sep, an increase from 465K units in Aug. The interest rate-sensitive housing market has borne the brunt of the Federal Reserve aggressive campaign to tighten policy & slow the economy. Policymakers already lifted the benchmark federal funds rate 5 consecutive times – including 3 75-basis-point increases in Jun, Jul & Sep – & have shown no sign of slowing down as they try to crush inflation that is still running near a 40-year high. The average rate for a 30-year fixed mortgage climbed to 6.94% last week, according to the latest data from mortgage lender Freddie Mac. That is more than double just one year ago, when rates stood at 3.09%. Combined with high home prices, the rapid rise in borrowing costs has pushed many entry-level homebuyers out of the market.
New home sales tumble as mortgage rates march higher
Alphabet (GOOG) described its plans to reduce hiring as Google's parent company reported its Q3 earnings. "Our Q4 headcount additions will be significantly lower than Q3," CEO Sundar Pichai said, adding that the tech giant will be "focused on moderating operating expense growth." He said that Alphabet (GOOG) has "been
clear that we’re going to moderate our pace of hiring going into Q4 as
well as 2023." In Jul, Alphabet (GOOG) also expressed plans to slow hiring for the rest of the year. CFO Ruth
Porat, reiterating Alphabet (GOOG) comments from the Q2 call, said
the company's "actions to slow the pace of hiring will become more
apparent in 2023." The company reported $69B in 3rd-qtr revenues, up 6%
from the $65B in the same period last year but lower
than the roughly $70.6B expected. It said EPS was $1.06, which also came in lower than estimates. Meanwhile, Google advertising generated $54.4B in revenue for the 3rd qtr,
compared to $53.1B in 2021's Q3. According to Alphabet (GOOG), YouTube
ads came in at $7.1B, a slight drop year-over-year. GOOG stock sank 10.11 (10%).
If you would like to learn more about GOOG, click on this link:
club.ino.com/trend/analysis/stock/GOOG?a_aid=CD3289&a_bid=6ae5b6f7
Google parent company Alphabet says it’s curbing hiring pace amid earnings miss
Boeing (BA), a Dow stock, reported a $3.3B quarterly loss as problems in its
defense unit countered strides in its commercial aircraft business. The
manufacturer, however, generated nearly $3B in free cash flow in
the 3 months ended Sep 30, up from outflows of $507M a
year earlier. BA reiterated its forecast to achieve positive free
cash flow for the year. Q3 revenue rose 4% from last year to $15.9B & its more
than $3B quarterly loss widened compared with a $132M loss
a year earlier. “We’re not anticipating or suggesting that the supply chain world is
going to get much better in the near term,” CEO Dave Calhoun said. “We expect it will continue to be
challenged over the course of 2023.” The company reported losses of $2.8B in
its defense unit on programs including the KC-46 tanker & Air Force
One. The company previously disclosed losses of more than $1B associated with modifying 2 747 jumbo jets to serve as Air Force One. The commercial unit’s revenue rose 40% from a year ago to $6.2B. It delivered 112 planes in Q3, up from 85 a year
earlier. Deliveries of its 787 Dreamliner resumed in Aug after a pause for much of the previous 2 years to address a series of manufacturing flaws. Adjusted loss per share was $6.18 vs expected EPS of 7¢ & revenue of $15.96B was below $17.7B expected. The stock sank 12.74 (9%).
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA?a_aid=CD3289&a_bid=6ae5b6f7
Boeing reports quarterly loss on problems in Air Force One, tanker programs
Gold futures settled at their highest price in nearly 2 weeks, as the US $ index & Treasury yields continued to
weaken.
A weaker $ has been good news for bullion investors, but gains could be capped well ahead of the $1700 level for gold. Treasury yields have been
steadily declining & that has helped make non-interest bearing gold
look more attractive.
Gold for Dec rose $11 (0.7%) to settle at $1669
an ounce, the highest most-active contract finish since Oct 14.
Gold settles at highest price in nearly 2 weeks as dollar, yields retreat
Oil futures settled higher, finding support on the back of a weaker US $, as well as a weekly decline in domestic gasoline stockpiles. The Energy Information Administration (EIA) reported that supplies of crude rose 2.6M barrels last week, but gasoline fell by 1.5M barrels. The EIA data was more bullish than the American Petroleum Institute's inventory data & lower gasoline inventories implies the economy & driving are not as weak as expected. US benchmark West Texas Intermediate crude for Dec delivery rose $2.59, (3%) to settle at $87.91 a barrel. That was the highest front-month contract finish since Oct 13.
Oil prices finish higher, supported by a weaker U.S. dollar and weekly fall in gasoline supplies
After a strong 2 day run, stocks were entitled to a rest. They were higher in the AM, but sellers returned around midday & dominated the rest of the session. Of course, disappointing earnings from the big tech companies did not help matters. Tomorrow will be a very big day for stocks:
Gross Domestic Product, 3rd Quarter 2022 (Advance Estimate)
October 27
Dow Jones Industrials
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