Dow gained 97 advancrs over decliners 3-2 & NAZ added 110. The MLP index was off 3+ to the 224s & the REIT index flattish in the 385s. Junk bond funds were mixed & Treasuries saw more buying, reducing yields. Oil continued to see selling, settling down 3+ to the 77s & gold was up 12 to 1752 (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 unexpectedly jumped in Oct even as high home prices and mortgage rates not seen in over a decade have rapidly eroded affordability. New single-family home purchases rose 7.5% to a seasonally adjusted annual rate of 632K units, the Commerce Dept reported. The forecast expected new home sales — which account for a small percentage of total sales — to fall 5.5% last month. On an annual basis, new home sales are still down 5.8%. The median new house price climbed nearly 15.4% in Oct from the year-ago period to $493K. That is also up more than 8% from Sep. There were about 470K new homes on the market at the end of Oct, the report shows, a slight increase from the previous month. "In the bigger picture, this year's steep rise in mortgage rates has had a notable impact on middle-class home buyers," said Holden Lewis, a home & mortgage expert at NerdWallet. "New home sales are skewing toward higher-income buyers. In October, 48% of new homes sold for $500,000 or more; a year earlier, the figure was 33%." The interest rate-sensitive housing market has borne the brunt of the Federal Reserve's aggressive campaign to tighten monetary policy & slow the economy. Policymakers already lifted the benchmark federal funds rate 6 consecutive times — including 4 75-basis-point increases in Jun, Jul, Sep & Nov — & have shown no sign of pausing as they try to crush inflation that is still running near a 40-year high. A basis point is one hundredth of 1%.
New home sales unexpectedly climb despite steep mortgage rates
The holiday shopping season is fully underway with Black Friday just days away. 3 weeks into the season & retailers are finding sales so far are dead even with last year at this time as consumers fight an uphill battle with inflationary headwinds. Shoppers are hitting their keyboards, spending $64.6B online, up 0.1% year-over-year (YoY) & essentially flat, according to Adobe Analytics. There have been 9 days when shoppers spent over $2B online in a single day (12 days at over $3B online) — on par with levels in 2021. "We are beginning to see the impact of earlier holiday deals, as retailers contend with oversupply and a softening spending environment," said Vivek Pandya, lead analyst Adobe Digital Insights. "E-commerce has remained resilient thus far, a strong start to the season as we look towards Cyber Monday, which is expected to set new records for online shopping." Consumers have seen holiday deals come earlier & more frequently. Discounts for toys have hit a record high, peaking at 30% off listed price in the first 3 weeks of the season. Online sales of toys are up 172%, when compared to daily average sales last month There areas where discounts have been seen the most are in tech: electronics (22%), computers (14%), appliances (13%) & televisions (13%).
Holiday sales flat as retailers forced to offer deals
The Census Bureau announced that new orders
for manufactured durable goods increased in Oct, despite persistent
inflation & global economic instability. Non-military new orders for capital goods
increased by $1.7B (1.9%) totaling $91B, whereas ships
rose by $1.1B to $83.9B in Oct. Moreover, inventories
rose by 0.7% to 2$22.6B. Orders for overall durable goods
also went up by 1%, or $2.8B, totaling $227B.
Previously, orders increased by 0.3% in Sep, a noticeable change
between the 2 correlating months. The survey indicates that
companies, despite growing manufacturing costs, are looking to improve
productivity thru greater investments amid the uncertainty of a
Federal Reserve interest rate hike. Also, shipments of manufactured durable goods have steadily increased
in 17 of the last 18 months. Domestically, consumers
have been resilient in the face of inflation, spending more on products
boosting manufacturers' bottom line; however, a global economic
slowdown still looms. One of the ways economists measure a
country's GDP via gov equipment investment is thru core
capital goods shipments, which have risen by 1.3% since Jan. The exact estimates for Q4 GDP will
be released at the beginning of the new year. The data provided by the
census bureau indicates it the US will likely have a strong GDP at the
start of 2023.
New orders for US durable goods increased during October despite inflation
Gold prices settled higher ahead of the release of minutes from the Federal Reserve's most recent policy meeting, while investors digested US economic data showing business conditions deteriorating, suggesting slower economic growth. Gold prices for Dec rose $5 to settle at $1745 per ounce. Investors eyed the Fed minutes & a big batch of US economic data in the last day of trading before Thanksgiving. The ICE US Dollar Index a measure of the currency against a basket of major rivals, was off 0.8% to 106.40. The market is expecting the latest minutes of the Federal Open Market Committee meeting, which will be published tomorrow to provide clues on whether the Fed is set to end its pace of sharp interest rate hikes in response to evolving economic conditions.
Gold futures settle higher amid flurry of economic data, as traders await Fed minutes
Federal Reserve officials earlier this month agreed that smaller interest rate increases should happen soon as they evaluate the impact policy is having on the economy, meeting minutes indicated. Reflecting statements that multiple officials have made over the past several weeks, the meeting summary pointed to small rate hikes coming. Markets widely expect the rate-setting FOMC to step down to a 0.5 percentage point increase in Dec, following 4 straight 0.75 percentage point hikes. Though hinting that smaller moves were ahead, officials said they still see little signs of inflation abating. However, some committee members expressed concern about risks to the financial system should the Fed continue to press forward at the same aggressive pace. “A substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate,” the minutes stated. “The uncertain lags and magnitudes associated with the effects of monetary policy actions on economic activity and inflation were among the reasons cited regarding why such an assessment was important.” The minutes noted that the smaller hikes would give policymakers a chance to evaluate the impact of the succession of rate hikes. The central bank's next interest rate decision is Dec 14. The summary noted that a few members indicated that “slowing the pace of increase could reduce the risk of instability in the financial system.” Others said they'd like to wait to ease up on the pace. Officials said they see the balance of risks on the economy now skewed to the downside.
Fed officials see smaller rate hikes coming ‘soon,’ minutes show
Oil futures closed lower as investors kept tabs on Group of Seven talks on a price cap for Russian oil. The US & its allies are trying to agree on a price cap for the warring nation’s crude. A report in early trading, had officials discussing a level around $60 a barrel & the cap still could be set as high as $70. A later report said talks between EU nations on where to set a proposed price cap on Russian oil had stalled. The report said govs were split over how to design the plan. West Texas Intermediate crude for Jan fell $3.01 (3.7%) to settle at $77.94 a barrel. Jan Brent crude, the global benchmark, was down $2.95, or 3.3%, at $85.41 a barrel, while Feb Brent, the most actively traded contract, was off $2.56, (2.9%) at $85.14 a barrel. It was reported that US officials want to set the cap high enough to provide Russia incentive to keep selling crude on to the global market, with prewar prices of around $65 a barrel. Russian oil has traded at around a $26 a barrel discount to Brent in recent days. The Russian cap news added to demand concerns around China that have persisted over several trading sessions. China, among the world’s largest energy users, has been grappling with a surge in COVID-19 cases. Shanghai tightened some rules on public life today. Demand concerns were also fueled by the latest economic assessment from the Federal Reserve.
Oil price sinks as talks continue over Russia price-cap plan
The Dow was a little higher after the Fed minutes were released. But some traders are away on holiday, so price changes may not be meaningful. Best holiday wishes to everybody!!!
Dow Jones Industrials
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