Dow fell 7, decliners over advancers 5-2 & NAZ was off 38. The MLP index went down 2+ to the 221s & the REIT index slid back 4+ to 364. Junk bond funds were mixed & Treasuries continued to be sold, taking yields higher. Oil sank 3+ to the 81s (a 6 week low) & gold retreated 12 to 1763 (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)
'''''New US home construction slumped again in Oct as rapidly rising mortgage rates continue to cool demand & the once red-hot housing market. Housing starts slid 4.2% last month to an annual rate of 1.42M units, according to new Commerce Dept data. That is above the forecast for a pace of 1.41M units. Applications to build, which measures future construction, fell to an annual rate of 1.53M units. Permits for construction of one-family homes, which account for the biggest share of homebuilding, also dropped to the lowest since the early months of the COVID-19 pandemic. The data comes one day after the National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, fell for the 11th consecutive month to 33, marking the worst stretch for the housing market since the survey launched in 1985. Any reading above 50 is considered positive; prior to this year, the gauge has not entered negative territory since 2012, excluding a brief, but steep, drop in May 2020. The index has fallen to ½ of what it was just 6 months ago, when it stood at 76. It peaked at a 35-year high of 90 in Nov 2020, buoyed by record-low interest rates at the same time that American homebuyers — flush with cash & eager for more space during the pandemic — started flocking to the suburbs. "Higher interest rates have significantly weakened demand for new homes as buyer traffic is becoming increasingly scarce," said NAHB Chair Jerry Konter.
Housing starts fall again in October as high mortgage rates sap demand
The US job market remains healthy as fewer Americans applied for unemployment benefits last week, despite the Federal Reserve's rapid interest rate hikes this year intended to bring down inflation & tighten the labor market. Applications for jobless claims last week fell by 4K to 222K from 226K the previous week, the Labor Dept reported. The 4-week moving average rose by 2K to 221K. The total number of Americans collecting unemployment aid rose by 13K to 1.5M. a 7-month high, but still not a concerning level. Applications for jobless claims, which generally represent layoffs in the US, have remained historically low this year, deepening the challenges the Federal Reserve faces as it raises interest rates to try to bring inflation down from near a 40-year high. Steady hiring, solid pay growth & low unemployment have been good for workers, but have also contributed to rising prices.
Unemployment Claims Drop, Complicating Anti-Inflation Measures
Macy's (M) raised its earnings forecast for the year as strong luxury sales
boosted the department store operator's qtr & fresh merchandise
arrived for the holidays. The company left its revenue guidance
unchanged though, after trimming projections in Aug, as it faces a
tougher sales backdrop during the retail industry's most crucial
qtr. The updated outlook came after Macy's reported Q3
revenue & earnings that topped expectations. CEO Jeff Gennette said the company can hold the line on prices
because it has fresh merchandise. That has allowed it to bring in new
apparel, home goods & other gift-giving items. He said it is not
seeing customers trade down to cheaper brands. However, he added that
Macy's did see a drop in sales in the final weeks of Oct & early
Nov. Store & website visits remained the same — but the browsing
did not lead to buying. In the past week, he said, Macy'’s has seen a
return to a better performance. “Is that a slowdown in the
consumer confidence that we are going to take all the way through the
fourth quarter?” Gennette added. “Or is it going back to the 2019 buying
patterns when those weeks I’m quoting were actually consistent with the
trend we had before ramping into Christmas this year? Right now, we are
watching it very carefully.” For Q3 EPS was 39¢ unadjusted, down
from 76¢ a year earlier. Revenue:was $5.23B vs $5.2B expected. Comparable sales on an owned-plus-licensed basis fell 2.7% during the
period from a year ago. That was better than 4.3% decline that was expected. The stock rose 2.96 (15%).
If you would like to learn more about Macy's, click on this link:
club.ino.com/trend/analysis/stock/M?a_aid=CD3289&a_bid=6ae5b6f7
Macy’s raises earnings forecast, says it has fresh inventory for the holidays
Gold futures settled lower, pressured by strength in the $ & Treasury yields on expectations for higher interest
rates. Prices for the precious metal got beat up after a round of hawkish Fed
speak reminded investors that the risks of the Fed taking rates above 5%
are clearly there. St
Louis Fed Pres James Bullard's comment that the policy rate is not
yet sufficiently restrictive is a big reminder that traders need to see the
labor market weaken significantly before gold can price to end its tightening cycle.
Gold for Dec fell $12 (0.7%) to settle at $1763 an
ounce.
Gold Futures Settle Lower As The U.S. Dollar Gains On Bets For Higher Interest Rates
Oil futures fell for a 2nd straight session, with US prices down by nearly 5% to settle at their lowest since the end of Sep. Stagflationary economic data, rising COVID cases in China & hawkish Federal Reserve chatter have all been added headwinds on the oil market today. If news flow remains as negative as it has been today, then a test of the late Sep lows in the mid-to-upper $70s will become increasingly likely. US benchmark West Texas Intermediate crude for Dec fell $3.95 (4.6%) to settle at $81.64 a barrel, the lowest finish for a most-active contract since Sep 30.
U.S. oil prices drop by nearly 5% to end at their lowest since late September
Dow Jones Industrials
No comments:
Post a Comment