Dow was off 146, decliners over advancers 3-2 & NAZ dropped 181. The MLP index was steady in the 225s & the REIT index stayed even, near 360. Junk bond funds remained weak & Treasuries continued to be sold, taking yields higher. Oil fell 1+ to the 88s & gold declined 18 to 1631 (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)
The CEO of AP Moller-Maersk said "there are plenty of dark clouds on the horizon" as the Danish shipping company reported its quarterly financial results. "With the war in Ukraine, an energy crisis in Europe, high inflation and a looming global recession there are plenty of dark clouds on the horizon," CEO Søren Skou said. "This weighs on consumer purchasing power which, in turn, impacts global transportation and logistics demand." The US & some European countries and elsewhere have been grappling with persistent inflation. In Sep, US inflation — as measured by the consumer price index — rose 0.4% from Aug & 8.2% from the prior year. The European Commission’s Eurostat said Mon it expected annual euro area inflation, worsened in part by the energy crisis exacerbated by Russia's war in Ukraine, to come in at 10.7% in Oct after hitting 9.9% the prior month. The IMF & other organizations have raised concerns about the risks of the global economy potentially falling into a recession. Skou's statement continued by adding that Maersk expects a "slowdown of the global economy to lead to a softer market in Ocean" but plans to "continue to pursue the growth opportunities within our logistics business." Its Ocean business, which the CEO said helped drive Maersk's "exceptional results" in Q3, generated $18B in revenue. He also noted "freight rates have peaked and started to normalize during the quarter, driven by both decreasing demand and easing of supply chain congestion."
CEO's warning as nations grapple with energy crisis, recession, Ukraine war
Mortgage rates fell below 7% this week after breaching that threshold last week for the first time since Apr 2002. The drop comes a day after Federal Reserve Chair Jerome Powell said the central bank's monetary tightening policies are impacting demand in the most interest-rate-sensitive sectors of the economy, such as housing. Yesterday the Fed raised its short-term lending rate by another 0.75 percentage points, 3 times its usual margin, for a 4th time this year. Its key rate now stands at 3.75-4%, with more increases likely on the horizon. The 30-year fixed-rate mortgage averaged 6.95% with an average 0.8 point as of Nov 3, down from last week when it averaged 7.08%, mortgage securitizer. A year ago at this time, the 30-year FRM averaged 3.09%. The 15-year fixed-rate mortgage averaged 6.29% with an average 1.2 point, down from last week when it averaged 6.36%. A year ago at this time, the 15-year FRM averaged 2.35%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 5.95% with an average 0.2 point, down from last week when it averaged 5.96%. A year ago at this time, the 5-year ARM averaged 2.54%. "Mortgage rates continue to hover around 7%, as the dynamics of a once-hot housing market have faded considerably," said Sam Khater, Freddie Mac's Chief Economist. "Unsure buyers navigating an unpredictable landscape keeps demand declining while other potential buyers remain sidelined from an affordability standpoint." Khater continued, "Yesterday’s interest rate hike by the Federal Reserve will certainly inject additional lead into the heels of the housing market."
Mortgage rates remain high, but dip under 7%
New unemployment claims in the US continue to decline & indicate a strong labor market that's come a long way since the start of the COVID-19 pandemic 2 years ago. The Labor Dept said in its weekly report that there were 214K new filings last week -- beating forecasts oft 220K new jobless claims. The figure is a decline of about 15K filings from the previous week. First-time filings are typically viewed as a reflection of the national pace of layoffs. A total of about 1.4M workers were collecting unemployment benefits for last week, which is the lowest total figure since 1970. The total decreased by more than 70K last week. The figures came about a week after the dept reported that there were 11.3M job openings in the US at the end of Jan, a historically high number.
Unemployment claims in U.S. decline again
Gold futures tumbled as the $ & Treasury yields advanced after the Federal Reserve delivered its 4th 75 basis point interest rate hike since the start of the year, pushing prices for the precious metal to their lowest finish in more than 2½ years. Gold prices for Dec fell $19 (1.2%) to settle at $1630 per ounce after trading as low as $1618. Prices for the most-active contract haven't traded or settled at levels this low since Apr 2020. The Fed aftermath is leading to pain for bullion as Fed Chair Powell has signaled rates will be much higher. The peak in the $ was potentially going to be put in place, but…Powell said they are worried more about doing too little on inflation than too much. The Fed aftermath is leading to pain for bullion as Fed Chair Powell has signaled rates will be much higher. Treasury yields climbed, with the 10-year yield, up 7.4 basis points to 4.128%. The ICE US Dollar Index, a gauge of the $'s strength against a basket of rivals, was up 1.4% at 112.90.
US oil futures declined 2%, with prices pressured by strength in the $ & worries that aggressive rate hikes by Federal Reserve will lead to an economic recession. Concerns that the Fed is much more likely to overshoot on rates rather than doing too little have grown, raising the risk of the economy tripping into a recession. That's a particularly bearish prospect for crude prices due to the potential demand hit & is further reinforced by the stronger $ that weighs on $-denominated crude prices. US benchmark West Texas Intermediate crude for Dec fell $1.83 (2%) to settle at $88.17. Prices yesterday had settled at $90, the highest front-month contract finish since Oct 10,
U.S. Oil Futures Down 2% as the Fed Rate Hike Boosts the Dollar
Investors are still assessing the impact of the rate hike & future hikes. As a result trading was choppy. Tomorrow the jobs report will drive buyers or sellers. And there is a lot talk about a coming recession.
Dow Jones Industrials
No comments:
Post a Comment