Dow fell 115, decliners over advancers 3-2 & NAZ was off 117. The MLP index stayed in the 225s & the REIT index was off 1+ to the 359s. Junk bond funds slid lower & Treasuries saw selling, bringing higher yields. Oil lost 1+ to the 88s & gold continued weak, dropping 18 to 1631.
AMJ (Alerian MLP index tracking fund)
The housing market, which has slowed significantly from last year as mortgage rates continue to edge higher, could be what pulls the US into a recession next year, according the Mortgage Bankers Association (MBA). Mortgage interest rates have risen significantly since last year amid the Federal Reserve's continued rate hikes. The average 30-year fixed-rate mortgage moved from just above 3% at this time last year to nearly 7% currently, according to data from Freddie Mac. And as interest rates rise, the housing market has slowed due to lower demand for new homes & refinances, Mike Fratantoni, the MBA's chief economist & senior VP, said. This slowing housing market is expected to pull the US into a recession, which is forecasted to come at the beginning of 2023. But the housing market could also be what pulls the economy out once again, Fratantoni added. Interest rates could begin to decline next year after the Fed eases its rate hikes. Mortgage rates could slip to 5.5% by the end of next year & drop even lower after that, according to the MBA's forecast. Once rates move lower, activity in the housing market could pick up once again, helping to guide the US out of a recession. Although the Federal Reserve will likely continue to raise rates in the months ahead, economists predict a recession is on the horizon for the beginning of 2023. "We are really highly confident we are going to be in a recession next year," Fratantoni said
Housing market will lead us into a recession, and will lead us out: MBA forecast
The Bank of England (BOE) warned that the UK is facing its longest recession since records began, with the economic downturn expected to extend well into 2024. The central bank described the outlook for Britain's economy as "very challenging," noting that unemployment would likely double to 6.5% during the country's 2-year slump. UK GDP is projected to decline by around 0.75% over H2-2022, reflecting the squeeze on real incomes from surging energy & tradable goods prices, the Bank said. Growth is projected to continue to fall throughout 2023 & H1-2024, as "high energy prices and tighter financial conditions weigh on spending," it added. The forecast, outlined at the Bank's Monetary Policy Committee meeting today, would constitute the country's longest — though not deepest — recession since the 1920s when reliable records began. At its meeting in Aug, the Bank had predicted the UK was facing its longest recession since the global financial crisis, lasting 5 qtrs to the end of 2023. The projections come as the BOE raised its benchmark interest rate by a historic 75 basis points today — its largest increase since 1989.
UK faces longest recession since records began, Bank of England says
Sales in the US for the Ford (F) fell by 10% in Oct amid persistent inflation & supply-chain issues. For
the month of Oct, Ford sold 158K new vehicles, a far drop from
last year's sales of 176K vehicles. Moreover, the decline also marked
the 2nd consecutive month as the automaker struggles with supply
shortages for semiconductors as well as consumer anxiety. The automaker also saw its #1 revenue source in truck sales
decline by 7.7%. Last month, that approximately 40K
vehicles were still awaiting parts, with expected completion by the end
of the year. The company's comments did not directly address
those delays, but Ford's VP of sales, Andrew Fick, said, "Ford continues to see strong demand for its vehicles, with
orders for ’23MY vehicles up 134 percent over this time last year. The
all-new Super Duty saw a record 52,000 orders in just five days. The
F-Series continued as America’s No. 1 truck, expanding its lead over our
second-place competitor to more than 100,000 trucks this year." SUV sales also fell last month by 14.1%, with a little more than 67K
new vehicles sold after a surge earlier this summer. However, electric vehicle sales accelerated by 119% but only totaled 6K sold vehicles for the entire month. The stock rose 29¢.
If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F?a_aid=CD3289&a_bid=6ae5b6f7
BUMPY ROAD: Sales for Ford drop by hefty amount as supply-chain issues rage
Thoughts about more rate hikes as well as recession fears are keeping investors on the sidelines. Tomorrow's employment report may bring cheer.
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