Dow went up 182, advancers over decliners 4-3 & NAZ climbed 123. The MLP index was flattish at 215 & the REIT index added 2+ to the 382s. Junk bond funds were lower & Treasuries had heavy selling, raising yields. Oil slid back to the 71s (another yearly low) & gold settled up 4 to 1802 (more on both on both).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Mortgage rates decreased for the 4th consecutive week, due to increasing concerns over lackluster economic growth. Over the last 4 weeks, mortgage rates have declined 3 qtrs of a point, the largest decline since 2008. While the decline in rates has been large, homebuyer sentiment remains low with no major positive reaction in purchase demand to these lower rates. "While the decline in rates has been large, homebuyer sentiment remains low with no major positive reaction in purchase demand to these lower rates," said Sam Khater, Freddie Mac's chief economist. Mortgage rates are still more than double what they were a year ago, mirroring a sharp rise in the yield on the 10-year Treasury note. The yield is influenced by a variety of factors, including global demand for Treasuries & investor expectations for future inflation, which heighten the prospect of rising interest rates overall. The CME FedWatch tool shows about an 80% chance of a 50 basis point increase & a 20% chance of another 75 basis point lift the Fed's next meeting. A basis point is one hundredth of 1%. The sharp rise in mortgage rates this year, combined with still-climbing home prices, have added hundreds of $s to monthly home loan payments relative to last year, when the average rate on a 30-year mortgage barely got up above 3% much of the time. That's created a significant affordability hurdle for many would-be homebuyers, spurring this year’s housing market downturn. Sales of previously occupied US homes fell for the 9th consecutive month in Oct, hitting the slowest pre-pandemic annual sales pace in more than 10 years.
Mortgage rates drop as increasing concerns over declining economy loom
Online prices fell 1.9% in Nov, marking the largest drop in since May 2020, according to a recent Adobe Analytics report. The Adobe Digital Price Index (DPI), which analyzes 18 product
categories, showed that Nov marked the 3rd consecutive month when
prices declined on an annual basis. The data showed that prices in
Nov also fell 3.2% on a monthly basis. 15 of the 18
categories tracked by Adobe saw month-over-month price decreases in
Nov, although this was heavily driven by "heavy discounting during
Cyber Week." Adobe previously reported that discounts during the 5-day period spurred so much demand that consumers collectively spent a hefty $35.3B, up 4% year over year. Shopping on Black Friday & Cyber Monday even marked record highs. During Nov, computers saw the biggest drop with prices slipping
18% compared to a year ago. Prices were also down 5.1% since Oct. The electronics category
wasn't far behind. Prices fell 13.4% year-over-year & down 4.5% on a
monthly basis. Both categories had the largest annual drops since Adobe
began tracking prices in 2014. The toy & sporting goods
categories also benefited from holiday discounts with prices falling
7.7% & 5.7% on an annual basis, respectively. Prices for both
categories also dipped 4.2% & 4.3% on a monthly basis, respectively. However, critical items such as groceries didn't see a price drop. Rather, online prices for food were up 13.7% compared to a year ago. Still,
this is the 2nd consecutive month when annual price increases for
food online have come down from record highs. For instance, in Oct,
food prices were up 14% annually. That's down from Sep & Aug
when prices were up 14.3% & 14.1%, respectively. Overall, online spending throughout the entire month of Nov reached $116.5B, which is up 1.7% annually. The
Nov DPI isn't adjusted for inflation, but the 1.9% drop in prices
is still a clear sign that "strong consumer spending has been driven by
net-new demand—and not simply higher prices," Adobe said.
Online prices reportedly see largest decline in months
While placing an emphasis on lower-emission initiatives
over the next 5 years, ExxonMobil (XOM), a Dow stock & Dividend Aristocrat, will add $20B to its
repurchase program to boost shareholder returns & increase annual
divs. The energy company released its corp plan
over the next 5 years & announced the buyback option would grow to
$50B "with a sizeable increase in investments aimed at emission
reductions and accretive lower-emission initiatives." Annual
capital expenditures will remain at $20-25B, lower-emission
investments will reach approximately $17B to notch an increase of
almost 15%, while earnings & cash flow are expected to double by
2027. Capital & exploration expenditures
totaled $17B in 2021. Cash flow from operating activities was $48B. CEO Darren Woods said
the 5-year plan will drive leading business outcomes & is a
continuation of the path that has delivered industry-leading results in
2022. "We view our success as an ‘and’ equation, one in which we
can produce the energy and products society needs — and — be a leader in
reducing greenhouse gas emissions from our own operations and also
those from other companies," he continued. "The corporate
plan we’re laying out today reflects that view, and the results we’ve
seen to date demonstrate that we’re on the right course." The stock inched up 62¢.
If you would like to learn more about XOM, click on this link:
club.ino.com/trend/analysis/stock/XOMa_aid=CD3289&a_bid=6ae5b6f7
ExxonMobil announces major boost in shareholder returns
Gold notched a 3rd straight gain, with prices settling back above $1800 an ounce for the first time in 4 sessions. Weakness in the $ & purchases of gold by the Chinese central bank as part of the reason why gold has climbed. Feb gold rose $3 to settle at $1801 per ounce. Prices had settled below the key $1800 mark in each of the previous 3 trading sessions.
Gold Prices Settle back Above $1,800, Up a Third Straight Session
US oil futures settled lower, down a 5th straight session, but an oil leak that led to a shutdown of the Keystone Pipeline & talk of a potential buyback of oil to refill US reserves helped to limit price losses. The White House said in Oct
that the Biden administration intends to repurchase oil for the
Strategic Petroleum Reserve when prices are at or below $67-72. US
benchmark WTI crude for Jan fell 55¢ (0.8%) to settle at $71.46 a barrel. With US prices now within that
price band, that Biden SPR put’ is definitely playing a part in the
market finding price support in the low $70 range.
U.S. oil futures settle lower, but speculation of SPR refills emerge
Dow Jones Industrials
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