Dow rose 84 after heavy selling this month, advancers over decliners 4-3 & NAZ inched up 6. The MLP index stayed near 212 & the REIT index was off 1+ to the 367s. Junk bond funds fluctuated & Treasuries were heavily sold again, driving higher yields (more below). Oil climbed higher in the 75s & gold rebounded 28 to 1826.
AMJ (Alerian MLP index tracking fund)
Congress released a new bipartisan spending bill that would fund the gov thru next fall. Federal spending will be increased from the last fiscal year under the bill & it will allocate $858B in military spending & more than $772B for domestic programs for the remainder of the fiscal year that ends in Sep. The $1.7T legislation includes sending additional funds to Ukraine to support its ongoing war with Russia, election reforms intended to clarify a VP's role in certifying electoral votes. "Finalizing the omnibus is critical, absolutely critical for supporting our friends in Ukraine," Senate Majority Leader Chuck Schumer said. The bill will also provide $40B to assist US communities recovering from drought, hurricanes & other natural disasters. Lawmakers are trying to pass the spending package before midnight on Fri to avoid the potential of a partial gov shutdown heading into Christmas. Senate Minority Leader Mitch McConnell had said he would look for a short-term package in the new year if the spending measure fails to gain bipartisan support this week. This would guarantee that the new Rep House majority would get to shape the legislation. Still, McConnell suggested the newly released spending package was a victory for Reps, even as many in the party are expected to vote against it. He said Reps were able to successfully add increased defense spending that goes beyond what Pres Biden requested while also scaling back some domestic spending on his list of priorities. "The Congress is rejecting the Biden administration's vision and doing the exact opposite," McConnell said. Meanwhile, House Minority Leader Kevin McCarthy would like to delay
Congress announces massive spending bill to avoid shutdown
New US home construction slumped again in Nov as high mortgage
rates combined with pervasive inflation continued to cool demand and
the once red-hot housing market. Housing
starts slid 0.5% last month to an annual rate of 1.42M units,
according to new Commerce Dept data That is
above forecast for a pace of 1.40M units. Applications
to build – which measures future construction – fell to an annual rate
of 1.34M units, a decrease of 11.2% from Oct. Permits for
construction of single-family homes, which account for the biggest share
of homebuilding, also dropped 7.1% to the lowest level since May 2020. 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 12th consecutive month to
31, 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.
Housing starts fall for third straight month as higher rates sting
Treasury yields rose after Japan unexpectedly raised its cap on 10-year Japanese gov bond yields, sparking a sell-off in global long-duration bond markets. The yield on the benchmark 10-year Treasury was up by 10 basis points at 3.69%, while the yield on the 30-year Treasury bond rose by more than 11 basis points to 3.74%. Yields move inversely to prices. The Bank of Japan caught markets off guard by tweaking its yield controls to allow the yield on its 10-year JGB to move 0.5% either side of its 0% target, up from 0.25% previously, in a move aimed at cushioning the effects of protracted monetary stimulus measures. The move prompted the Japanese ¥ & bond yields around the world to rise suddenly, while stocks in Asia-Pacific retreated.
Treasury yields rise as Japan unexpectedly loosens its yield cap
Dow Jones Industrials
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