Dow finished down only 10 with buying into the close, but advancers over decliners 3-2 & NAZ dropped 79. The MLP index fell 3+ to the 213s & the REIT index was steady at 370. Junk bond funds remained in demand & Treasuries continued to see heavy buying, dragging yields lower. Oil sold off 3+ to about 77 & gold soared 19 to 1845 (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)
Rep Leader Kevin McCarthy failed to secure enough support for
his bid to become House speaker during the chamber's first round of
voting today, the first time in a century that the majority party
failed to coalesce behind a speaker & forced more than one round of
voting. It was unclear immediately after the first round what next
steps Reps would take. McCarthy has vowed to hold as many rounds
as needed to secure the necessary 218 votes. He secured only 203 votes
in the first round of voting. During
a tense voice vote, all 212 Dems rallied unanimously around
incoming Minority Leader Hakeem Jeffries. 10 Reps voted
for McCarthy's only declared GOP rival, Rep Andy Biggs,
while 9 GOP lawmakers voted for other alternatives — Reps Jim Jordan, Jim Banks, Lee Zeldin of New York & Byron Donalds
of Florida. Rather than leave the House floor to go huddle with holdouts or his
lieutenants, McCarthy remained in the middle of the Rep section,
holding court. Other early signs indicated the Rep leader would
move to hold a 2nd round of votes quickly. In a bid to build conservative support for McCarthy, Jordan nominated McCarthy for speaker after the initial vote. McCarthy's
failure to win public support from his entire caucus has already cast a
shadow over the new Rep majority, exposing divisions within the
party that have existed for decades. The differences were deepened by
former Pres Trump, who emboldened a small band of
ultra-conservatives. Trump eventually backed McCarthy’s bid for
speaker, as did other influential conservatives such as Rep Marjorie
Taylor Greene. But the ex-pres's sway within the GOP caucus
did not prevent McCarthy’s initial defeat today. After the first vote, Biggs tweeted that the tally showed Reps “have made clear that our party deserves a new leader.” “McCarthy should stand down and allow us to select someone else in the next ballot,” he wrote.
Tech industry layoffs are reportedly happening faster than at any time during the COVID-19 pandemic. A report about the trend citing data from
Layoffs.fyi, a website launched by San Francisco internet entrepreneur
Roger Lee to track layoff events as they surface in media reports &
company releases. Technology-driven companies across industries
cut more than 150K jobs in 2022, according to the tracker. That
compares with the estimated 80K layoffs in Mar-Dec 2020 &
15K in all of 2021. Despite layoffs drastically slowing in 2021, tech companies in 2022
began to rapidly cut positions once again amid rising interest rates &
a slowing economy. Consumer & retail-based companies in the tech sector were some the hardest hit, The online tracker counted nearly 100 healthcare-related tech companies terminated an estimated 11K employees in 2022. While education tech companies
rapidly grew amid the onset of online learning & school shutdowns in
2020, companies in the same sector in 2022 cut more than 8K jobs. With
the lockdowns and travel restrictions of 2020 came massive layoffs for
travel-related tech industries in 2020. However, as the world reopened & travel resumed, travel companies in the tech sector were among the
areas the least impacted by layoffs in 2022.
Tech industry layoffs unfolding at faster rate than at any time during COVID-19
Home prices are falling into a deep winter chill, as higher mortgage rates push more buyers to the sidelines. Prices in Nov were still 8.6% higher than during the same month in 2021, but it was the first year-over-year reading in single digits in 21 months, according to CoreLogic. It is also the lowest rate of appreciation since Nov 2020. Prices are now 2.5% below the spring 2022 peak 7 are expected to continue to move lower this year. CoreLogic's forecast has price movement falling into negative territory by spring before rebounding to about 2-3% growth in the fall. “Although home price growth has been slowing rapidly and will continue to do so in 2023, strong gains in the first half of last year suggest that total 2022 appreciation was only slightly lower than that recorded in 2021,” said Selma Hepp, deputy chief economist at CoreLogic. “However, 2023 will present its own challenges, as consumers remain wary of both the housing market and the overall economic outlook.” Mortgage rates are back on the rise again after a brief reprieve in Nov & early Dec. Rates had more than doubled over the summer, with the average rate on the popular 30-year fixed loan exceeding 7%. It hit a high of 7.37% at the end of Oct, according to Mortgage News Daily. In Nov & Dec it fell back, hitting a low of 6.13% in mid-Dec, but is now back up over 6.5%. “Potential homebuyers are grappling with the idea of buying amid possible further price declines and a continued inventory shortage. Nevertheless, with slowly improving affordability and a more optimistic economic outlook than previously believed, the housing market could show resilience in 2023,” added Hepp.
Home price increases weakened sharply in November, posting the smallest annual gain in 2 years
Gold futures climbed to
settle at their highest since mid Jun. Fear & doubt across wider
financial markets mean gold has begun 2023 with a typical
New Year surge, attracting speculative inflows as traders see weak
growth, high inflation & a worsening geopolitical outlook ahead. Gold
for Feb rose $19 (1.1%) to settle at $1846 an
ounce. That was the highest finish for a most-active contract
since Jun 16.
Gold Futures Log Highest Settlement Since Mid-June
West Texas Intermediate (WTI) crude oil fell, as the new year opened with continuing concerns over demand from China amid surging Covid-19 cases & worries the global economy will slip into recession. WTI crude for Feb closed down $3.33 to settle at $76.93 per barrel. Mar Brent oil, the global benchmark, was last seen down $3.99 to $81.92, while Western Canada Select was down $1.93 to $50.71 per barrel. The drop comes as new Covid-19 cases surge in China, 3 years after the novel coronavirus was first detected in the city of Wuhan. The rise in new infections follows on the end of the country's zero-Covid policies, which imposed punishing quarantines on major centers & slowed the economy of the world's #1 oil importer. Weaker growth in OECD economies as central banks continue to fight inflation with higher interest rates, raising the risk of recessions that will cut into demand for oil.
WTI Oil Begins the New Year With a Loss on Concerns over China Demand and Recession Worries
The stock market extended its selling mood. Investors are very nervous with all the problems out there. Dysfunction in the House is historic & a huge problem for investors to understand. So investors bought safe haven gold & Treasuries. Not a good sign for the stock market as bets are on a recession..Dow Jones Industrials
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