Markets waver chaos over the new Republican House majority

Dow fell 194, advancers over decliners 2-1 & NAZ was off 102.  The MLP index  slid 1+ to 216 & the REIT index spulled back 2 to 368s.  Junk bond funds were bid higher & Treasuries saw heavy buying, lowering yields.  Oil pulled back 1+ to the 78s & gold rose 12 to 1839 (6 month high).

AMJ (Alerian MLP index tracking fund)

 

 

 

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The US housing market is experiencing its 2nd-biggest home price correction of the post-World War II era.  Macro Trends Advisors founding partner Mitch Roschelle attributed the massive correction to Americans' uncertainty for the markets & their "uneasiness" regarding the economy.  He explained that the "shoe to drop" would be if the nation starts to see a rise in unemployment, which could cause a "leg down" in the housing market.  "A couple of things are going to cause it to turn in the opposite direction, meaning home prices are going up. One is certainty. And when you don't know if interest rates are going to go up or not. I think that is what is driving a lot of people away from buying because they just don't know if rates are going to be cheaper in two months, and they're just going to wait," Roschelle said.  "And the other thing is uneasiness regarding the economy. And I think the shoe to drop there would be if we start seeing layoffs, and we start seeing unemployment starting to rise, I think that could be something that causes a leg down in the housing market in a big way."  These comments come following the massive power shift happening in the real estate market.  Arguing that the power has "completely shift[ed]" away from the sellers, further "constraining" the nation's struggling housing supply.  "Right now, I would say it's a buyer's market. I think the power has completely shifted from seller to buyer. Doesn't mean you don't see some bidding wars because again, I think statistically across the country, we're at 3.3 months supply. So that's still relatively low," Roschelle added.  "So, if there's a house that hits the market that's perfect, and it ticks all the boxes for buyers and there are buyers out in the market, I think you could see sporadically bidding wars, but mostly, you know, it's one or two people chasing that house. And we're not seeing that. We're not."

US sees second biggest home price correction of the post-WWII era

Jan is typically an overlooked month for retailers.  Shoppers make returns & exchanges.  They come to stores with gift cards in hand.  And they may spring for workout clothes or other items to follow thru on New Year's resolutions.  But this year, Jan carries higher stakes.  The next few weeks, which close out many retailers’ fiscal year, could help determine whether the holiday qtr is a win or a bust.  It's an important time for helping stores clear out excess inventory, too.  Jan could also set the tone for 2023 — when some economists & retail industry watchers anticipate the US will tip into a recession.  So far, early holiday results have been better than some economists & retailers feared.  Sales from Nov 1 - Dec 24 rose 7.6%, according to data from MasterCard SpendingPulse, which measures in-store & online retail sales across all forms of payment.  The figure includes restaurants & is not adjusted for inflation, which rose 7.1% year over year in Nov.  There are signs that shoppers may be running out of gas.  Credit card balances have ticked up.  Personal saving rates have fallen.  And sales of big-ticket items like jewelry & electronics have weakened.  Plus, Americans' spending spree during the earlier years of the pandemic, fueled by stimulus money, boredom & socked-away savings, have made for tough comparisons. Retailers enter 2023 reckoning with the fact that store traffic already lagged during peak weeks of the holiday season.  Across big retailers, foot traffic dropped by an average of 3.22% year over year for the weeks from Black Friday thru the week of Christmas, according to data from Placer.ai, an analytics firm that uses anonymized data from mobile devices to estimate overall visits to locations.  It also declined by nearly 5% when compared to pre-pandemic patterns.  Now retailers are more on edge.  “It seems like a lot of the brands are anticipating a bigger thud in January,” said Stacey Widlitz, pres of SW Retail Advisors, a consulting firm.  She has noticed more retailers are dangling gift cards to drum up sales.

Retailers are bracing for tougher times and more frugal customers in 2023

As the House prepares to usher in the 118th Congress & new Rep majority, GOP Leader Kevin McCarthy is struggling to secure enough support for his bid to be House speaker to avoid a protracted & historic fight on the House floor.  The California congressman has lobbied his fellow Reps for months & made several concessions to a small but outspoken bloc of conservatives.  But the efforts have not yet produced the breakthrough McCarthy needs to be elected House speaker in the first round of voice voting, which is expected to take place shortly after noon ET.  In order to be elected speaker, McCarthy needs support from a majority of the members who vote today (218) of the 434 House members expected to vote.  But with only 222 Reps total & no Dems expected to vote for him, McCarthy can afford to lose only 4 members of his caucus.  Currently, 6 current Rep members & 3 members-elect, all conservatives, still publicly opposed McCarthy.  McCarthy also faced months of organized opposition from influential conservative outside groups, which have amplified his critics on social media.  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.

House GOP Leader Kevin McCarthy appears to lack support to

This is not the way begin a new year for the stock market.  Confusion over the new House of Representatives is another mess investors have to deal with.  Hope this get straightened out soon!!!

Dow Jones Industrials