Dow dropped 104, advancers over decliners better than 3-2 & NAZ went up 30. The MLP index stayed in the 226s & the REIT index was up 3+ to the 386s. Junk bond funds were mixed & Treasuries had a little selling, raising yields slightly. Oil rose 1+ to the 77s & gold gained 8 to 1833.
AMJ (Alerian MLP Index tracking fund)
Higher mortgage rates weighed on home price gains at the end of 2022. While prices were still higher than they were a year earlier, the rate of increase slowed quickly. Home prices in Dec were 5.8% higher than the previous Dec, according to the S&P CoreLogic Case-Shiller US National Home Price NSA Index. That is down from a 7.6% annual gain in Nov. Prices are now 4.4% below their Jun peak. For all of 2022, the 5.8% price gain was the 15th best performance in the index’s 35-year history, but was well below 2021′s record-setting 18.9% gain. The annual increase for the 10-city composite, which includes the New York & Los Angeles metro areas, was 4.4% in Dec, down from 6.3% in the previous month. The 20-city composite, which includes the Seattle & Dallas areas, marked a 4.6% year-over-year gain, down from 6.8% in the previous month. “The prospect of stable, or higher, interest rates means that mortgage financing remains a headwind for home prices, while economic weakness, including the possibility of a recession, may also constrain potential buyers,” said Craig J Lazzara, managing director at S&P DJI. “Given these prospects for a challenging macroeconomic environment, home prices may well continue to weaken.” Mortgage rates began rising in the spring of last year, with the average rate on the 30-year fixed loan more than doubling to well over 7% by the end of Oct. Rates then pulled back slightly in Dec & Jan, but are now edging closer to 7% again. Home sales reacted in Jan, with a sharp jump in properties going under contract, but that is unlikely to have continued in Feb with rates higher again & still very little on the market for sale. Home price gains weakened sharply to end 2022, according to S&P Case-Shiller
Home price gains weakened sharply to end 2022, according to S&P Case-Shiller
Despite Target beating expectations
for Q4-2022 amid a rise in consumer foot traffic &
store visits CEO Brian Cornell delivered a cautious warning to
investors. "Looking
ahead, we're focused on executing our long-term strategy, including
continued differentiation through affordability, assortment, ease and
convenience. At the same time, we're planning our business cautiously in
the near term to ensure we remain agile and responsive to the current
operating environment," he said. For the qtr, the retail giant reported revenue of $31.40B
versus $30.46B expected, adjusted EPS was $1.89
versus $1.48 expected, & a brick & mortar same-store sales increase of 1.9% versus -2.80% expected. "We're pleased that we entered the year in a very healthy inventory
position, reflecting our conservative approach in discretionary
categories and our commitment to reliability in our frequency
businesses" Cornell added. "As we plan for the year ahead, we will
continue to make robust capital investments and pursue efficiency
opportunities in support of our long-term growth." Full-year
sales increased 2.8% to $107.6B from $104.6B last year,
reflecting a 2.2% increase in comparable sales combined with sales from
non-mature stores. Data shows foot traffic at TGT increased 4% from Jan 2022 to Jan
2023, leading to a 0.7% same-store sales increase over the qtr while
beating estimates of -1.74%. The stock rose 3.13.
If you would like to learn more about TGT, click on this link:
club.ino.com/trend/analysis/stock/TGT_aid=CD3289&a_bid=6ae5b6f7
Target CEO gives cautious outlook after sales, profits improve
The cost of servicing America's national debt is expected to soar over the next 10 years to unprecedented levels, as net interest expense on the debt will cost more than $1.4T annually in 2033 based on the latest projections from the Congressional Budget Office (CBO). The CBO’s recently released budget & economic outlook for the next 10 years projects that the cost of servicing the national debt will more than double in that timeframe & the gov will spend about $10.5T on interest expenses alone over the coming decade. Spending on interest as compared to the size of the US economy is also expected to rise from 2.4% of the GDP in fiscal year (FY) 2023 to 3.6% of GDP in FY2033. In FY2022, American taxpayers spent $475B in interest expenses on the national debt — a figure that is expected to rise to $640B in the current fiscal year, FY2023. As the federal gov continues to run budget deficits & the debt level rises in the coming years, the amount spent on interest is projected to exceed $1T for the first time in FY2029 & rise to $1.4T in FY2033. To help put the scale of that $1.4T in context, that's more than what the federal gov spent on discretionary appropriations, items like defense & non-defense domestic programs that Congress has to approve annually, in the last full fiscal year before the pandemic. In FY2019, the federal discretionary budget totaled $1.3T, which was more or less evenly divided between defense & non-defense programs. In the years since the pandemic began, discretionary spending has ballooned in part due to temporary relief measures enacted by Congress, but also because of annual spending on defense & non-defense programs rising. Discretionary spending totaled more than $1.6T in FY2022 & is expected to exceed $1.7T in FY2023, with about $800B for defense & $941B for non-defense appropriations. By FY2033, the CBO expects the US to spend over $2.3T on discretionary items, including $1.1T on defense & more than $1.2T on non-defense appropriations. If the CBO’s projections play out as expected, federal spending to cover the $1.4T in interest payments on the national debt will exceed discretionary spending on either defense or non-defense appropriations in FY2033.
Interest payments on the national debt to reach $1.4 trillion annually in 2033: CBO
This has been an ugly month for stocks with the Dow down a very big 1300. The CBO analysis above adds to a feeling of gloom by investors.
Dow Jones Industrials
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