Dow rose 38, advancers over decliners 4-3 & NAZ gained 110. The MLP index was little changed, near 233 & the REIT index added 1+ to the 402s. Junk bond funds edged lower & Treasuries continued to be sold, raising yields. Oil slid back fractionally to the 78s & gold retreated 19 to 1864 (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)
Higher mortgage rates & inflation fears have put a damper on the housing market. The release of the latest retail inflation numbers sent the 10-year Treasury to the 2nd-highest level of the year at 3.76%. That could put additional pressure on the mortgage market. The rate on a 30-year fixed mortgage had decreased for 5 weeks, but jumped by 21 basis points in the past week to 6.39%. Overall demand for mortgage applications fell 7.7% from the prior week, according to the Mortgage Bankers Association weekly survey. "Mortgage rates increased across the board last week, pushed higher by market expectations that inflation will persist, thus requiring the Federal Reserve to keep monetary policy restrictive for a longer time," said Joel Kan, MBA's VP & deputy chief economist. "Mortgage applications decreased for the second time in three weeks because of these higher rates. Refinance borrowers, both rate/term and cash-out, remain on the sidelines as current rates provide little financial incentive to act." The Refinance Index decreased 13% from the previous week & was 76% lower than the same week one year ago. The Purchase Index decreased 6% from one week earlier. "Purchase applications dropped to their lowest level since the beginning of this year and were more than 40% lower than a year ago', added Kan. "Potential buyers remain quite sensitive to the current level of mortgage rates, which are more than two percentage points above last year’s levels and have significantly reduced buyers’ purchasing power."
Mortgage applications dip as inflation dents demand
The US Treasury will exhaust its emergency measures to prevent a debt default sometime between Jul & Sep unless Congress raises the $31.4T debt limit, the Congressional Budget Office projected. The latest projection notes that the final date will be determined by tax revenues the IRS receives in Apr. Should those revenues decline significantly from CBO's estimates, “the extraordinary measures could be exhausted sooner, and Treasury could run out of funds before July,” CBO director Phillip Swagel said. The US reached the current debt limit in Jan of this year, at which point Treasury Secretary Janet Yellen initiated a series of established steps, known as the “extraordinary measures,” that allowed the gov to continue borrowing money to meet its obligations. Should those measures be exhausted before Pres Biden can sign off on a new debt limit passed by Congress, “the government would have to delay making payments for some activities, default on its debt obligations, or both,” said Swagel. Top Reps & Dems on Capitol Hill have repeatedly assured the public that the US will not default on its debt. An agreement will be reached & a bill passed in time to avert a crisis.
U.S. will default between July and September if Congress doesn’t raise debt limit, CBO says
Boeing's (BA), a Dow stock,
aircraft orders & deliveries slipped in Jan from a month earlier. BA
delivered 38 jetliners last month, 35 of them its bestselling 737 Max
planes, down from a total of 69 planes in Dec. The delivery count
was still was higher than the 32 planes that were handed over to customers
in Jan 2022. The figures don’t include a massive order
from Air India for nearly 500 new planes from the manufacturer & its
chief rival, Airbus, which was formalized earlier. Air
India ordered at least 220 BA planes & 250 Airbus planes, making
the combined sale the biggest aircraft order ever as airlines prepare
for a further recovery in air travel as Covid pandemic travel concerns wane. Last month, BA said it planned to ramp up output of its 737 Max to 50 planes a month in 2025 or 2026, though it's been cautious about increases beyond the
current pace of 31 per month because of instability in the supply chain. The company logged 55 gross orders in Jan, netting orders for 16 new planes after 39 cancellations. The stock fell 1.05.
If you would like to learn more about BA, click on this link:
club.ino.com/trend/analysis/stock/BA_aid=CD3289&a_bid=6ae5b6f7
Boeing orders, deliveries slip in January, before massive Air India sale
Gold futures settled at their lowest in more than 5 weeks. A firmer $ pressured prices for the precious metal. The sharp rebound in US Jan retail sales of 3% also helped to keep the pressure on the downside. Gold for Apr dropped $20 (1.1%) to settle at $1845 an ounce, the lowest most-active contract finish since Jan 5.
Gold Futures Mark Lowest Settlement in more than 5 Weeks
Oil futures declined after US data revealed a more than 16M-barrel weekly climb in crude inventories. The Intl Energy Agency, meanwhile, raised its forecast for oil demand in 2023 to a record, while boosting its supply forecast. West Texas Intermediate crude for Mar fell $1.58 (2%) to $77.48 a barrel with prices eying their lowest finish since Feb 7. Apr Brent crude, the global benchmark, dropped $1.38 (1.6%) to $84.20 a barrel. Crude oil showed one of the biggest increases in inventories in quite some time. The Energy Information Administration reported that US commercial crude inventories rose by 16.3M barrels last week. That marked an 8th consecutive week of supply gains reported by the EIA. The forecast was for a climb of 600K barrels in US crude inventories. The American Petroleum Institute reported a 10.5M barrel rise. The EIA data includes an upward “adjustment” to crude stocks of 1.967M barrels per day last week, which added roughly 14M barrels of supply for the week.
Oil futures settle lower as U.S. crude supplies post a weekly climb of more than 16 million barrels
Stronger than expected retail sales made traders nervous. They worry that strength means Fed officials will delay any pause in hiking interest rates. But buying into today's close indicates they turned optimistic, although cautious.Dow Jones Industrials
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