Dow went up 72 (near session lows & well off session highs), advancers over decliners 4-3 & NAZ added 72. The MLP index slid back to the 225s & the REIT index was little changed in the 382s. Junk bond funds were higher & Treasuries continued to see modest strength which reduced yields. Oil remained lower in the 75s & gold added 9 to 1826 (more below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Union Pacific Railroad (UNP) will find a new CEO this year after major
shareholders complained of poor safety & profit metrics this month. UNP is America's largest railroad operator, accounting for roughly
$120B in market capital. The company announced it will be
replacing current CEO Lance Fritz by the end of the year. The
announcement came just days after a leading shareholder urged the
company to make the move. UNP's board says it is currently gathering "highly-qualified candidates both within the industry and adjacent industries." UNP was dragged into recent turmoil over train derailments last week after one of its trains careened off the tracks in Nebraska. Images from the Nebraska derailment
showed roughly a dozen cars strewn across train tracks, but there were
no flames or smoke. UNP says the train was
transporting coal & there is no indication that the crash poses a
threat to locals. UNP said "No one was injured. The incident occurred
about three miles southeast of Gothenburg." Cleanup has begun, with heavy
equipment on site. "One of the three mainline tracks near the
derailment site reopened to train traffic at about 8 a.m. CST. The cause
of the incident is under investigation," the statement continued. The stock jumped 19.48 (10%) on news of a new leader.
If you would like to learn more about UNP, click on this link:
club.ino.com/trend/analysis/stock/UNP_aid=CD3289&a_bid=6ae5b6f7
Major freight company shaking up leadership after train derailment
A sharp drop in mortgage interest rates brought homebuyers out in force in Jan, but rates have bounced back higher again, so the gains may be short-lived. Signed contracts on existing homes jumped 8.1% last month compared with Dec, according to the National Association of Realtors (NAR). That's the 2nd straight month of gains. Sales, however, were still 24% lower compared with Jan 2022. The “pending sales” are the most current indicator of housing demand, as it can take up to 2 months to close on a signed sale. Closed sales in Jan were lower because they were based on contracts signed in Nov & Dec, when mortgage rates were higher. And Jan's jump is all about mortgage rates. After hitting a high of just over 7.3% in Oct, which caused sales to plummet, the average rate on the popular 30-year fixed mortgage dropped back close to 6% in Jan, according to Mortgage News Daily. “Buyers responded to better affordability from falling mortgage rates in December and January,” said NAR chief economist Lawrence Yun. But mortgage rates moved higher again in Feb & the average rate stood at 6.88% as of Fri. Sales activity is likely already slowing. Mortgage applications to buy a home, which are a weekly indicator of buyer demand, have been falling for much of Feb. The mortgage rate effect was also seen in sales of newly built homes in Jan, as those numbers from the Census Bureau are based on signed contracts as well, not closings. Builder sales jumped just over 7% compared with Jan. Some of that was due to incentives offered by big builders, but lower rates improved affordability, especially for buyers of entry-level homes. Going forward, with rates higher & the supply of homes for sale still historically low, sales may not be able to continue this type of growth. “Home sales activity looks to be bottoming out in the first quarter of this year, before incremental improvements will occur,” Yun said. “But an annual gain in home sales will not occur until 2024. Meanwhile, home prices will be steady in most parts of the country with a minor change in the national median home price.”
A rush of homes go under contract in January, but it’s unlikely to last
British Prime Minister Rishi Sunak signed a new trade deal with the EU designed to remedy problems caused by the Northern Ireland Protocol. Speaking shortly after the announcement, Sunak described the new agreement, known as the Windsor Framework, as “the beginning of a new chapter” for the relationship between the UK & the EU. “I’m pleased to report that we have now made a decisive breakthrough,” Sunak said. “These negotiations have not always been easy,” he continued. “The U.K. and the EU may have had our differences in the past, but we are allies, trading partners and friends. This is the beginning of a new chapter in our relationship.” European Commission President Ursula von der Leyen added that the framework “respects and protects our respective markets and our respective legitimate interests. And, most importantly, it protects the very hard-earned peace gains of the Belfast Good Friday Agreement.” Exact details of the new arrangement were not immediately available, but the 2 leaders said the deal had three main components. Those include safeguarding trade flows within the UK, protecting Northern Ireland's place within the UK & giving the region's assembly in Stormont say over new EU rules with the introduction of a “Stormont brake.” Sterling hit a session high of $1.2051, up 0.9%, shortly after the announcement. The € also rose 0.7% hit a session high of $1.0613. The FTSE 100 stock market index was up 60 points (0.7%) at 7934. The UK may have left the EU on Jan 31, 2020, but the Northern Ireland Protocol has sparked persistent disagreement ever since. This part of the Brexit deal mandates checks on some goods that travel to Northern Ireland from the rest of the UK — with the new negotiations aimed at easing these rules.
UK and EU agree to crucial Northern Ireland trade deal in Brexit breakthrough
Gold futures finished higher, with prices bouncing back after posting declines for 5 consecutive sessions. There has been quite a shift in market direction in favor of the $ & yields, with most foreign currencies, gold & US equities, falling out of favor. Those moves were as a result of the market changing its expectations for interest rates outlook swiftly higher. Gold for Apr rose $7 to settle at $1824 an ounce.
Gold Futures Mark First Gain in 6 Sessions
Oil prices declined after posting back-to-back session gains. Stubborn inflation data has returned the fears of a hawkish Federal Reserve, further complicating oil trade which is already under pressure from excess inventory. US benchmark West Texas Intermediate crude for Apr fell 64¢ (0.8%) to settle at $75.68 a barrel.
Oil futures settle lower after back-to-back session gains
Markets struggled but could not pull off a relief rally. The yield on the Treasury 10 year note is not far from its highs during the last 20+ years. Investors are worried about what harm these rates will do to the economy. For 4 months, Dow has been going sideways & is back to the low end of that trading range.Dow Jones Industrials
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