Dow finished up 75 but off early highs), decliners over advancers better than 2-1 & NAZ rose 117. The MLP index fell 2+ to 211 & the REIT index was even in the 347s. Junk bond funds drifted lower & Treasuries saw very heavy buying, sharply reducing yields. Oil was off 1+ to the 69s & gold surged 52 to 2002 (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)
For the first time in a long time, it's cheaper to buy a house right now than at the same time last year. Buyers are taking advantage, as home sales increased across the country last month. Brittany Baughman sells houses around Seattle with "Four Elements Realty and Co." She says her sales have been going up. "When I’m working with buyers, I have been competing against other offers again," Baughman said. "And offers are getting aggressive again." A big reason why is lower prices. According to the "National Association of Realtors" & "Freddie Mac," the average home price fell to $363K in Feb & mortgage rates are under 7%. "In the past few weeks, interest rates have dipped back down into that 6% range," Home sales rose across the country from Jan to Feb said Jessica Lautz with the National Association of Realtors. "And that’s been encouraging for buyers to come back in." The most significant jump is in the west, with a 19.4% increase. But according to Baughman, buyers need to be aware sellers might not keep prices low for long. "You’ve got to look at it as a long-term game," Baughman said. "And get in as soon as you can to still get a piece of these lower prices." Data from the National Association of Realtors shows the jump in nationwide home sales from Jan to Feb was the biggest month-to-month increase since Jul 2020.
US homebuyers taking advantage of rare dip in housing costs
The recent failures in the banking sector have rattled not just investors, but American adults in general. Only 10% of US adults say they have high confidence in the nation's banks & other financial institutions, according to a new poll. That's down from the 22% in 2020. The
poll from The Associated Press-NORC Center for Public Affairs Research
also finds that a majority say the gov is not doing enough to
regulate the industry. This comes following a major shakeup in the financial system
involving the collapse of 2 banks & liquidity problems at 2
others. These shocks brought back memories of the 2008-2009 financial crisis. The crisis began when Silicon Valley Bank, the nation's 17th largest, was shut down by the FDIC as regulators moved to protect customers as it faced a liquidity crunch following a $2B loss. It became the largest bank failure since the financial crisis. Federal regulators also shut down New York-based Signature Bank to protect consumers & the financial system following the collapse of SVB. Signature's deposits were bought by Flagstar Bank, a subsidiary of New York Community Bank. Big US banks voluntarily deposited $30B to stabilize First Republic Bank. In Europe, UBS took over Credit Suisse. In the US, the tumult has raised questions among policymakers about legislation that rolled back strict regulations put in place after the financial crisis. The poll suggests the US public shares that concern. 56% say the gov isn't doing enough to regulate banks & other financial institutions. 27% say it’s doing the right amount & 15% say it's regulating too much. The worry about under-regulation is bipartisan: 63% of Dems say
current bank regulation is insufficient, as do 51% of Reps. The
poll finds that in addition to the 10% of Americans saying that they
have high confidence in the nation/s banking institutions, 57% do have
some confidence; 31% have hardly any.
New poll reveals how much Americans' faith in banks has dropped after major failures
Ford (F) said its electric vehicle business lost $2.1B last
year on an operating basis, a loss that was more than offset by $10B in operating profit between its internal combustion & fleet
businesses. The automaker expects 2023 to unfold along
similar lines, forecasting an adjusted loss of $3B for its EV
unit, adjusted earnings of about $7B for its internal combustion
unit & adjusted earnings of roughly $6B for its fleet
business. The financials are the first detailed look at unit profitability as Ford unveils a new financial reporting
structure that aims to give investors a better understanding of how
its electric vehicle business is evolving — & how profits from its
internal combustion businesses are funding its electric transformation. The reformatted reports follow a sweeping reorganization,
announced in Mar 2022, that divided Ford's global business into 5
business units: “Ford Blue,” its traditional internal combustion engine
business; a new “Ford Model e” electric vehicle unit; “Ford Pro,”
containing its commercial ^ gov fleet business; “Ford Next,”
which includes nonautomotive mobility solutions & other future tech; & its existing Ford Credit financial services subsidiary. “We’ve
essentially ‘refounded’ Ford, with business segments that provide new
degrees of strategic clarity, insight and accountability to the Ford+
plan for growth and value,” CFO John Lawler said in a news release. Lawler said the new reporting structure is a reflection of how he, CEO
Jim Farley, & other senior Ford execs are now thinking about &
operating Ford's businesses. Ford reiterated that it expects to be building EVs at a rate
of 2M per year by the end of 2026. It hopes to achieve a 10%
profit margin on an EBIT basis by that time, with an 8% adjusted EBIT
margin for Ford Model e. Before the restructuring was announced,
some analysts had urged Ford to spin off its EV business. But Farley & other execs argued that keeping the EV unit in house
allows it to draw on the existing manufacturing expertise & other
strengths now housed in Ford Blue & Ford Pro. This gives it a
significant advantage over so-called “pure play” EV startup companies
that have had to create manufacturing bases from scratch, they said. The
company hopes that the new financial reporting structure will help
analysts & investors understand how profitable its core internal
combustion businesses are, while making it easier to track the progress
of Ford's overhaul over time. The stock fell 6¢.
If you would like to learn more about Ford, click on this link:
club.ino.com/trend/analysis/stock/F_aid=CD3289&a_bid=6ae5b6f7
Ford’s EV business lost $2 billion in 2022, offset by big profits in fleet and legacy units
Gold futures climbed to their highest settlement in over a year after the Federal Reserve announced a qtr-point interest-rate hike a day earlier & signaled one more rate increase this year. While Fed Chair Jerome Powell pushed back on market expectations of a rate cut this year, the market focused on the Fed's less hawkish adjustment to the statement: the removal of ongoing increases from the text of the statement. That suggested the central bank is nearing the end of the hiking cycle. Gold for Apr delivery rose $46 (2.4%) to settle at $1995 an ounce. That was the highest most-active contract finish since Mar 10, 2022.
Gold Futures Mark Highest Settlement in more than a Year
Oil prices settled lower, with US benchmark prices falling back below $70 a barrel just a day after topping that level for the first time in a week. The banks are the main driver of oil & all risk assets today, as fading confidence in the financial system is reigniting fears that another crisis may be looming after investors saw some of the biggest bank failures since 2008 in early Mar. May West Texas Intermediate crude fell 94¢ (1.3%) to settle at $69.96 a barrel.
Oil Futures Settle Lower, with U.S. Prices Back Below $70 a Barrel
Early today, risk assets (i.e. stocks) & gold were not rising sharply at the same time. That relationship does not make sense. In the PM, sellers sold stocks while gold remained in demand. They realized that stocks are risky & if the Fed slows or ends rate hikes, the economy is not doing great. The Fed's forecast for GDP growth this year & next are only slightly above zero. And these are only projections!
Dow Jones Industrials
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