Dow dropped 336 near session lows, decliners over advancers 3-1 & NAZ finished down 16. The MLP index was off 2+ to the 221s & the REIT index tumbled 9 to the 357s. Junk bond funds drifted lower & Treasuries continued weak, bringing higher yields. Oil slid below 71 & gold sank 28 to 1993 (more on booth below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Confidence among builders in the US housing market increased more than expected in May as declining mortgage rates & limited inventory helped drive demand higher for new homes. The National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, rose 5 points to 50, the highest reading since Jul. It marked the first time in nearly a year that the index pulled out of negative territory. Any reading above 50 is considered positive; prior to 2022, the gauge had not entered negative territory since 2012, excluding a brief, but steep, drop in May 2020. "New home construction is taking on an increased role in the marketplace because many homeowners with loans well below current mortgage rates are electing to stay put, and this is keeping the supply of existing homes at a very low level," said Alicia Huey, NAHB chair. Still, the gauge still indicates the housing market is in a slump. The index has fallen to ½ of what it was just one year ago, when it stood at 81, although it has increased from a low of 31. It peaked at a 35-year high of 90 in Nov 2020, buoyed by record-low interest rates at the same time that American homebuyers, flush with cash & eager for more space during the pandemic, started flocking to the suburbs. The interest rate-sensitive housing market has borne the brunt of the Federal Reserve's aggressive campaign to tighten policy & slow the economy. Policymakers already lifted the benchmark federal funds rate 10 straight times, well into restrictive territory, as they try to crush stubborn inflation that is still running about double the pre-pandemic average. Demand has shown early signs of returning as mortgage rates fall from a record high of 7.08% in Nov. The average rate for a 30-year fixed mortgage dropped to 6.35% last week, according to data from mortgage lender Freddie Mac. However, that remains significantly higher than just one year ago, when rates hovered around 5%. Limited inventory has also bolstered demand this month. A recent report from Realtor.com showed that the number of available homes on the market in Mar was down more than 50% from the typical amount before the pandemic began. "Lack of existing inventory continues to drive buyers to new construction," said Robert Dietz, NAHB chief economist. "In March, 33% of homes listed for sale were new homes in various stages of construction. That share from 2000-2019 was a 12.7% average. With limited available housing inventory, new construction will continue to be a significant part of prospective buyers’ search in the quarters ahead."
Homebuilder sentiment jumps to highest level since July
JPMorgan Chase (JPM), a Dow stock, CEO said that it's not likely his bank would acquire another struggling
lender after its gov-brokered acquisition of First Republic. “Unlikely,” was Dimon's curt response to a shareholder who asked about acquisitions during the bank's annual shareholder meeting. The turmoil in mid-sized banks sparked by the Silicon Valley Bank collapse in Mar shows that merely meeting regulatory requirements isn't enough, Dimon added. “Regarding
the current disruption in the US banking system, most of these risks
were hiding in plain sight,” Dimon said of the interest rate risks that
helped toppled SVB & First Republic. Investors of the biggest
US bank by assets peppered Dimon & his managers with questions about
the bank's strategy, positions on hot-button political issues & use
of AI tools including ChatGPT, among other topics. JPMorgan is
prepared for interest rates & inflation to remain higher for longer
potentially, the CEO said. But “large geopolitical events,” cyber
attacks & market turmoil are Dimon's larger concerns, he added. The stock fell 91¢.
If you would like to learn more about JPM, click on this link:
club.ino.com/trend/analysis/stock/JPM_aid=CD3289&a_bid=6aeoso5b6f7
Jamie Dimon says it’s ‘unlikely’ that JPMorgan Chase will acquire another struggling bank
US Food & Drug Administration staff said Pfizer's (PFE) vaccine that protects infants from respiratory syncytial virus has “generally favorable” safety data. The FDA staff made the conclusion in briefing documents ahead of a meeting on Thurs when a panel of external advisors to the agency will discuss whether to recommend full approval of the RSV shot. The advisors will vote
on whether PFE's late-stage clinical trial data on the vaccine
supports its safety & efficacy. The FDA typically follows the advice
of its advisory committees, but is not required to do so. The
agency is slated to make a decision on whether to clear the shot in
Aug before RSV season in the fall. If approved, PFE's jab would
become the world's first vaccine that protects infants against RSV. RSV
usually causes mild, cold-like symptoms. But infants & older adults
are particularly vulnerable to having more severe cases. Each year the virus kills 6-10K seniors & a few hundred children younger than 5, according to the Centers for Disease Control & Prevention. The stock fell 13¢.
If you would like to learn more about PFE, click on this link:
club.ino.com/trend/analysis/stock/PFE_aid=CD3289&a_bid=6aeoso5b6f7
FDA staff: Pfizer’s RSV shot for infants has ‘generally favorable’ safety data
Gold futures settled below $2000 an ounce for the first time since the start of the month. Prices for the yellow metal have pulled back after failing earlier this month to mark a fresh record high. Even so, US debt ceiling drama could be supporting gold & preventing a deeper correction. Gold for Jun settled at $1993 an ounce, down $29 (1.5%) for the session. That was the lowest most-active contract finish since May 1.
Gold futures settle below $2,000 an ounce
Oil futures settled lower, just a day snapping a 4-session losing streak. Yesterday's recovery has stalled, and oil prices have struggle to make headway. This is hardly surprising given the weakness in economic data from China & Eurozone, as well as the ongoing debt-ceiling saga in the US. Jun West Texas Intermediate crude fell 25¢ to settle at $70.86 a barrel.
U.S. oil futures hold above $70 a barrel
Another tough day for stocks as shown below. For over ½ a year Dow has stayed around the 33K trend line. There are plenty of problems for investors to digest with good news being in short supply.
Dow Jones Industrials
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