Dow went up 42, advancers over decliners about 3-2 & NAZ gained 135. The MLP index added 1+ to the 224s & the REIT index wavered in the 361s. Junk bond funds inched higher & Treasuries were sold, raising yields. Oil slid lower in the 72s & gold dropped 27 to 1957.
AMJ (Alerian MLP Index tracking fund)
House Speaker Kevin McCarthy said that he is optimistic that congressional negotiators could reach a deal to raise or suspend the debt ceiling in time to hold a House vote on it next week. “I see the path that we can come to an agreement,” McCarthy told reporters in the Capitol. “And I think we have a structure now and everybody’s working hard, and I mean, we’re working two or three times a day, then going back getting more numbers.” McCarthy spoke as a small group of White House negotiators met on Capitol Hill with McCarthy's team to hammer out a deal that's able to pass the Rep majority House & the Dem controlled Senate ahead of a potential Jun 1 deadline, the soonest date the Treasury could run out of cash to pay debts already incurred. “I just believe where we were a week ago and where we are today is a much better place, because we’ve got the right people in the room discussing it in a very professional manner, with all the knowledge, all the background from all the different leaders,” McCarthy added. This week, the White House dispatched 2 new negotiators to take the lead in the delicate talks, presidential counselor Steve Ricchetti & Office of Management & Budget director Shalanda Young.
McCarthy says House could vote on debt ceiling deal as soon as next week
The number of Americans filing for unemployment benefitslast week fell by the most since 2021 after fraudulent claims in Massachusetts boosted the data in previous weeks. Data from the Labor Dept show initial claims decreased last week by 22K to 242K, well above the 2019 pre-pandemic average of 218K claims. Continuing claims, filed by Americans who are consecutively receiving unemployment benefits, dropped to 17.9M, a decrease of 6K from the previous week. Some economists have warned that it's difficult to get a clear picture of what's happening in the labor market after Massachusetts state officials acknowledged they are "experiencing an increase in fraudulent claim activities" involving unemployment benefits. For months, the labor market remained a strong point in the slowing economy, despite an aggressive interest-rate hike campaign by the Federal Reserve. But there are signs it is beginning to cool, even when excluding the noise from the fraudulent Massachusetts data. Layoffs are on the rise & job openings are declining. Although hiring rose faster than expected in Apr, jobless claims are also steadily ticking higher. Economists widely expect unemployment to climb higher as a result of steeper interest rates, which could force consumers & businesses to pull back on spending. The most recent projections from the Fed show that officials expect unemployment to rise to 4.6% by the end of next year, up from the current rate of 3.5%. That could mean more than 1M Americans lose their jobs between now & the end of the year.
Jobless claims tumble after blue state fraud clouds data
Sales of previously owned homes fell 3.4% in Apr from Mar to a seasonally adjusted, annualized pace of 4.28M units, according to the National Association of Realtors. Sales were 23.2% lower than Apr of 2022. There is still strong demand, but several factors are weighing on potential homebuyers. That is leading to different local & regional dynamics. “Home sales are bouncing back and forth but remain above recent cyclical lows,” said Lawrence Yun, NAR's chief economist. “The combination of job gains, limited inventory and fluctuating mortgage rates over the last several months have created an environment of push-pull housing demand.” There were 1.04M homes for sale at the end of Apr, an increase of 1% compared with Apr of last year. At the current sales pace, that represents a 2.9-month supply. A 6-month supply is considered a balanced market between buyer & seller. The median price of an existing home sold in Apr was $388K, down 1.7% from the previous Apr. That, however, is a median & is likely reflecting that there is more sales activity on the lower, more affordable end of the market. “Roughly half of the country is experiencing price gains,” Yun noted. “Even in markets with lower prices, primarily the expensive West region, multiple-offer situations have returned in the spring buying season following the calmer winter market. Distressed and forced property sales are virtually nonexistent.” While sales were lower at all price points compared with Apr 2022, they were down most sharply for homes priced above $500K. That is likely due more to affordability than supply, as there are more homes available for sale on the higher end of the market.
Home sales fell in April as buyers contended with high prices, fluctuating mortgage rates
Traders are still keeping their fingers crossed while they wait for a debt ceiling deal.Dow Jones Industrials
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