Dow dropped 306, decliners over advancers 5-2 & NAZ went down 83. The MLP index was off 2+ to the 226s & the REIT index fell 4+ to the 369s. Junk bond funds were mixed & Treasuries saw buying which reduced yields (more below). Oil retreated 2 to the 64s & gold sank 26 to 1944.
AMJ (Alerian MLP Index tracking fund)
Builder confidence is up for the first time in 11 months, according to data compiled by the National Association of Home Builders (NAHB). The Wells Fargo housing market index reading went up 5 points in May, rising to 55 from 50, while notching the 6th consecutive month that sentiment improved & the first time it surpassed the midpoint of 50 since Jul last year. "Builders are feeling cautiously optimistic about market conditions given low levels of existing home inventory and ongoing gradual improvements for supply chains" said NAHB Chair Alicia Huey. "However, access for builder and developer loans has become more difficult to obtain over the last year, which will ultimately result in lower lot supplies as the industry tries to expand off cycle lows," she added. According to the NAHB, the uptick in home builder sentiment reflects growing foot traffic from homebuyers, light competition from resale & a better supply chain. Meanwhile, project financing remains an industry issue in 2023. In Jun, 25% of builders reduced home prices to bolster sales, after a 27% builder reduction in May & a 30% reduction in Apr. Home sales have declined steadily since peaking at 36% in Nov 2022, with the average price reduction being 7% in Jun, below the 8% rate in Dec 2022. Also in Jun, 56% of builders offered incentives to buyers, slightly more than the 54% in May, but fewer than the 62% in Dec 2022. NAHB chief economist Robert Dietz said Jun "marks the first time in a year that both the current and future sales components of the HMI have exceeded 60, as some buyers adjust to a new normal in terms of interest rates."
Homebuilder sentiment upbeat for first time in almost a year
Treasury yields were mostly lower as investors looked to remarks from Federal Reserve officials for hints about upcoming monetary policy moves. The 10-year Treasury yield was last trading 6 basis points lower at 3.709% & the 2-year Treasury yield was last down 5 basis points at 4.672%. Yield & prices have an inverted relationship & one basis point equals 0.01%. Markets were closed yesterday for the Juneteenth holiday. May US housing starts beat expectations, with 1.63M starts last month, according to the Census Bureau. That was higher than the 1.39M housing starts expected. The US also saw 1.49M new building permits in May, higher than the forecast for 1.42M. Meanwhile, investors awaited a slew of Fed speaker comments slated for this week which could provide fresh details about the outlook for interest rates.
10-year Treasury yield is little changed as investors await Fed speaker comments
Intel's (INTC), a Dow stock, spree of chip plant building has spread to Germany. The chipmaker & the German gov signed a deal that will see the US
company spend more than €30B ($32.8B) to build a chip
manufacturing site in the eastern city of Magdeburg. Germany is helping the effort, pledging to cover a 3rd of the investment. INTC acquired the land for 2 semiconductor facilities in Magdeburg in Nov, although production is not expected to start for another 4 or 6 years. "The
investment in Germany means a significant expansion of Intel's
production capacity in Europe and is the biggest investment ever made by
a foreign company in Germany," Economy Minister Robert Habeck, who is
also the country's vice chancellor, said. The German gov confirmed that it will provide €9.9B toward the total. The plan still needs the approval of the EU's exec branch before it is finalized. INTC also plans to construct a new factory in Israel, Prime Minister Benjamin Netanyahu said. The company will spend $25B on the facility. The stock fell 1.31.
If you would like to learn more about INTC, click on this link:
club.ino.com/trend/analysis/stock/INTC_aid=CD3289&a_bid=6aeoso5b6f7
Intel reveals plan to build new $33B chip plant in Germany with government help
After the recent stock market rally, it's time for profit taking. There may be more serious trading tomorrow when more traders return.Dow Jones Industrials
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