Dow went up 183, advancers over decliners almost 3-2 & NAZ edged up 26. The MLP index gained 3+ to 241 & the REIT index was up 3 to 387. Junk bond funds hardly budged & Treasuries saw limited buying, bringing lower yields. Oil rose 1+ to about 79 (3 month high) & gold dropped 11 to 1955 on a stronger $ (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)
The US housing market faces a long recovery from the steep increase in mortgage rates over the past year, which brought an "abrupt end" to the real estate boom in the economy. That is according to a new forecast from Moody's Analytics, which projected that property values in the US face a 2.4% decline next year as mortgage rates continue to weigh on the real-estate market. "While maturing millennial households drive housing demand, the doubling of U.S. mortgage rates is causing notable retreats in certain markets, mainly in western states," the analysis said. Mortgage rates spiked over the past year as the Federal Reserve waged an aggressive campaign to crush high inflation, approving 10 rate hikes in the span of 15 months. While the federal funds rate is not what consumers pay directly in mortgage, it affects borrowing costs for home equity lines of credit, auto loans & credit cards. Even just a minor change in rates can affect how much would-be homebuyers pay each month. A recent study from LendingTree compared the average monthly payments on 30-year fixed-rate mortgages in Apr 2022, when the rate hovered around 3.79%, & one year later, when rates jumped to 5.25%. It found that higher rates cost borrowers hundreds more each month & potentially added as much as $75K over the lifetime of the 30-year loan. "Potential homebuyers and existing homeowners needing to refinance or with variable payments now face materially larger monthly loan costs, against much more modest changes in their incomes," the Moody's research said. Mortgage buyer Freddie Mac said Thurs that the average rate on the 30-year loan fell to 6.78% from 6.96% the previous week, the first decline since Jun & the biggest one-week drop since Mar. Still, the rate remains well above the 5.54% recorded just one year ago & the pre-pandemic average of 3.9%. And they are unlikely to return to that 3% level anytime soon. As long as monetary policy remains tight, mortgage rates are projected to stay higher than pre-pandemic levels.
New forecast offers grim prediction for the nation's housing market
Apple
(AAPL), a Dow & NAZ stock, is considering raising the price of its high-end iPhone Pros when new models come out this fall. AAPL
typically releases new iPhones in Sep. Since 2019, the company
has sold a high-end iPhone Pro that starts in the US at $999 & a Max
model with a bigger screen for at least $1099. Now, its newest high-end models could reportedly receive a price rise
that would boost the company's overall revenue by increasing the average
selling price of a new iPhone. The price increase could also help AAPL take advantage of recent trends
in the smartphone industry. Overall smartphone shipments are down &
have been for a year, but consumers still have an appetite for the best & most expensive devices. The stock rose 81¢.
If you would like to learn more about AAPL, click on this link:
club.ino.com/trend/analysis/stock/AAPL_aid=CD3289&a_bid=6aeoso5b6f7
Apple reportedly considers raising the price of its new iPhone Pros
UPS (UPS) & the Teamsters union are set to resume negotiations this week on a
new collective bargaining agreement before the end of the month when a
potential strike that could rattle the US economy looms. The current contract between UPS & Teamsters, which covers about
340K UPS workers, is set to expire on Jul 31. In mid-Jun, 97% of
UPS Teamsters in favor of authorizing a strike if negotiations fail to
yield a satisfactory agreement between the 2 sides. If negotiations
falter this week & a strike begins the following week, it would mark
the largest strike against a single employer in US history & would
be the first UPS Teamsters walkout since 1997. While a strike
would take a toll on the economy at large, due to delayed shipments &
deliveries for consumers & businesses alike across the country, making
a deal will impact UPS' finances. The company enjoyed a record profit
of $13.1B in 2022 but forecasted a slower 2023 & its Q1 profit was down over 21% in the first 3 months of this
year compared to the same period a year ago. A strike by the UPS Teamsters could be the most expensive strike in the US in at least a century,
according to the Anderson Economic Group, a Michigan-based think tank
that specializes in the impact of labor strikes. The group's analysis
puts the economic losses from a 10-day strike at more than $7B,
including at least $4B in UPS customer losses & lost wages of
more than $1B. In its most recent annual report, UPS said it delivered 6.2B
packages around the world in 2022. That amounts to an average of 24.3M deliveries daily, which the economy's logistics system would struggle to cope with in the event of a strike. Negotiations between the 2 sides have been touch-&-go, with
agreements being reached in a number of areas like heat safety. But
there was recently a 2-week pause in negotiations after the Teamsters
walked away, & unresolved issues like compensation for part-time
workers linger as the deadline looms. The stock added 1.04.
If you would like to learn more about UPS, click on this link:
club.ino.com/trend/analysis/stock/UPS_aid=CD3289&a_bid=6aeoso5b6f7
UPS contract talks with Teamsters union near deadline, deal could hike company's costs
Gold futures settled at their lowest in a week, pressured by strength in the $ ahead of the Federal Reserve's monetary policy decision due Wed. The US central bank is expected to raise borrowing costs by 25 basis points Wed but investors will also be looking out for clues that the move may be the last of the rate-hiking cycle. Gold for Aug fell $4 to settle at $1962 an ounce, the lowest most-active contract finish since Jul 17.
Gold settles at lowest price in a week ahead of this week’s Fed policy decision
US oil prices ended at their highest in 3 months, up more than 2%. The unquenched thirst for summer oil created a snowball effect that has led to a multi-week rally. Export cuts from Saudi Arabia & Russia has led to Asian buyers looking for US-sourced WTI. West Texas Intermediate (WTI) crude for Sep climbed $1.67 (2.2%) to settle at $78.74 a barrel. Prices based on the front-month contract finished at their highest since Apr 24.
U.S. oil futures settle at highest in 3 months
Dow rose in early trading & remained elevated for the rest of the session. But NAZ continued to lag while the advance/decline ratio is sluggish. The rally is very tired & needs time to rest.
Dow Jones Industrials
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