Dow rose 88, advancers modestly ahead of decliners & NAZ fell 22. The MLP index inched up to the 234s & the REIT index was little changed in the 364s. Junk bond funds slid lower & Treasuries had limited buying,which lowered yields. Oil slid slightly below 81 & gold was steady at 1935.
AMJ (Alerian MLP Index tracking fund)
New US home construction ticked higher in Jun after declining the previous month, even as the housing market continues to confront headwinds like higher mortgage rates. Housing starts rose 3.9% last month to an annual rate of 1.45M units, according to new Commerce Dept data. It was slightly above forecast for a pace of 1.44M units. Applications to build, which measures future construction, also inched higher, climbing 0.1% over the course of the month to an annualized rate of 1.44M units. Compared with the same time last year, building permits are down about 13%. The data comes one day after the National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, unexpectedly plunged 6 points to 50, a 3-month low. Any reading below 50 is negative. Prior to this month, sentiment among builders had been steadily rising as a worsening inventory shortage, driven by sellers reluctant to give up their low mortgage rates locked in before the pandemic, pushed would-be buyers to seek out new construction instead. However, the latest data suggests a recent spike in mortgage rates is weighing on that demand. "Rising mortgage rates and high construction costs stemming from a dearth of construction workers, a lack of buildable lots and ongoing shortages of distribution transformers put a chill on builder sentiment in August," said Alicia Huey, NAHB chair & a custom home builder & developer.
Housing starts rise more than expected in July despite high mortgage rates
Mortgage rates rose for the 3rd straight week last week, matching a 22-year high. As a result, mortgage demand dropped as well. Total mortgage application volume was 29% lower than the same week one year ago, according to the Mortgage Banker's Association's (MBA) seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726K or less) increased to 7.16% from 7.09%, with points decreasing to 0.68 from 0.70 (including the origination fee) for loans with a 20% down payment. That was the 3rd straight weekly increase & the highest level since Oct 2022, which also matches a high level seen in 2001. “Treasury rates were elevated again last week following mixed data on inflation and more indication of resiliency in the economy, which may pose a challenge to the Federal Reserve’s efforts to lower inflation,” said Joel Kan, an MBA economist. As a result, mortgage demand from homebuyers was essentially flat week to week & 26% lower than the same week one year ago. The adjustable-rate share of these applications did rise slightly, as ARM loans offer slightly lower rates & buyers are looking for a break where they can find it. Applications to refinance a home loan fell 2% for the week & were 35% lower than the same week one year ago. Last year the 30-year fixed was 5.45%, but the year before it was in the 3% range, so there are very few borrowers who can now benefit from a refinance. While overall mortgage demand is dropping, applications for a mortgage to purchase a newly built home are rising, up 35.5% in Jul year over year, according to a separate MBA report. The Federal Housing Administration share of those applications hit the highest level since May 2020 & has increased in 4 of the last 5 months. FHA loans offer low down payment options & are thus popular with first-time homebuyers.
Weekly mortgage demand drops again, as interest rates match a 22-year high
Target (TGT), a Dividend Aristocrat, missed quarterly sales expectations & slashed its full-year
forecast, as it again had trouble convincing shoppers to buy more than
necessities. The big-box retailer cut both its full-year sales &
profit expectations. TGT offered a gloomier outlook even as some top
economists have scrapped calls for a recession & gov data shows signs inflation is cooling. The
company said it expects comparable sales to decline by about mid
single digits for the full fiscal year & EPS of $7-8. It previously anticipated comparable sales would range
from a low single-digit decline to a low single-digit increase, & EPS would come in at $7.75-8.75. CEO Brian Cornell said sales & store traffic improved in
Jul. Yet he said the company is wary about trends in H2 including rising interest rates, the return of student loan
payments this fall & still elevated prices of everyday items. “As
we look at the consumer landscape today, we recognize the consumer is
still challenged by the levels of inflation that they’re seeing in food
and beverage and household essentials,” he said. “So that’s absorbing a much bigger portion of their budget.” EPS was $1.80 vs. $1.39 expected & revenue was $24.8B vs $25.2B expected. The stock rose 4.50.
If you would like to learn more about HD, click on this link:
club.ino.com/trend/analysis/stock/HD_aid=CD3289&a_bid=6aeoso5b6f7
Target slashes full-year forecast as it struggles to win thrifty shoppers
Not a lot of excitement in the stock market. Later today minutes from the last Fed meeting will be released & that will drive trading.
Dow Jones Industrials
No comments:
Post a Comment