Dow went up 116, advancers over decliners 2-1 & NAZ gained 108. The MLP index was up 2+ to the 238s & the REIT index rose 2+ to the 338s. Junk bond funds found buyers today & Treasuries had limited buying which lowered yields. Oil dropped almost 2 to the high 91s on profit taking after its recent run & gold was off another 8 to 1882.
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
Pending home sales plunged in the US last month as high mortgage rates deterred more would-be buyers & sellers from making deals. The National Association of Realtors' Pending Home Sales Index (NAR) tumbled 7.1% to 71.8 in Aug, a much greater decline than the 0.8% drop analysts expected. Year over year, pending transactions are down 18.7%, the NAR's data shows. "Mortgage rates have been rising above 7% since Aug, which has diminished the pool of home buyers," said Lawrence Yun, NAR's chief economist. "Some would-be home buyers are taking a pause and readjusting their expectations about the location and type of home to better fit their budgets." Meanwhile, would-be sellers locked in with much lower rates are staying put, contributing further to the ongoing inventory shortage that has been driving up home prices ever since the pandemic began. The sale of new homes dropped unexpectedly in Aug, too, falling 8.7% to a seasonally adjusted annual rate of 675K units, according to the latest data from the Commerce Dept. The decline in sales indicates that a resurgence in mortgage rates is pushing many would-be buyers out of the market. That slowdown in demand contributed to a decline in new home prices last month. The median price for a new home fell to $430K from $437K the previous month. Still, that remains far higher than the typical pre-pandemic level. The number of available homes on the market at the end of Jul was down by more than 9% from the same time last year & down 46% from the typical amount before the COVID-19 pandemic began in early 2020, according to a recent report from Realtor.com. Redfin reported earlier this month that the median monthly mortgage payment hitan all-time high of $2632 during the 4 weeks ending Sep 10. At the same time, the average interest rate for the benchmark 30-year fixed-rate mortgage has remained above 7%,& hit a 23-year high of 7.41% last week, according to the Mortgage Bankers Association. "It's clear that increased housing inventory and better interest rates are essential to revive the housing market," Yun added.
Americans filing for unemployment claims edged higher by 2K to 240K last week, well below markets expectations of 215K to remain close to the close to the over 7-month low in the earlier week. In the meantime, continuing claims rose by 12K to 1670K, under market expectations of 1675K & remaining close to the near 8-month-low recorded previously. The data added evidence that the labor market remains at historically tight levels, pointing to added resilience to the Federal Reserve's aggressive tightening cycle & adding leeway for a potential hike in Nov. In the meantime, the 4-week moving average fell by 6K to 611K.
United States Initial Jobless Claims 2023 Data
As Congress scrambles to avoid a gov shutdown, a budget watchdog warns that the chances are not in their favor. "Experts see the chances having shot up to almost 90% at this point," Committee for a Responsible Federal Budget Pres Maya MacGuineas said. MacGuineas argued that Congress doesn't have enough time to "get done what they need unless every single thing falls into place." The gov is facing the threat of shutting down & causing federal workers to go without pay if Congress does not pass a funding bill by midnight. EST on Sep 30. "It’s so silly," MacGuineas said. "This is a deadline we’ve known about. It comes at the same time every single year," she stressed. Lawmakers in Congress are negotiating over a short-term continuing resolution (CR) that would extend funding on a short-term basis to allow negotiations over spending levels for the rest of fiscal year 2024 to play out & legislation to be passed. MacGuineas said that she's "optimistic" about a deal, suggesting that members of Congress could agree to a "very short-term" continuing resolution to "give themselves a little breathing room." House Reps are divided over the duration of a CR & whether other provisions like border security measures, Ukraine funding & disaster relief should be attached. She believes the "best approach" to quell some of the House Reps lengthy demands would be to have a "clean" CR & then "address" other issues these issues separately." "If you get into the habit where you can throw everything and the kitchen sink into any of this must-pass legislation, it complicates it," she explained.
Government shutdown chances just hit 90%, budget watchdog warns
Gold closed at a fresh since month low even as the $ dropped off a 13-month high. Gold for Dec closed down $12 to settle at $1878 per ounce. the lowest since Mar 10. The price of the precious metal has suffered due to a strong $ & treasury yields that have climbed following the Federal Reserve's hawkish outlook last week that suggested another hike to interest rates before year end. High bond yields & a strong greenback are exerting downward pressure on gold prices. But uncertainty is almost entirely negating their impact as investors seek out safe havens like gold. Expect the price of gold to slip slightly over the coming months to end the year. The $ moved lower early today, making gold more affordable for intl buyers. The ICE dollar index was last seen down 0.4 points to 106.26. Treasury yields were mixed. The yield on the 2-year note was last seen down 5.0 basis points to 5.092%, while the 10-year note was last seen paying 4.624%, up 0.8 basis points, after earlier touching 4.684%, the highest since 2007.
Gold Closes at a Six-Month Low amid a Lower Dollar and Mixed Treasury Yields
Oil futures ended sharply lower, giving up gains that had seen the US benchmark trade above the $95-a-barrel threshold for the first time in a year as investors weighed tightening US crude inventories. West Texas Intermediate crude for Nov fell $1.97 (2.1%) to end at $91.71 a barrel, after trading as high as $95.03. Nov Bre, the global benchmark, settled at $95.38 a barrel, down $1.17 (1.2%) after hitting a session high of $97.69. Oil was ripe for a pullback. After coming just short of the $100 level, energy traders are quickly locking in profits given the turbulence happening in the bond market. The yield on the 10-year Treasury note traded near 3.70% in earlier activity before pulling back. A sharp rise in yields to 16-year highs is stirring fears over the economic outlook & sparking volatility across financial markets. The Energy Information Administration yesterday reported that crude stocks at the Cushing, Okla, delivery hub fell to under 22M barrels. That is close to operational minimums & lowest since the seasonal lows of 2014. The inventories data energized a yesterday rally that saw the US benchmark log its highest close in nearly 13 months.
Oil ends lower after U.S. benchmark briefly climbs above $95 a barrel
Mortgage rates hits a 23-year high & the 10-year Treasury yield spiked to its highest point since 2007. But that did not keep stock buyers away. However as long as yields are elevated, this enthusiasm can not last very long.
Dow Jones Industrials
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