Dow finished up 6 in choppy trading, decliners over decliners about 5-4 & NAZ inched up 1. The MLP index added 2+ to the 243s & the REIT index was off 3+ to 361. Junk bond funds edged higher & Treasuries were slightly lower keeping yields about even. Oil remained higher in the 91s to s fresh yearly high & gold rose 7 to 1953 (more on both 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 auto workers' strike is the latest in a series of labor-management conflicts that economists say could start having significant growth impacts if they persist. So far, the United Auto Workers (UAW) stoppage has impacted just a small portion of the workforce with limited implications for the broader economy. But it is part of a pattern in labor-management conflicts that has resulted in the most missed hours of work in some 23 years, according to Labor Dept statistics. The UAW has taken a somewhat novel approach to this walkout, targeting just 3 factories involving less than 1/10 of the workers at the Big Three automakers’ membership. However, if things heat up & it turns into an all-out strike, bringing into play the 146K union members at Ford (F), GM (GM) & Stellantis,(STLA) that could change things. A broader strike also would complicate policymaking for the Federal Reserve, which is trying to bring down inflation without tipping the economy into contraction. American workplaces have taken a substantial hit from strikes this year. Aug alone saw some 4.1M labor hours lost this year, the most for a single month in 23 years, according to the Labor Dept. Combined with Jul, there were nearly 6.4M hours lost from 20 stoppages. YTD, there have been 7.4M hours lost, compared to just 636 hours total for the same period in 2022. Those big numbers have been the result of 20 large stoppages that have included the Writers Guild of America & Screen Actors Guild, state workers at the University of Michigan & hotel employees in Los Angeles. Some 60K health care workers in California, Oregon & Washington are threatening to walk out next. After years of being relatively quiescent, unions have found a louder voice in the high-inflation era of the past several years.
Striking unions are impacting the economy at level not seen in decades
Confidence among builders in the US housing market unexpectedly plunged in Sep for the 2nd straight month as a spike in mortgage rates continued to weigh on consumer demand for new homes. The National Association of Home Builders/Wells Fargo Housing Market Index, which measures the pulse of the single-family housing market, fell 5 points to 45, the lowest reading since Apr. The decline followed a 6-point drop in Aug. Any reading below 50 is considered negative. "High mortgage rates are clearly taking a toll on builder confidence and consumer demand, as a growing number of buyers are electing to defer a home purchase until long-term rates move lower," said Robert Dietz, chief economist at NAHB. Sentiment among builders had been steadily rising earlier this year as limited resale inventory pushed would-be buyers to seek out new construction instead. But when mortgage rates shot above 7% in Sep, it throttled demand among would-be homebuyers. Rates are expected to remain elevated, as the Federal Reserve has hinted that it may hold interest rates at peak levels for longer than previously anticipated. Rates on the popular 30-year fixed mortgage are currently hovering around 7.18%, according to Freddie Mac, well above the 6.02% rate recorded one year ago & the pre-pandemic average of 3.9%. It is near the highest level in & decades. "The two-month decline in builder sentiment coincides with when mortgage rates jumped above 7% and significantly eroded buyer purchasing power," said NAHB Chair Alicia Huey,. "And on the supply-side front, builders continue to grapple with shortages of construction workers, buildable lots and distribution transformers, which is further adding to housing affordability woes." Higher rates are also prompting more builders to use sales incentives in order to woo buyers: About 59% of builders indicated they are using all types of incentives, including buying down interest rates.
Homebuilder sentiment plunges again amid spike in mortgage rates
The pres of the United Auto Workers union
says a fresh offer of a 21% pay hike from STLA is "definitely a
no-go" as his rank-&-file have "asked for 40% pay increases" at the
bargaining table. The comments from Shawn Fain come as the UAW strike at plants owned by the Big Three automakers entered its 4th day. "We've
asked for 40% pay increases and the reason we've asked for 40% pay
increases is because in the last four years alone, the CEO pay went up
40%. They are already millionaires," Fain said. "It's shameful that one of the leaders of one of the
corporations is sitting in his second home in Acapulco while we are
bargaining rather than being at the bargaining table.," Fain added. When asked about a 21% pay hike offer, Fain said it is "definitely a no-go." The
automaker said Sat that "the offer currently on the table would
provide Stellantis Hourly Employees with cumulative raises of nearly 21%
during this next contract, with an immediate 10% increase at the time
of ratification." "Additionally, we proposed increasing wages for
all our Supplemental Employees with a new starting wage rate of $20 per
hour – a $4.22 per hour, or 26.7%, increase," it continued. STLA also said Sat it has "delivered four comprehensive economic proposals to date. Our bargaining team continues to work days, nights and weekends in a
responsible manner to fully understand and address each of the Union’s
nearly 1,000 demands. Our team continues to take a serious and
responsible approach to find creative solutions for each of these
demands." "When we work together, we win together. And we look
forward to getting everyone back to work as soon as possible." The stock fell 31¢.
If you would like to learn more about STLA, click on this link:
club.ino.com/trend/analysis/stock/STLA_aid=CD3289&a_bid=6aeoso5b6f7
UAW rejects Stellantis' 21% pay hike offer: 'We’ve asked for 40%'
Gold futures climbed, giving up some early declines to settle at their highest in more than 2 weeks. The precious metal has been holding its ground, digesting prior gains, while outside fundamental pressures, such as overall strength in Treasury yields & strength in the $ fail to decisively push prices down. This is a positive for gold. Dec gold climbed by $7 (0.4%) to settle at $1953 an ounce. Prices based on the most-active contract settled at their highest since Sep 1.
Gold Futures Settle at Their Highest in More Than 2 Weeks
Oil prices climbed for a 3rd consecutive session to mark a fresh high for the year on continued bets for tighter global crude supplies. Taming the current bullishness will likely rest on non-OPEC production – especially US shale – showing a stronger response to higher prices & lifting global supply. There are early signs of that occurring, but it will need to be stronger & more consistent to reverse course. Oct West Texas Intermediate crude rose 71¢ (0.8%) to settle at $91.48 a barrel.
U.S. Oil Futures Settle at a Fresh High for The Year
Dow had a midday rally, but that did not last. High interest rates & oil prices along with a strike that has the potential for getting ugly were too much for investors to take.
Dow Jones Industrials
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