Dow went up 219, advancers pver decliners 5-1 & NAZ gained 157. The MLP index added 1+ to the 246s & the REIT index rose 3+ to the 339s. Junk bond funds were little changed & Treasuries saw heavy buying sharply reducing yields. Oil slid back 1 to the 85s following yesterday's rally & gold added 6 to 1870.
AMJ (Alerian MLP Index tracking fund)
Top real estate and banking officials are calling on the Federal Reserve to stop raising interest rates as the industry suffers thru surging housing costs & a “historic shortage” of available homes for sale. In a letter addressed to the Fed Board of Governors & Chair Jerome Powell, the officials voiced their worries about the direction of monetary policy & the impact it is having on the beleaguered real estate market. The National Association of Home Builders, the Mortgage Bankers Association & the National Association of Realtors said they wrote the letter “to convey profound concern shared among our collective memberships that ongoing market uncertainty about the Fed’s rate path is contributing to recent interest rate hikes and volatility.” The groups ask the Fed not to “contemplate further rate hikes” & not to actively sell its holdings of mortgage securities at least until the housing market has stabilized.” In recent days, several officials have noted that the central bank could be in a position to hold off on further increases as it assesses the impact the previous ones have had on various parts of the economy. However, there appears to be little appetite for easing, with the benchmark fed funds rate now pegged at 5.25-5.50%, its highest in some 22 years. At the same time, the housing market is suffering thru constrained inventory levels, prices that have jumped nearly 30% since the early days of the Covid pandemic & sales volumes that are off more than 15% from a year ago. “We urge the Fed to take these simple steps to ensure that this sector does not precipitate the hard landing the Fed has tried so hard to avoid,” the group said. The letter comes as the Fed is weighing how it should proceed with monetary policy after raising its key borrowing rate 11 times since Mar 2022.
Housing industry urges Powell to stop raising interest rates or risk an economic hard landing
Treasury yields fell as trading resumed after Columbus Day, with investors weighing the potential geopolitical & economic impact of the Israel-Hamas war. The 2-year Treasury yield was down by about 10 basis points to 4.976% & the 10-year Treasury yield was last more than 9 basis points lower at 4.688%. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Concerns about the implications of the Israel-Hamas conflict continued, prompting investors to consider whether it may affect markets & the global economy. Investors poured into gov bonds, which are traditionally seen as safer investments, driving Treasury yields lower. Elsewhere, Federal Reserve officials gave hints about the outlook for interest rates. The odds of another rate hike from the Federal Reserve in Nov is falling. The Intl Monetary Fund raised its US growth forecast for 2023 by 0.3 percentage points to 2.1%, citing resilience from consumers & stronger business investment.
Treasury yields fall as investors seek safe havens amid Israel-Hamas conflict
Many shoppers anticipate their holiday gift spending will stay flat or increase from last year, according to a survey published. In the Shopify-Gallup Holiday Shopper Pulse survey, the share of
American holiday shoppers who indicated they had such expectations came in at
74%, with 55% anticipating spending equal & 19% saying more. 26%, anticipated spending less compared to last year For 18-29-year-old holiday shoppers,
the survey found a slightly higher percentage than all American
shoppers reported their planned holiday spending would be at a level "at
least" on par with last year’s, hitting 78%. Spending more was expected
by 35% of that group. That data stemmed from a survey that took place Sep 1-23 & involved over 900 US adults. "We
often say that people vote with their wallets, that the way they choose
to spend their money is a vote for what they want to see more of in the
world," Shopify Pres Harley Finkelstein said. We
know it’s a tough time financially
for a lot of people right now. But the fact that they're still planning
to shop at their favorite retailers to spend their tightened budgets on
gifts for the people they love, from businesses they believe in, it's
inspiring. "High prices have been one issue that has put a strain on many people across the US. Separately, Adobe Analytics estimated the upcoming holiday season would see $221B worth of online shopping sales.
Survey: many holiday shoppers anticipate gift spending will be equal or exceed last year
Safe haven investments (gold & Israel) & risky investments (stock) are both in demand. That divergence can't last.
Dow Jones Industrials
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