Markets slide as traders weigh Treasury yields, corporate earnings

Dow fell 13 in choppy trading & down 200 from early highs, advancers over decliners 3-2 & NAZ was off 34.  The MLP index continued flattish above 250 & the REIT index slid  fractionally lower to the 341s.  Junk bond funds continued weak & Treasuries were very heavily sold, raising yields substantially.  Oil slid back pennies in the 86s & gold was off 1 to 1933 (more on both below).

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Home foreclosures are on the rise as Americans continue to grapple with the ongoing cost-of-living crisis.  That is according to a new report published by real estate data provider ATTOM, which found that foreclosure filings – which includes default notices, scheduled auctions & bank repossessions – surged 28% in the 3rd qtr to 125K.  Foreclosures are up 34% from the same time one year ago.  "Even with the national economic upturn & job stability, it's evident that some homeowners are still grappling with the pandemic's financial aftermath or encountering new challenges," said Rob Barber, ATTOM CEO.  The report also indicated that there were 37K properties with foreclosure filings in Sep – up 11% from the previous month & up 18% from 2022.  Although foreclosures are on the rise, they remain well below the levels recorded during the 2008 financial crisis.  "Foreclosure starts are nearly back to where they were two years ago when the federal government lifted a pandemic-related moratorium on most foreclosure filings," Barber said.  "This rise in foreclosures might also be attributed to pending filings finally processing."  However, the problem may soon get worse, thanks to the resumption of student loan payments.  Real estate experts are bracing for a significant blow to the market since the pandemic-era freeze on federal student loan payments officially came to an end at the beginning of Oct.  A recent poll conducted by Pulsenomics found that most economists said homeownership rates will be affected for at least a year by the resumption of student loan payments & many predicted the impact could be longer than that.  More than 75% of the survey respondents said that the payments will have a negative effect on homeownership that lasts for a year or more.  About 40% predicted an even longer impact of at least 3 years.  On top of that, many of the economists believe the resumption of payments could significantly hit the US homeownership rate & nearly ¼ expect it would cause an uptick in the delinquency rate.  About 44M borrowers in the US were affected by the payment pause, which initially began in Mar 2020 at the onset of the COVID-19 pandemic.  Collectively, borrowers are to resume paying about $10B a month, according to an analysis from JPMorgan.  The potential hit comes at an already precarious time for the housing market, thanks to the astronomic rise in mortgage rates over the past year.  In fact, housing affordability is worse today than during the peak of the 2008 housing bubble.

Home foreclosures surge to highest level since pandemic began

General Motors (GM) said it is delaying production of all-electric trucks at a Michigan plant by at least a year to “better manage capital investments”& implement improvements in an effort to make the new EVs more profitable.  GM now plans to begin construction of its next-generation EVs at Orion Assembly in suburban Detroit by late-2025, instead of next year.  The factory currently produces Chevrolet Bolt EV models, which GM will cease producing at the end of this year.  The delay is the latest sign of potential trouble for ambitious, multibillion-dollar plans of traditional automakers to move to electric vehicles.  Adoption of EVs, which remain costly to produce and purchase, has been slower than many expected.  “General Motors today confirmed it will retime the conversion of its Orion Assembly plant to EV truck production to late 2025, to better manage capital investment while aligning with evolving EV demand. In addition, we have identified engineering improvements that we will implement to increase the profitability of our products,” the company said.  The change in plans is not connected to the company's ongoing contract negotiations with the United Auto Workers union.  However, the contentious talks do involve EVs & current contract proposals by the company are expected to be more expensive than those in year's past.  The production delay calls into question GM's previously announced EV goals, including cumulative production of 400K EVs in North American from 2022 thru mid-2024, which had already been pushed back.  GM also has a goal to exclusively offer consumer EVs by 2035.  The stock rose 27¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM_aid=CD3289&a_bid=6aeoso5b6f7

GM to delay all-electric truck production at Michigan plant until late-2025

Defense contractor Lockheed Martin ( LMT) shares sank despite reporting better-than-expected 3rd-qtr revenue & profit, as geopolitical tensions fueled sustained demand for its military equipment.  The war in Ukraine has prompted restocking arms & ammunition such as shoulder-fired missiles, artillery & other weaponry, providing US defense companies with lucrative Pentagon contracts.  LMT's weapons, such as the guided multiple launch rocket system & Javelin anti-tank missiles, made in conjunction with defense company RTX have proven critical to Ukraine's war efforts.  However, LMT is still hindered by pandemic-related labor & supply chain disruptions that continue to affect business lines like the aeronautics business which makes the advanced F-35 fighter jet.  "We are still paced by a few key items," COO Frank St John said, such as "processor assemblies, solid-rocket motors, castings and forgings, though they have seen progress in this last qtr.  As a result, sales at its aeronautics unit, the largest by size, saw a 5.2% decline in the 3rd qtr.  The company last month cut its full-year F-35 jet delivery target on supplier delays but reaffirmed its 2023 financial goals.  The stock dropped 40¢.
If you would like to learn more about LMT, click on this link:
club.ino.com/trend/analysis/stock/LMT_aid=CD3289&a_bid=6aeoso5b6f7 

Lockheed beats estimates on sustained weapons demand amid geopolitical tensions

Gold prices closed with a small gain, supported by safe-haven buying amid concerns over Middle East turmoil even as yields climb after the US reported retail sales surged last month.  Gold for Dec closed up $1 to settle at $1935 per ounce.  The rise comes even as the US reported retail sales rose 0.7% in Sep from the prior month, well above the consensus estimate for a 0.2% rise & the latest data point that may convince the Federal Reserve to once again raise interest rates to slow the economy to lower inflation. The $ rose following the report, with the ICE dollar index last seen up 0.02 points to 106.26.  The metal has been supported by safe haven interest amid Middle East turmoil as Israel readies to assault the Gaza Strip following terror attacks from Hamas earlier this month that killed hundreds.  Pres Biden will visit the country in support of Israel while looking to ensure humanitarian aid for Gaza's 2M citizens who lack food, power & water as Israel lays siege to the region.

Gold Closes Higher on Safe Haven Buying as Yields Rise after US Retail Sales Surged Last Month

Oil prices edged higher as investors wait to see if US diplomatic efforts & a trip by Pres Biden to Israel will prevent the conflict in the Middle East from widening.  Brent crude futures settled up 25¢ to $89.90 a barrel.  US West Texas Intermediate crude (WTI) was unchanged at $86.66.  Oil prices fell earlier in the session when Richmond Federal Reserve Bank chief Thomas Barkin said that higher long-term US borrowing costs are putting downward pressure on demand but it was unclear how that will affect the central bank's' rates decision in 3 weeks.  Interest rate hikes to curb inflation can slow economic growth & reduce oil demand.  Both oil benchmarks rallied last week on fears that the Israel-Hamas conflict could widen into the oil-producing region.  Global benchmark Brent gained 7.5% in its largest weekly gain since Feb.  Biden's visit to Israel will seek to balance showing support for Israel's war on Hamas & trying to rally Arab states to help prevent a regional conflict, after OPEC-member Iran pledged "pre-emptive action" from the "resistance front" of its allies that include the Hezbollah movement in Lebanon.

Oil Prices Edge Higher ahead of Biden Middle East Trip

The economy continues to stumble & investors are scratching their heads again.  Meanwhile interest rates are near or at highs not seen in more than 2 decades.  Stocks continue to meander.

Dow Jones Industrials