Dow inched up about 1 (good enough for a new record), advancers barely ahead of decliners & NAZ rose 90. The MLP index added 2+ to the 252s & the REIT index slid back 1+ to the 391. Junk bond funds hardly changed & Treasuries had some selling, raising yields. Oil continued strong, up 1 to the 72s, & gold gained 5 to 2040 (more on both below).
AMJ (Alerian MLP Index tracking fund).
Confidence among builders in the US housing market rebounded in Dec from an 11-month low as high mortgage rates finally began to fall. The National Association of Home Builders/Wells Fargo Housing Market Index (NAHB), which measures the pulse of the single-family housing market, rose 3 points to 37, slightly more than expected. The increase followed a 6-point drop in Nov. Any reading below 50 is considered negative. "With mortgage rates down roughly 50 basis points over the past month, builders are reporting an uptick in traffic as some prospective buyers who previously felt priced out of the market are taking a second look," said Alicia Huey, NAHB chair. Sentiment among builders began steadily falling at the end of the summer after mortgage rates shot above 7%, throttling demand among would-be homebuyers. But borrowing costs have retreated over the past month as many investors believe the Federal Reserve is done with its aggressive interest-rate hike campaign. Rates on the popular 30-year fixed mortgage are currently hovering around 6.95%, according to Freddie Mac, down from a high of 7.79% at the end of Oct but well above the pre-pandemic average of 3.9%. The recent decline has prompted a burst of optimism among homebuilders that the worst may be over. "The housing market appears to have passed peak mortgage rates for this cycle, and this should help to spur home buyer demand in the coming months, with the HMI component measuring future sales expectations up six points in December," said NAHB chief economist Robert Dietz.
Homebuilder sentiment stirs back to life as mortgage rates fall
VF Corp (VFC), a Dividend Aristocrat, reported that a hack had affected its ability to fulfill some orders ahead of the holidays. Hackers encrypted “some” systems & made off with
personal data. Those are some hallmarks of ransomware, where attackers
try to extort companies in exchange for hefty payment. VFC declined
to comment on whether the incident was a ransomware attack. VFC announced the incident on the same day that the Securities & Exchange Commission's new cyber disclosure rules took
effect. Those regulations mandate that companies report “material
cybersecurity incidents” to their investors within 4 days of
determining that a hack would have an effect on their bottom lines. VFC first identified hackers in its system on Dec 13, meaning it took
relatively little time for the company to identify the threat as
material. The attack is expected to hit the company's operations
in the lead up to the critical holiday shopping period. The company said
the breach has affected its ability to fulfill orders, but customers
will still be able to place them online. The full scope of the attack is still not known & it will likely continue to have a material impact until recovery efforts are complete, the company added. The stock sank 1.56 (8%).
VF Corp. shares tumble as it says cyberattack could hamper holiday fulfillment
Oil major has joined a growing list of firms pausing shipping through the Suez Canal following a series of attacks on vessels by Houthi militants from Yemen, as the US pledged an intl effort to combat the situation. “In light of the deteriorating security situation for shipping in the Red Sea, bp has decided to temporarily pause all transits through the Red Sea,” the company said. “We will keep this precautionary pause under ongoing review, subject to circumstances as they evolve in the region.” During a trip to Israel today, Defense Secretary Lloyd Austin said the attacks were “reckless, dangerous,” & that they “violate international law.” “So we’re taking action to create an international coalition to address this threat,” he said. “This is not just a U.S. issue, this is an international problem and it deserves an international response.” Austin said he was convening a virtual meeting tomorrow with ministers in the region & beyond “to ensure freedom of navigation in the area.” Norwegian energy firm Equinor said it had chosen to reroute its ships in the area but had not made a decision on future activity. Oil tanker group Frontline said it would avoid passages thru the Red Sea in the near-term. Shipping giants MSC, Hapag-Lloyd, CMA CGM & Maersk have also all announced suspensions of travel thru the Red Sea due to the drone threat, meaning no access to the key link between Europe & Asia between the Middle East & North Africa.
BP becomes latest to pause Red Sea shipments as Houthi attacks continue
Gold edged higher, staying firmly above the $2000 mark as
the $ eased while treasury yields rose.
Gold for Feb was last seen up $4 to $2040 per
ounce. The metal is down from a record high of $2809 set at the start of
the month & briefly fell back under the $2000 mark last week after
Federal Reserve chair Jerome Powell said the central bank could begin
rolling back interest rates next year, only to be contradicted by other
members of the central bank's policy committee. Gold ended the week higher & continues to hold up above $2K raising
the question whether a Santa rally could come. The $ moved lower making the metal more affordable for intl buyers. The ICE dollar index was last seen down 0.01 points to 102.54. Treasury
yields were higher, raising the carrying cost of owning gold. The 2-year note was last seen paying 4.472%, up 3.7 basis points, while
the yield on the 10-year note was up 4.9 basis points to 3.963%.
Gold Closes Higher on a Weaker Dollar as Treasury Yields Climb
West Texas Intermediate (WTI) closed higher, gaining a geopolitical-risk premium as attacks on Red Sea shipping by Houthi militants in Yemen have forced the suspension of some shipments through the Suez Canal. WTI crude for Jan closed up $1.04 to settle at $72.47 per barrel, while Feb Brent crude, the global benchmark, was last seen up $1.50 to $78.05. BP said it is suspending tanker shipments thru the Red Sea, joining other shippers who have stopped transiting the sea following drone & missile attacks on ships by the Houthi in support of Hamas & to impede Israel's war on the group. Fresh attacks were reported today by the UK Navy. The attacks come as hedge funds cover short positions as hedge funds sold oil ahead of last week's meeting of the Federal Reserve's policy committee, according the Commodities Futures Trading Commission's commitments of traders report.
WTI Crude Oil Closes With a Gain as Attacks Force the Suspension of Some Red Sea Shipping
In the AM buyers tried to take stocks higher, but that effort did not last. Sellers returned at midday to a rise measured in chump change. The Dow looks very tired. The rebels from Yemen are becoming a bigger part of the story for oil.
Dow Jones Industrials
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