Markets meander, looking for direction

Dow fell 58, advancers over decliners 4-3 & NAZ was off 54.  The MLP index added 1 to the 274s & the REIT index went up 2+ to the 377s.  Junk bond funds were sold & Treasuries had only very limited buying.  Oil pulled back fractionally in the 78s & gold slid back 1 to 2042.

AMJ (Alerian MLP Index tracking fund)

Higher mortgage rates continue to hit demand from both current homeowners & potential homebuyers.  Total mortgage application volume dropped 5.6% last week from the previous week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index.  An additional adjustment was made to account for the Presidents Day holiday.  The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766K or less) decreased to 7.04% from 7.06%, with points increasing to 0.67 from 0.66 (including the origination fee) for loans with a 20% down payment.  The rate was about a qtr percentage point higher than it was one year ago.  As a result, applications to refinance a home loan were 7% lower than the previous week & were 1% lower than the same week one year ago.  “Higher rates in recent weeks have stalled activity, and last week it dropped more for those seeking FHA and VA refinances,” said Mike Fratantoni, MBA's chief economist.  FHA & VA loans are generally used by lower-income borrowers because they have lower down payment requirements.  Applications for a mortgage to purchase a home dropped 5% for the week & were 12% lower than the same week one year ago.  Fratantoni noted, however, that mortgage demand from buyers looking at newly built homes jumped 19% year over year in Jan.  “This disparity continues to highlight how the lack of existing inventory is the primary constraint to increases in purchase volume. However, mortgage rates above 7% sure don’t help,” he added.  Rates were in the 6% range for all of Jan.

7% interest rates hit weekly mortgage demand hard

Apple (AAPL), a Dow stock,  reportedly abandoning efforts to build an electric car after spending nearly a decade & Bs of $s on the project.  AAPL announced internally that it was canceling its EV endeavor, dubbed Project Titan, surprising the nearly 2000 employees that have been working on it.  The outlet said some of the workers would be redirected to focus on AAPL's generative artificial intelligence division, while others will be laid off.  Rumors have swirled for years that AAPL was trying to build an autonomous electric taxi in an effort to take on EV giant Tesla (TSLA).  Initial reports about the secretive project emerged in 2015.  CEO Cook said the effort was "the mother of all AI projects… probably one of the most difficult AI projects."  The stock fell 1.04.

Apple scraps EV project after nearly a decade and billions of dollars as it shifts its focus to AI

TJX (TJX) holiday sales jumped 13% as shoppers hunting for deals flocked to the off-price retailer.  Despite the strong qtr & end to its fiscal year, the company issued guidance that came in light of  expectations as it prepares for tougher comps in the year ahead & an uncertain growth trajectory.  For the qtr ended Feb 3, the company reported EPS of $1.22, compared with 89¢ a year earlier.  Excluding an additional week in the qtr, TJX reported EPS of $1.12.  Sales rose to $16.4B, up about 13% from $14.5B a year earlier.  The prior-year period's sales included one fewer week.  For the current qtr, it expects EPS of 84-86¢, light of the higher end of expectations of 82-93¢.  For the full year, it expects EPS of $3.94-4.02, compared to estimates of $3.88-4.40.  Over the last year, it raised its sales & profit guidance numerous times.  Ahead of the holiday season, it struck a positive tone as other retailers issued cautious or disappointing guidance amid slowing demand & an uncertain economy.  During the holidays, consumers were laser-focused on finding the best deals & discounts, spending record amounts on Black Friday & Cyber Monday & pulling back when promotions weren't available.  TJX was well-positioned during the period because consumers were able to shop for a wide range of gifts & at prices that tend to be lower than competitors.  The stock went up 40¢.

TJX tops earnings estimates but issues light guidance ahead of uncertain growth path

Stocks opened with significant selling, but buyers returned to trim early losses.  Traders are still are looking for direction while they wait for important inflation data tomorrow.

Dow Jones Industrials