Markets jump as Fed comments extend the rally

Dow soared another 313, advancers over decliners better than 3-1 & NAZ gained 79.  The MLP index was steady in the 283s & the REIT index rose 3+ to the 384s.  Junk bond funds edged higher & Treasuries were flattish (more below).  Oil dipped lower, going under 81, & gold went up 17 to 2178.

AMJ (Alerian MLP Index tracking fund)

Sales of existing homes surged 9.5% in Feb from Jan to 4.38M units, on a seasonally adjusted annualized basis, according to the National Association of Realtors (NAR).  Housing analysts had been expecting a slight drop.  Sales were down 3.3% year over year, but it was the largest monthly gain since Feb 2023.  Sales surged the most in the West, up 19.4%, & the South, up 16.4%.  “Additional housing supply is helping to satisfy market demand,” said Lawrence Yun, NAR’s chief economist.  “Housing demand has been on a steady rise due to population and job growth, though the actual timing of purchases will be determined by prevailing mortgage rates and wider inventory choices.”  Inventory rose 10.3% year over year to 1.07M homes for sale at the end of Feb.  That represents a still low 2.9-month supply at the current sales pace.  Higher demand continued to push the median price higher, up 5.7% from the year before to $384K, the 8th straight month of annual gains.  Competition was stiff, with 20% of homes selling above list price.  The sales count is based on closings, so contracts likely signed in Dec & Jan, when the 30-year fixed mortgage rate dropped to the mid 6% range.  It is now over 7%, according to Mortgage News Daily.  First-time buyers, however, did not surge with overall sales.  They represented just 26% of buyers in Feb, down from 28% in Jan.  Roughly 40% is the historical norm.  All-cash sales were at 33%, up from 28% the year before.  “The stock market, maybe that is helping, or the record-high home prices. People from expensive states like California are going to more affordable markets like Florida or Georgia and paying all cash,” Yun added, consumers may be accepting a “new normal” for mortgage rates.

February home sales spike 9.5%, the largest monthly gain in a year, as supply improves

The Dept of Justice plans to sue Apple (AAPL), a Dow stock, over allegations of violating antitrust law, according to a source familiar with the lawsuit.  Attorney General Merrick Garland & other top DOJ officials are set to make an announcement later today.  The lawsuit targets AAPL's grip on the smartphone market.  "Consumers should not have to pay higher prices because companies violate the antitrust laws," Garland said in a statement.  "We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law."  If left unchallenged, AAPL will only continue to strengthen its smartphone monopoly.  "The Justice Department will vigorously enforce antitrust laws that protect consumers from higher prices and fewer choices. That is the Justice Department’s legal obligation and what the American people expect and deserve," he added.  The DOJ lawsuit alleges that AAPL has blocked innovative apps, suppressed mobile cloud streaming services, excluded cross-platform messaging apps, diminished functionality of non-AAPL smartwatches & limited 3rd-party digital wallets.  AAPL pushed back on the lawsuit.  "At Apple, we innovate every day to make technology people love—designing products that work seamlessly together, protect people’s privacy and security, and create a magical experience for our users. This lawsuit threatens who we are and the principles that set Apple products apart in fiercely competitive markets. If successful, it would hinder our ability to create the kind of technology people expect from Apple—where hardware, software, and services intersect. It would also set a dangerous precedent, empowering government to take a heavy hand in designing people’s technology. We believe this lawsuit is wrong on the facts and the law, and we will vigorously defend against it," the company said.  The stock dropped 5.94 (3%).

Justice Department to announce sweeping antitrust lawsuit against Apple, source reveals

Treasury yields fell as investors digested the Federal Reserve's latest guidance on what the path ahead could look like for interest rates.  The yield on the 10-year Treasury was down by over 4 basis points at 4.229% & the 2-year Treasury  yield was last about 4 basis points lower at 4.566%.  Yields & prices move in opposite directions & 1 basis point equals 0.01%.  The central bank left rates unchanged at the conclusion of its Mar policy meeting, but signaled that it anticipates cutting 3 times this year.  However, policymakers failed to offer hints about when the rate cuts may come.  In a press conference following the decision, Fed Chair Jerome Powell said that he expects interest rates to ease as long as its supported by the economic data.  “We believe that our policy rate is likely at its peak for this type of cycle, and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint at some point this year,” he said.  The dot plot, which reflects projections from Fed officials, also showed that policymakers are expecting 3 rate cuts for 2025, one less than provided in Dec.  Traders are currently pricing in a 68% chance of a cut in Jun, according to CME Group's FedWatch tool.

Treasury yields fall as investors digest Fed policy guidance

Stocks extended their record-setting rally as relieved investors continued to celebrate Fed signals that it will delay but not slow rate cuts.  Meanwhile negative thinking investors keep buying gold even though it is in record territory.

Dow Jones Industrials