Markets rise led by Nasdaq which reached another record

Dow was up 188, advancers over decliners about 3-2 NAZ gained 168 to another record.  The MLP index was up 3+ to the 279s & the REIT index slid 1+ to the 374s.  Junk bond funds fluctuated & Treasuries saw more selling which brought higher yields.  Oil rose about 2 & went back over 80 & gold dropped 15 to 2333 (more on both below).

Dow Jones Industrials 

The cost of buying a new house just hit a fresh record, even as mortgage rates dipped to the lowest level in 3 months, according to a new report.  Findings from Redfin show the median US home sale price soared to $394K during the 4 weeks ended Jun 9, a 4.4% increase from a year earlier.  The monthly mortgage payment at that price, when accounting for the 6.99% median interest rate for a 30-year mortgage, is now $2829, roughly $30 shy of Apr's record.  Housing costs are unlikely to spiral any higher thanks to a recent drop in mortgage rates, which fell after the gov reported that inflation cooled in May.  However, they may not go much lower, either.  "The latest inflation report is good for homebuyers because it has already sent mortgage rates down, though this week’s Fed meeting will temper mortgage-rate declines," said Chen Zhao, economic research lead at Redfin.  "But on the other side of the coin, if lower mortgage rates bring back more demand than supply, that could erase the possibility that home-price growth softens, and push prices up even further."  There are a number of driving forces behind the affordability crisis.  Years of underbuilding fueled a shortage of homes in the country, a problem that was later exacerbated by the rapid rise in mortgage rates & expensive construction materials.  Higher mortgage rates over the past 3 years have also created a "golden handcuff" effect in the housing market.  Sellers who locked in a record-low mortgage rate of 3% or less during the pandemic began have been reluctant to sell, limiting supply further & leaving few options for eager would-be buyers.  Economists predict that mortgage rates will remain elevated for most of 2024 & that they will only begin to fall once the Federal Reserve starts cutting rates.  Even then, rates are unlikely to return to the lows seen during the pandemic, with investors predicting just 1 or 2 rate reductions this year.  Mortgage buyer Freddie Mac saidy that the average rate on a 30-year loan this week dipped slightly to 6.95%.  While that is down from a peak of 7.79% in the fall, it remains sharply higher than the pandemic-era lows of just 3%.  Available home supply remains down a stunning 34.3% from the typical amount before the COVID-19 pandemic began in early 2020, according to a separate report published by Realtor.com.

US home prices just smashed another record high as affordability crisis deepens

The US gov sued Adobe (ADBE), accusing the maker of Photoshop & Acrobat of harming consumers by enrolling them in its most lucrative subscription plans without clearly disclosing important terms.  In a complaint filed in the San Jose, California, federal court, the gov said ADBE failed to adequately disclose hefty early termination fees, sometimes reaching hundreds of $s, when customers sign up for “annual, paid monthly” subscription plans.  The gov said ADBE hides important terms in fine print & behind textboxes & hyperlinks, clearly discloses the fees only when subscribers try to cancel, & makes canceling an onerous & complicated process.  The lawsuit seeks civil fines, an injunction & other remedies.  ADBE stock dropped 6.57.

U.S. sues Adobe over subscription plan disclosures

Skyrocketing demand for a class of weight loss & diabetes treatments has lifted Eli Lilly (LLY) to new heights over the last year.  But the drugmaker has much more work it wants to do with that hard-won success, outgoing CFO Anat Ashkenazi said.  Ashkenazi, who will step in as the new CFO of Alphabet (GOOG) on Jul 31, has been key to managing the windfall in revenue & wave of investor optimism from LLY's diabetes injection Mounjaro & recently launched obesity drug Zepbound.  Ashkenazi took over as CFO at LLY in 2021 after roughly 2 decades with the pharmaceutical giant.  “You have to be a really good student of the business and understand it inside and out and understand the industry,” she said before her departure announcement.  “Only when we understand the full system, can we navigate it well so that we bring value to it…That’s my role as CFO.”  Her tenure hasn’t come without challenges: LLY & rival Novo Nordisk (NOVO) have both struggled to manufacture enough supply of their treatments to meet unprecedented demand, causing nationwide shortages of those drugs.  Their weekly injections are part of a class of drugs called GLP-1 agonists, which mimic certain hormones produced in the gut to suppress a person's appetite & regulate their blood sugar.  Some analysts expect the market for those drugs to be worth $100B by the end of the decade.  LLY's boom in revenue has allowed the company to invest heavily to scale up manufacturing, which will eventually get more medicine into patients’ hands, Ashkenazi said.  “As we start selling product and we get the revenue in and cash flow associated with that sale,” the company wants to “funnel that cash flow back to the business to invest in those manufacturing facilities,” she added.  LLY does not expect to match the pace of demand this year & maybe not even in 2025, Ashkenazi said, but the pharmaceutical giant has made encouraging progress so far.  LLY stock jumped 7.54 to a new record.

How Eli Lilly is managing soaring demand for GLP-1s, according to outgoing CFO

Gold inched down as traders look forward to US data that will help clarify the economic outlook & the potential for rate cuts by the Federal Reserve.  Spot bullion dipped by about 0.5% following hawkish comments from Federal Reserve Bank of Minneapolis Pres Neel Kashkari, who said yesterday the central bank can take its time & watch incoming data before starting to cut interest rates.  Fed policymakers signaled they now only expect to cut rates once this year, compared with 3 reductions forecast in Mar.  Data on retail sales, housing & more due later this week will help sharpen the national picture & the chances for cuts.  Higher rates are generally negative for the non-interest bearing precious metal.  Meanwhile, central banks in Norway, Switzerland & the UK are due to set rates later this week, as are institutions in Indonesia & Australia.  China's central bank today left a key interest rate unchanged, as the Fed did last week, displaying caution on monetary easing.  The Bloomberg Dollar Spot Index added 0.1%, weakening the appeal of commodities, including gold, priced in the currency.  Spot gold fell to $2321 an ounce.

Gold Edges Lower as Market Prepares for More US Economic Data

Oil futures ended solidly higher, extending on last week's gains after shaking off an initial dip following data that showed a fall in China's crude demand in May.  Chinese oil-refinery output fell 1.8% year over year in May.  Data showed China's oil-refining activities slipping to the lowest rate this year as some plants extend their maintenance due to weak margins.  But crude appeared to find its footing, building on a rebound seen after both Brent & WTI touched their lowest levels since Feb in the wake of a Jun 2 decision by the Organization of the Petroleum Exporting Countries & its allies to begin unwinding some voluntary production cuts beginning in Oct.  WTI crude oil for Jul closed up 2.15 to settle at $80.52 per barrel.

Oil prices end with strong gains to build on last week’s rebound

Stocks started trading a little lower, then buyers kept coming & coming, with Dow finishing near its high for the day.  And NAZ made 1 more record which is about double where it was when 2020 started..  Not bad.  Stockholders s.eem to be adjusting to high interest rates & accepting that they will remain for some time.  Meanwhile economic data is really short of great.  That's good, but not great.