Dow declined 151, advancers were modestly ahead of decliners & NAZ was off 30. The MLP index gained 2+ to 297 & the REIT index fell 3+ to the 394s. Junk bond funds saw modest purchasing & Treasuries trended sideways so yields hardly budged. Oil remained in demand, up 1+ to the 73s, on stronger demand outlook & gold roared ahead 27 to 2668 (more on both below).
Dow Jones Industrials
Mortgage rates are up for a 3rd straight week to the highest since Jul, further hindering demand in the already-stagnant housing market. Freddie Mac's latest Primary Mortgage Market Survey showed that the average rate on the benchmark 30-year fixed mortgage jumped to 6.91%, up from last week's reading of 6.85%. The average rate on a 30-year loan was 6.62% a year ago. "Inching up to just shy of seven percent, mortgage rates reached their highest point in nearly six months," said Sam Khater, Freddie Mac’s chief economist. "Compared to this time last year, rates are elevated and the market’s affordability headwinds persist." The average rate on the 15-year fixed mortgage climbed to 6.13% from 6.0% last week. 1 year ago, the rate on the 15-year fixed note averaged 5.89%.
Mortgage rates kick off 2025 with an increase, nearing 7%
Weekly unemployment claims hit their lowest level since Apr during the final full week of 2024. In the latest sign that layoffs remain low, data from the showed 211K initial jobless claims filed last week were down from 220K the week prior & below the 221K estimate. Meanwhile, 1.84M continuing claims were filed, down from the 1.89M seen the week prior. Economists largely believe the continued low number of weekly jobless claims combined with relatively steady continuing claims reflects a low hire, low fire type of labor market. The holidays could've impacted the recent claims numbers. But zooming out, this data falls in line with the recent trend that the labor market deterioration remains gradual. With the unemployment rate moving higher throughout most of 2024 & monthly job gains slowing, the labor market is ending the year having cooled from where it started. The hiring rate fell from 3.7% at the end of 2023 to 3.3% at the end of 2024, further showing that while Americans aren't losing their jobs, it's becoming increasingly harder to find them too.
Jobless claims hit 8-month low as 'low hire, low fire' market persists
Apple (AAPL), a Dow stock, is offering discounts on its top-end iPhones & other products in
China for the upcoming Chinese New Year as the tech giant faces
heightened competition in 1 of its most crucial markets. The
Cupertino giant is giving customers 500 Chinese yuan ($68.50) off of the
iPhone 16 Pro or iPhone 16 Pro Max, & 400 yuan off the iPhone 16 or
iPhone 16 Plus. Offers also include discounts for the iPhone 14 &
iPhone 15. For
a long time AAPL has resisted offering discounts thru its own
retail channels. Instead, 3rd-party retailers would offer deals at
certain times of the year. However, as competition ramps up, AAPL has
been more inclined in the last year to post seasonal deals. AAPL offered a similar Chinese New Year deal last year & in May, the company offered hefty discounts as part of China’s 618 shopping festival. The firm's latest challenge has come from a resurgent Huawei & other
domestic brands. Its smartphone shipments fell 6% year-on-year in
mainland China in the 3rd qtr of 2024, according to Canalys & the
company's market share also slipped to 14% from 16% a year earlier. AAPL stock fell 6.57 (3%).
Apple offers holiday discount in China as Huawei competition heats up
Gold prices extended gains near $2650 in the North American open after the New Year holiday. The precious metal gained as its appeal as a safe-haven asset increased, with investors focused on Pres-elect Donald Trump taking office on Jan 20. Trump's expected incoming policies, such as higher import tariffs & lower taxes, would be a boon for Gold. Higher import tariffs would lead to a potential global trade war & lower taxes would increase inflationary pressures in the US. Gold tends to outperform amid economic uncertainty as a safe-haven bet & higher price pressures, given that investors use the precious metal as a hedge against inflation. The 10-year US Treasury yield fell near 4.54% earlier in the year as its rally stalled. In general, lower yields on interest-bearing assets result in lower opportunity costs for non-yielding assets, such as gold, making them attractive bets.
Gold surges near $2,650 as investors weigh Trump's impact on global economy
Oil prices edged higher, the first trading day for 2025, as investors returning from holidays cautiously eyed China's economy & fuel demand following Pres Xi Jinping's pledge to boost growth. Brent crude futures were up 16¢ at $74.80 a barrel after closing up 65¢ on Tues, the last trading day for 2024. US West Texas Intermediate crude futures were up 16¢ at $71.88 a barrel after closing up 73¢ in the previous session. Xi said Tues in his New Year's speech that the country will implement more proactive policies to boost growth by 2025. China's factory activity grew in Dec, a Caixin/S&P Global private sector survey showed, but at a slower pace than expected amid concerns over the trade outlook & risks from tariffs proposed by US Pres-elect Donald Trump.
Oil Prices Rise as Investors Return From Holidays
Stocks erased session gains today to kick off the first trading day of the new year as investors returned from holiday. Markets were eyeing a comeback after a year-end slide to begin the week, but buyers were largely absent today. Tesla (TSLA) shares slid almost 6% after the electric vehicle maker posted its first decline in annual deliveries, &, along with AAPL's fall (above), kept buyers away.
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