Dow jumped up 137 (closing at the record high), advancers over decliners about 3-2 & NAZ gained 59. The MLP index gave back 1+ to the 217s & the REIT index advanced 3+ to the 398s. Junk bond funds crawled higher & Treasuries were purchased today. Oil rose over 61 & gold added 4 to 1483 (more on both below).
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](https://www.kitco.com/images/live/gold.gif?0.2180338269244485)
The Senate passed the first of 2 spending bills it plans to approve to prevent a gov shutdown. The first measure covers 8 appropriations bills & passed by a 71-23 margin. The 2nd piece include the other 4. The House has already cleared both pieces of legislation. The pres needs to sign the bills by tomorrow to keep federal depts running. Trump’s advisors have said he will approve the measures to fund the gov thru Sep 30. The $1.4T appropriations package boosts spending for both the military & domestic programs. It also scraps key taxes to fund the Affordable Care Act & raises the tobacco buying age to 21. Congress appears poised to avoid another shutdown after lawmakers avoided a major dispute with the pres over funding for barriers at the US-Mexico border. The package includes nearly $1.4B for border fencing, the same level as last year, which caused a group of House Dems to oppose it. Some Reps also voted against the funding legislation, criticizing the increase in spending & a rushed approval process. Earlier this year, Congress approved a 2-year deal to suspend the federal debt ceiling & set budget levels. It took months, & 2 short-term spending bills, for lawmakers to agree on where to actually send the money. Dems have pointed to what they call several priorities included in the sprawling spending package. It puts $25M toward federal gun violence research, funding the effort for the first time in 20 years. The legislation also sets aside $425M for election security grants. Trump & Rep allies have cheered the $22B increase in defense spending & 3.1% raise for military service members included in the spending plans. The bills, which would repeal a variety of health care-related levies including the “Cadillac” tax on high-cost plans, could add $500B to federal debt over a decade, according to the Committee for a Responsible Federal Budget.
Senate passes first of two spending bills to avoid government shutdown, with second vote ahead
Housing supply hits record low, igniting prices
The US economy may have stabilized just before the year-end holiday season after a late-summer swoon. The Leading Economic Index (LEI) was unchanged in Nov, breaking a string of 3 straight declines, the Conference Board said. Big stock-market gains, improved consumer confidence & stronger home sales reflected a firming up in economy last month. These factors offset some weakness in labor markets & manufacturing. The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks and valleys. The US economy has slowed to a modest pace of growth, but talk of recession has faded. A series of interest-rate cuts by the Federal Reserve & the Trump administration's agreement with China to ratchet down trade policy tensions has bolstered consumer confidence & driven the stock market to fresh records. Economists predict more of the same for early 2020.
Oil futures ended higher & logged their highest settlement since mid-Sep, with global benchmark prices stretching their gains to a 6th consecutive session. Oil's climb came a day after data showed a weekly decline in US crude inventories. West Texas Intermediate crude for Jan delivery rose 29¢ (0.5%) to finish at $61.22 a barrel. The contract expired at the end of the session. Feb WTI crude, the new front-month contract, rose by 33¢ (0.5%) to settle at $61.18. Feb Brent crude added 37¢ (0.6%) to settle at $66.54 a barrel. That stretched its streak of gains to a 6th consecutive session, the longest winning streak since Jan when the market rose for 10 straight sessions. Yesterday oil on bounced back from early losses after the Energy Information Administration on reported that US crude supplies fell by 1.1M barrels last week. That was less than the 2.5M-barrel decline expected, but came as a relief after the American Petroleum Institute on Tues had reported a 4.7M-barrel climb. Today, however, China revealed a list of import tariff exemptions for 6 chemical & oil products from the US.
Gold futures marked their highest settlement in more than 2 weeks in the wake of Pres Trump's impeachment by the House of Representatives. The yellow metal also found support with benchmark bond yields pulling back from a 4-month high as traders awaited details on the US-China trade pact. The Dem controlled House impeached Trump yesterday on charges of abuse of power & obstruction, but the Senate is widely expected to acquit the pres. Gold for Feb delivery climbed by $5.70 (0.4%) to settle at $1484 an ounce. That was the highest finish for a most-active contract since Dec 3.
Gold ends at a more than 2-week high after Trump’s impeachment
Investors were encouraged by good word on trade deals & favorable economic data. The Dow is up a staggering 5K this year with a lot of new record highs (not sure how many, it's hard to keep track). The bulls want to see a Santa Claus rally & add to those gains.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
The Senate passed the first of 2 spending bills it plans to approve to prevent a gov shutdown. The first measure covers 8 appropriations bills & passed by a 71-23 margin. The 2nd piece include the other 4. The House has already cleared both pieces of legislation. The pres needs to sign the bills by tomorrow to keep federal depts running. Trump’s advisors have said he will approve the measures to fund the gov thru Sep 30. The $1.4T appropriations package boosts spending for both the military & domestic programs. It also scraps key taxes to fund the Affordable Care Act & raises the tobacco buying age to 21. Congress appears poised to avoid another shutdown after lawmakers avoided a major dispute with the pres over funding for barriers at the US-Mexico border. The package includes nearly $1.4B for border fencing, the same level as last year, which caused a group of House Dems to oppose it. Some Reps also voted against the funding legislation, criticizing the increase in spending & a rushed approval process. Earlier this year, Congress approved a 2-year deal to suspend the federal debt ceiling & set budget levels. It took months, & 2 short-term spending bills, for lawmakers to agree on where to actually send the money. Dems have pointed to what they call several priorities included in the sprawling spending package. It puts $25M toward federal gun violence research, funding the effort for the first time in 20 years. The legislation also sets aside $425M for election security grants. Trump & Rep allies have cheered the $22B increase in defense spending & 3.1% raise for military service members included in the spending plans. The bills, which would repeal a variety of health care-related levies including the “Cadillac” tax on high-cost plans, could add $500B to federal debt over a decade, according to the Committee for a Responsible Federal Budget.
Senate passes first of two spending bills to avoid government shutdown, with second vote ahead
The number of homes for sale at the end of
Nov was the lowest on record for the month, according to the
National Association of Realtors (NAR), which began tracking this metric in
1999. There were just 1.66M homes on the market, down 5.7%
compared with Nov 2018. That represents a 3.7-month supply at the
current sales pace, down from a 4-month supply a year ago. Supply
is leanest on the low end, where demand is strongest. For homes priced
below $100K, inventory was down 15% annually. For those priced
between $100-250K, supplies were 7% lower annually. Supply
is only growing on the high end of the market, where demand is weakest. The
housing shortage has reignited home prices, which had been cooling last
year & into the first months of this year. The median price for an
existing home sold in Nov was $271K, the highest Nov price
reading since the Realtors began tracking in 1999. “The
expectation is that prices are going to continue increasing, especially
at the lower price points,” said Jessica Lautz, VP of
demographics and behavioral insights at the NAR. “At the very high end
there is supply, but there are not many buyers at the very high end of
market.” Demand is surging, despite rising prices. It is being
fueled by a stronger job market & falling mortgage rates. The average
rate on the 30-year fixed mortgage is now a full percentage point lower
than it was at this time last year. Buyer traffic rose significantly in
Nov, compared with annual numbers, according to the Realtors Buyer
Traffic Index. First-time buyers are out in force, but they made up just
32% of sales, down from the historical norm of around 40%. The
nation’s homebuilders have been buoyed by this shortage on the existing
home side. Builder confidence hit a 20-year high in Dec, &
housing starts & building permits are slowly improving on the
single-family side. “New
home inventories, while still a bit below historical averages, are not
close to their lows,” said David Berson, chief economist at Nationwide. “It’s likely that some demand that normally would have gone to the
existing home market has shifted to the new home market, given the
relatively smaller supply constraints for new homes.” Builders are
trying to pivot to the more affordable end of the market, but are not
quite there yet. They are still constrained by high costs for land,
labor & regulatory compliance. The bulk of new construction is still
in the move-up market.
Housing supply hits record low, igniting prices
One of the Federal Reserve's strongest advocates of lowering interest rates in 2019 is content to keep them steady for now. “I
penciled in no rate increases for 2020,” Federal Reserve Bank of St.
Louis Pres James Bullard said. “That’s appropriate in this environment. We made a fairly big
adjustment to policy during 2019. Now, we should wait and see what the
effects are in 2020 and see how the data come in, in the coming year.”
Fed's Bullard Sees No Reason Now to Change Rates in 2020
The US economy may have stabilized just before the year-end holiday season after a late-summer swoon. The Leading Economic Index (LEI) was unchanged in Nov, breaking a string of 3 straight declines, the Conference Board said. Big stock-market gains, improved consumer confidence & stronger home sales reflected a firming up in economy last month. These factors offset some weakness in labor markets & manufacturing. The LEI is a weighted gauge of 10 indicators designed to signal business-cycle peaks and valleys. The US economy has slowed to a modest pace of growth, but talk of recession has faded. A series of interest-rate cuts by the Federal Reserve & the Trump administration's agreement with China to ratchet down trade policy tensions has bolstered consumer confidence & driven the stock market to fresh records. Economists predict more of the same for early 2020.
U.S. economy stabilizes ahead of holiday season, leading indicator shows
Oil futures ended higher & logged their highest settlement since mid-Sep, with global benchmark prices stretching their gains to a 6th consecutive session. Oil's climb came a day after data showed a weekly decline in US crude inventories. West Texas Intermediate crude for Jan delivery rose 29¢ (0.5%) to finish at $61.22 a barrel. The contract expired at the end of the session. Feb WTI crude, the new front-month contract, rose by 33¢ (0.5%) to settle at $61.18. Feb Brent crude added 37¢ (0.6%) to settle at $66.54 a barrel. That stretched its streak of gains to a 6th consecutive session, the longest winning streak since Jan when the market rose for 10 straight sessions. Yesterday oil on bounced back from early losses after the Energy Information Administration on reported that US crude supplies fell by 1.1M barrels last week. That was less than the 2.5M-barrel decline expected, but came as a relief after the American Petroleum Institute on Tues had reported a 4.7M-barrel climb. Today, however, China revealed a list of import tariff exemptions for 6 chemical & oil products from the US.
U.S. oil prices settle at a 3-month high; Brent gains a 6th straight session
Gold futures marked their highest settlement in more than 2 weeks in the wake of Pres Trump's impeachment by the House of Representatives. The yellow metal also found support with benchmark bond yields pulling back from a 4-month high as traders awaited details on the US-China trade pact. The Dem controlled House impeached Trump yesterday on charges of abuse of power & obstruction, but the Senate is widely expected to acquit the pres. Gold for Feb delivery climbed by $5.70 (0.4%) to settle at $1484 an ounce. That was the highest finish for a most-active contract since Dec 3.
Gold ends at a more than 2-week high after Trump’s impeachment
Investors were encouraged by good word on trade deals & favorable economic data. The Dow is up a staggering 5K this year with a lot of new record highs (not sure how many, it's hard to keep track). The bulls want to see a Santa Claus rally & add to those gains.
Dow Jones Industrials
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