Markets advance and hover near or at record levels

Dow jumped 190 (near session highs), decliners over advancers 2-1 & NAZ gained 46 to another record.  The MLP index fell 1+ to the 128s & the REIT index was fractionally lower in the 354s.  Junk bond funds continued lower & Treasuries were steady.  Oil slid lower in the 42s & gold  was off pennies at 1945 (more on both below).

AMJ (Alerian MLP Index tracking fund)

Free Apple Analysis!

Bring Your Portfolio Into The 21st Century

Four Days, Four Trades, +40% Average Returns
Learn to trade options with MarketClub!

Deere (DE)  the world's largest farm equipment maker, lifted its full-year earnings forecast after a smaller-than-expected decline in quarterly profit, as the sector benefits from replacement demand & gov stimulus.  The company now expects net income of about $2.25B for the full year, higher than $1.6-$2B estimated earlier.  EPS for the latest qtr came in at $2.57 -- an 8.5% year-on-year decline compared with a 55% drop expected.  Equipment sales fell 12.4% year-on-year to $7.9B, lower than the estimate for a 25.3% decrease.  “Although unsettled market conditions and related customer uncertainty are expected to have a moderating effect on key markets in the near term, we believe Deere is well-positioned to help make our customers more profitable and sustainable,” CEO Executive John May said.  The stock jumped 8.39 (4%).
If you would like to learn more about DE, click on this link:
club.ino.com/trend/analysis/stock/DE?a_aid=CD3289&a_bid=6ae5b6f7

Deere hikes earnings forecast as farm equipment sales weather coronavirus swoon

Although they are rising, mortgage rates continue to remain below 3%.  But a surge in home prices is threatening to make buying a home unaffordable once again for many Americans.  The 30-year fixed-rate mortgage averaged 2.99% last week, rising 3 basis points from the week prior, Freddie Mac reported.  It was the 2nd consecutive week in which rates increased.  Meanwhile, the 15-year fixed-rate mortgage jumped 8 basis points to an average of 2.46%.  The 5-year Treasury-indexed hybrid adjustable-rate mortgage rose by a single basis point to 2.91% on average.  A couple of factors drove mortgage rates higher.  “The rates advanced because the U.S. Treasury issued a large number of notes and investors are eyeing hopeful updates on COVID vaccine trials,” said George Ratiu, senior economist at Realtor.com.  Mortgage rates roughly track the direction of the yield on the 10-year Treasury note, which has remained at its highest level since early Jul in recent weeks.  But another factor contributing to the rise in interest rates was the surprise announcement last week that Fannie Mae & Freddie Mac were charging a new “adverse market” fee on mortgage refinances, a move that drew criticism from trade groups, consumer advocates & lawmakers on both sides of the aisle.  The rise in rates comes as competition among buyers in the housing market remains extremely elevated.  And that's pushing home prices even higher, given the short supply of homes.  Median home list prices were up 10.1% year-over-year for the week ending Aug 15.  It represents the fastest growth in listing prices since Jan 2018.

Mortgage rates are going back up — just as home prices begin to skyrocket 

Secretary of State Mike Pompeo asserted that the US would enforce sweeping sanctions on Iran, even though the UN Security Council voted to not extend an arms embargo on the rogue regime.  Pompeo reiterated that the Trump administration will continue its maximum pressure campaign in order to rein in Tehran's missile & nuclear weapons programs.  “I have not had a single world leader or one of my counterparts tell me that they think it makes any sense at all for the Iranians to be able to purchase and sell high-end weapons systems, which is what will happen on October 18th of this year, absent the actions that we took at the United Nations yesterday,” Pompeo said.  “We’re not going to let them have a nuclear weapon, we’re not going to let them have hundreds of billions of dollars in wealth from selling weapons systems. Every leader around the world knows it’s a bad idea,” he added, calling Iran “the world’s largest state sponsor of terror.”  The Trump administration has previously pushed members of the Security Council to extend a UN-imposed arms embargo on Iran.  The embargo is currently set to end in Oct under the 2015 nuclear deal brokered, in part, by the Obama administration.  Last week, the Security Council voted to not extend the intl arms embargo on Iran, a decision that prompted Secretary of State Mike Pompeo to formally notify the group yesterday of the US intention to “snap back” or restore all UN sanctions on Iran.  30 after Pompeo's notification, a range of UN sanctions will be restored, including the requirement that Iran suspends all enrichment-related activities.  The “snap back” will also extend the 13-year arms embargo on Iran.

U.S. prepared to enforce sweeping UN sanctions on Iran, Pompeo says

Gold futures eked out a tiny gain to halt a 3rd consecutive slide, but the precious metal's advance for the day wasn't sufficient to avoid the first back-to-back weekly declines since the COVID-19 pandemic began in Mar.  Experts say that a resurgence in the $ gave investors some pause in buying bullion because the commodity is priced in the currency & a stronger $ can make gold comparatively more expensive to overseas investors.  Dec picked up pennies to settle at $1947 an ounce, marking a weekly decline of a smidgen.  The decline marks gold's 2nd straight weekly decline since a similar stretch ended Mar 20.

Gold prices inch higher to halt skid, but mark first back-to-back weekly fall since March

Investors dismissed worries about yesterday's jobless claims report.  Instead they were impressed by today's report on home sales.  Meanwhile the stimulus bill is going nowhere & gold hardly budged after it declined from its record levels in Aug.  Today most of the excitement was in the bullish tone of the stock market even though more stocks declined than advanced.  This week the Dow was pretty much even but remains up 1500 in Aug & NAZ reached new record heights.

Dow Jones Industrials