Dow slid back 16, advancers slightly ahead of decliners & NAZ fell 40. The MLP index was off fractionally to the 174s & the REIT index remained in the 428s. Junk bond funds fluctuated & Treasuries were sold. Oil rose above 62 & gold was even at 1770.
AMJ (Alerian MLP index tracking fund)
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The Federal Reserve will remain on hold for the rest of this year despite an increasing belief that policymakers should throttle back the stimulus they're providing to the US economy, according to the latest CNBC Fed Survey. Respondents to the survey forecast the Fed won't reduce its $120B of asset purchases until Jan, 3 months later than predicted in the Mar survey. And the first rate hike won't come until Dec 2022, survey respondents said. Yet 68% of the 34 respondents say the Fed does not need to make those asset purchases to help the market function & 65% say the Fed doesn't need to do them to help the economy. More than ½ — 56% — say the Fed should respond to the massive fiscal stimulus from the Biden administration by cutting back asset purchases & raising rates sooner.
What investors should expect to hear from the Federal Reserve on WednesdayHome price gains continue to outpace expectations, as tight supply & strong demand lead to bidding wars. Nationally, prices in Feb rose 12% year over year, up from 11.2% in Jan, according to the S&P CoreLogic Case-Shiller home price index. The 10-city composite rose 11.7% annually, up from 10.9% in Jan. The 20-city composite gained 11.9%, up from 11.1% in the previous month. All the gains were in the double digits, except Chicago & Las Vegas. “The National Composite’s 12% gain is the highest recorded since February 2006, exactly 15 years ago, and lies comfortably in the top decile of historical performance,” said Craig Lazzara, managing director & global head of index investment strategy at S&P DJI. Feb price gains in every city are above that city’s median level, & rank in the top quartile of all reports in 18 cities. Prices rose decisively despite the fact that mortgage rates also moved sharply higher during the month. The average rate on the popular 30-year fixed mortgage started Feb at 2.79% & ended the month at 3.27%, according to Mortgage News Daily. Strong demand & record-low supply are pushing prices higher. More than ½ of the homes that went under contract during the month experienced bidding wars. Homes are also now selling in about ½ the time they did just a year ago, according to the National Association of Realtors.
February home prices see the biggest gain in 15 years, S&P Case-Shiller says
Consumer confidence leaped again in Apr to a 14-month high as rising vaccinations, falling coronavirus cases & a hiring surge eased pandemic-related anxieties. The index of consumer confidence climbed to 121.7 this month from revised 109 in the prior month, the Conference Board said. That's the highest level since Feb 2020. The forecast called for a 113 reading for Apr. Confidence still hasn’t returned to pre-pandemic levels, however. The index stood close to a 20-year high of 132.6 shortly before the crisis began. Part of the survey that tracks how consumers feel about the economy right now surged to a 13-month peak of 139.6 in Apr from 110.1 in the prior month. “Consumers were more upbeat about their income prospects, perhaps due to the improving job market and the recent round of stimulus checks,” said Lynn Franco, senior director of economic indicators at the nonprofit board. Another gauge that assesses how Americans view the next 6 months —the future expectations index — only rose slightly to 109.8 from 108.3. That's still the highest level in almost 2 years, though. The economy has regained momentum this year largely due to the increasing number of people being vaccinated. That's allowed states to ease restrictions, encouraged businesses to create more jobs & given Americans more confidence to resume somewhat normal lives. What also helped was another massive dose of federal stimulus last month that raised unemployment benefits & included $1400 checks for most Americans. If coronavirus cases keep falling, US growth is expected to accelerate even faster thru the summer months & beyond.
This has been a quiet day for traders. Not much going on. The Fed begins its big meeting & will give a report tomorrow. The consumer confidence was helpful but is not getting a lot of attention.
Dow Jones Industrials
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