Markets bounce back as Treasury yields tumble

Dow jumped 547 (but selling into the close), advancers over decliners 7-1 & NAZ went up 222.  The MLP index shot up 9+ to the 203s & the REIT index climbed 7+ to the 364s.  Junk bond funds crawled higher after recent selling & Treasuries were very heavily purchased, driving down yields.  Oil recovered 3+ to 82 & gold gained 32 to 1668 (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!

Signed contracts to buy previously owned homes in the US plunged more than expected in Aug as rising mortgage rates & higher home prices continued to push entry-level homebuyers out of the market.  The National Association of Realtors (NAR) said that its pending home sales index tumbled 24% in Aug compared with the same month one year ago.  On a monthly basis, pending home sales dropped 2% — far more than the 1.5% decline projected.  "The direction of mortgage rates — upward or downward — is the prime mover for home buying, and decade-high rates have deeply cut into contract signings," said NAR Chief Economist Lawrence Yun.  "If mortgage rates moderate and the economy continues adding jobs, then home buying should also stabilize."  The once red-hot housing sector is in the midst of a severe correction as the Federal Reserve raises interest rates at the fastest pace in decades.  Mortgage rates have more than doubled to 6.29%, according to recent data from mortgage lender Freddie Mac & could continue to climb higher.  While home price growth has cooled over the past month, prices remain well above where they were just one year ago, putting affordability out of reach for many prospective buyers.  New home sales unexpectedly surged in Aug, with new single-family home purchases jumping nearly 29%.  However, economists largely think that surprise upside is an anomaly & merely represents an effort by buyers to lock in a lower mortgage rate as the average 30-year fixed rate average dipped closer to 5% from earlier highs.

Pending home sales tumble in August, falling for third straight month

Unite, the union representing dock workers at the Port of Liverpool currently engaged in a 2-week strike that ends Sun, will strike for a 2nd time from Oct 11-17 as they battle for wage gains to match record inflation in the UK.  Bobby Morton, national officer for Unite, said the union is resolute in its fight for a wage that matches the soaring inflation.  “We’ll never walk alone,” he added.  The Port of Liverpool announced the 2nd strike in an alert to customers after Unite rejected the offer of Peel Ports Group,  Britain's 2nd-biggest ports group, to increase the wages by 8.3%, in combination with a one-off payment of £750.  The shop stewards who represent union workers accepted Peel Ports request for a meeting at the union office yesterday.  David Huck, COO of Peel Ports, told the workers of the damage being done to the Port of Liverpool by the strike & asked the strikers to return to work for a few weeks in order to come to an agreement.  Union workers did not stop the strike & it is expected to continue until its scheduled end on Sun.  The time between the strikes will be used to try to find a solution.  The latest development comes amid mounting labor issues linked to inflation at UK ports, with workers at the nation's largest port, Felixstowe, beginning another strike this week after one in Aug.

New wave of UK port labor strikes to have ‘massive impact’ on Christmas business

People at risk for monkeypox who have not received a single dose of vaccine are 14 times more likely to get infected than those who have gotten a shot, according to the Centers for Disease Control & Prevention (CDC).  The preliminary data, collected from 32 states from the end of Jul thru early Sep, is the first concrete evidence that the Jynneos vaccine is providing at least some protection against infection from the monkeypox virus circulating in the current outbreak.  “These new data provide us with a level of cautious optimism that the vaccine is working as intended,” CDC Director Dr Rochelle Walensky said.  The data indicate that even a single dose of the vaccine provides some initial protection against infection as soon as 2 weeks after the shot, Walensky added.  The Jynneos vaccine, manufactured by the Danish company Bavarian Nordic, is administered in 2 doses 28 days apart.  Walensky said although the data on a single dose is promising, lab studies have demonstrated that the immune protection is highest 2 weeks after the 2nd dose.  “It is for that reason that we continue, even in light of these promising data, to strongly recommend people receive two does of Jynneos vaccine spaced out 28 days apart to ensure durable, lasting immune protection against monkeypox,” Walensky continued.

A single monkeypox shot provides some protection against infection, CDC says

Gold futures climbed to post their highest finish in nearly a week, supported by weakness in the $ & a drop in Treasury yields, as nervous traders boost haven buying of the metal ahead of the month's end.  Gold futures for Dec rose $33 (2.1%) to settle at $1670 per ounce after trading as low as $1622.  That was the highest most-active contract finish since Sep 22,  Gold prices climbed today on safe-haven buying amid a very nervous marketplace, as the calendar is set to turn to what can be a tumultuous month of Oct for stock & financial markets.  Gold currently trades higher for the week, but prices are still on track to post losses for the month, as well as the qtr.  Analysts have largely blamed rising bond yields & the rampaging & for diminishing gold's allure as a haven asset.  The ICE US Dollar Index a gauge of the $'s strength against a basket of rivals, was down 1.2% to 112.76.  The yield on the 10-year Treasury fell to 3.84% from 3.963% yesterday.

Gold prices post their highest finish in nearly a week

Oil futures rallied, with US prices settling above $80 a barrel for the first time in nearly a week as Hurricane Ian led to a slowdown in production in the Gulf of Mexico.  The Bureau of Safety & Environmental Enforcement reported that in response to the storm, 9.12% of oil production & 5.95% of natural-gas output in the Gulf has been shut in.  That was, however, lower than shut ins of 11% of Gulf oil output & 8.56% of natural-gas output yesterday.  Nov WTI crude rose $3.65 (4.7%) to settle at $82.15 barrel.  Oct nat-gas, which expired at the end of the session, rose 3.3% to settle at $6.868 per M British thermal units. 

U.S. oil futures settle back above $80 a barrel as Hurricane Ian disrupts Gulf output

Never a dull moment in the financial markets.  Volatile trading does not capture what was going on today.  Q3 ends on Fri & expectations are for a dismal reading.  Meanwhile the inflation readings are stuck in the mud at very high levels.  Trading tomorrow will need to have a major up day to show today's rally was meaningful.

Dow Jones Industrials