Dow dropped 348 (above early lows), decliners over advancers about 5-1 & NAZ retreated 233. The MLP index fell 2+ to the 211s & the REIT index fell 1+ to the 369s. Junk bond funds drifted lower along with stocks & Treasuries had limited buying. Oil was a little lower in the 78s after a good week & gold pulled back 28 to 1796 (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 number of Americans filing new claims for unemployment benefits increased less than expected last week, pointing to a still-tight labor market, while the economy rebounded faster than previously estimated in Q3. Labor market strength, which also was underscored by some shrinking of unemployment rolls in early Dec after mostly expanding since Oct, raises the risk that the Federal Reserve could continue raising interest rates to a higher level & keep them there for a while as it tackles inflation. The central bank is trying to cool demand for everything from housing to labor to bring inflation back to its 2% target. Initial claims for state unemployment benefits rose 2K to a seasonally adjusted 216K, leaving the bulk of the prior week's decline intact, Labor Dept data showed. The forecast called for 222K claims for the latest week. Claims have swung up & down in recent weeks, but have remained below the 270K threshold, which would raise a red flag for the labor market. A raft of layoffs in the technology sector & interest-rate sensitive industries like housing have not had a material impact on claims so far. Unadjusted claims dropped 4K to 248K last week, amid big declines in California, Indiana, Ohio & Texas, which offset a large increase in Massachusetts.
U.S. weekly jobless claims rise slightly
The average long-term US mortgage rate declined for the 6th straight week, giving potential homebuyers some relief after rates topped out over 7% last month. The 30-year fixed-rate mortgage averaged 6.27%, down from 6.31% last week, according to mortgage buyer Freddie Mac. A year ago, the 30-year FRM averaged 3.05%. The 15-year fixed-rate mortgage averaged 5.69% up from last week when it averaged 5.54%. A year ago, the 15-year FRM averaged 2.30%. "Heading into the holidays, mortgage rates continued to move down," said Sam Khater, Freddie Mac's Chief Economist. "Rates have declined significantly over the past 6 weeks, which is helpful for potential homebuyers, but new data indicates homeowners are hesitant to list their homes." "Many of those homeowners are carefully weighing their options as more than 2/3 of current homeowners have a fixed mortgage rate of below four percent," Khater continued. The housing market slump deepened in Nov as sales of previously occupied US homes slowed for the 19th consecutive month — the longest such stretch on records going back to 1999. Existing home sales fell 7.7% last month from Oc to a seasonally adjusted annual rate of 4.09M, the National Association of Realtors reported. That’s a slower sales pace than what had been expected. The combination of higher mortgage rates & rising prices continue to keep many first-time buyers on the sidelines. They represented 28% of sales last month, unchanged from Oct. By historical standards, first-time buyers typically made up as much as 40% or more of transactions.
Mortgage rates continue downward trend, falling for sixth week
As Americans prepare to travel for the Holiday weekend, oil prices
in the US increased by more than $2 a barrel earlier this
week amid news that a snowstorm is expected to land in the coming days. Futures for Brent Crude Oil
grew by 2.8% to $82.20 a barrel as West Texas Intermediate crude
futures were up by 2.7% at $78.29 a barrel. Both
oil benchmarks saw prices increase by at least $2 a barrel. However,
the Energy Information Administration released data showing that
crude inventories fell by 5.9M barrels, while the American
Petroleum Institute showed that there was a 3.1M barrel draw for
last week. This report is very bullish, especially
with the fact that there's a draw from the crude oil.
US oil prices jump as Americans prep for big travel weekend
Gold prices tumbled, settling at levels under $1800 as the $ gained ground after a raft of strong US economic data
exacerbated concerns that the Federal Reserve would stick to its
aggressive tightening path. Gold prices for Feb fell $30 (1.7%) to settle at
$1795 per ounce, after recording solid gains earlier this
week.
Gold Settles Back Below $1,800 Level as Dollar Gains Ground After Solid GDP Update
Oil's 3-day rally came to a
halt as weather forecasts indicated that freezing
temperatures initially expected for the Christmas weekend might be
delayed, reducing the potential for a spike in heating oil demand. The
Global Forecast System, the weather forecasting model preferred for the
US & the ECMWF — the default version used for Europe —
are indicating moderating temperatures from the start of next week that
could linger into the first week of Jan. That is opposed to the
super cold temperatures the 2 models initially called for from this
Fri thru the year-end. A
better-than-expected 3.2% growth in US GDP
for Q3 -- versus forecasts for a 2.9% expansion -- also
brought rate hike concerns back to the market’s forefront. US
West Texas Intermediate (WTI) crude for delivery in Feb settled down 80 (1%) at $77.28 per barrel. Earlier, WTI, as it is known, hit an
intraday high of $79.88. For the week, the US crude benchmark was
still up about 4.5%, following thru with last week's 4.1% gain. In
the prior week, WTI fell 11%, falling to as low as $70.11, a bottom not
seen since Dec 21 2021.
Oil Rally Halts as X’mas Cold Delayed; Rate Hike Fears Back on Strong U.S. GDP
Interesting that the revision in US GDP for Q3 got a lot of attention in the commodity futures market vs hardly any attention in the stock market. Longer term, Dow has been going sideways for almost 2 months (see below). Hmmm!!
Dow Jones Industrials
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