Dow gained 163, decliners over advancers 3-2 & NAZ sank 294. The MLP index was up 1+ to the 237s & the REIT index fell 1 to the 381s. Junk bond funds remained out of favor & Treasuries had very heavy selling, sharply increasing yields. Oil crawled higher in the 75s & gold dropped 8 to 1962 (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)
Tesla (TSLA) tumbled after investors soured on initially positive results due to imprecise commentary from CEO Elon Musk & other execs on the company's latest vehicle, the Cybertruck & a planned robotaxi-ready car. Musk also cautioned that while the company would “continue to target
1.8 million vehicle deliveries this year,” TSLA also expected that “Q3
production will be a little bit down because we’ve got summer shutdowns”
for what the CEO described as “a lot of factory upgrades.” Analysts also highlighted concerns with TSLA's margin “headwinds,” which at 9.6% was the lowest result for at least the last 5 qtrs. Early this month, TSLA reported 466K
total vehicle deliveries for Q2, the closest
approximation of sales that TSLA reports. But Musk didn't offer precise
delivery volumes for the new Cybertruck, only sayingthat the Cybertruck would be produced “in high volume next
year,” with an unknown quantity being delivered in 2023. Cybertruck
“factory tooling” is on track but the company is only producing
“release candidate” builds, the company said. TSLA stock plunged 28.38 (10%).
If you would like to learn more about TSLA, click on this link:
club.ino.com/trend/analysis/stock/TSLA_aid=CD3289&a_bid=6aeoso5b6f7
Tesla shares down on slimming margins, Cybertruck concerns
US existing home sales continued to slide in Jun as a worsening supply shortage left limited options for would-be homebuyers. Sales of previously owned homes tumbled 3.3% in Jun from the previous month to an annual rate of 4.16M units, according to National Association of Realtors (NAR). On an annual basis, existing home sales are down 18.9% when compared with Jun 2022. "There are simply not enough homes for sale," said Lawrence Yun, chief economist at NAR. "The market can easily absorb a doubling of inventory." There were about 1.08M homes for sale at the end of Jun, unchanged from the previous month & down 13.6% from one year ago. Limited inventory has bolstered consumer demand: Homes sold on average in just 18 days last month, the same as in May. While that is down slightly from the 14 days recorded in Jun 2022, it marks a major increase from prior years. Before the COVID-19 pandemic, homes typically sat on the market for about a month before being sold. At the current pace of sales, it would take roughly 3.1 months to exhaust the inventory of existing homes. Experts view a pace of 6-7 months as a healthy level. "Affordability constraints and mortgage rate lock are keeping existing homeowners from listing their homes, and with the flow of listings coming onto the market down significantly from pre-pandemic norms, sales continue to take a hit," said Nicole Bachaud, senior economist at Zillow. The median price of an existing home sold in Jun was about $410K, the 2nd-highest price ever recorded since the NAR began tracking the data in 1999. It is down just 0.9% from the all-time high of $419K recorded one year ago. "Home sales fell, but home prices have held firm in most parts of the country," Yun said. "Limited supply is still leading to multiple-offer situations, with one-third of homes getting sold above the list price in the latest month."
Mortgage rates post biggest decline since March
US mortgage rates inched lower this week, backing off from an 8-month high as inflation showed welcome signs of cooling. Mortgage buyer Freddie Mac said that the average rate on the 30-year loan fell to 6.78% from 6.96% the previous week, the first decline since Jun & the biggest one-week drop since Mar. The rate remains well above the 5.54% recorded just one year ago & the pre-pandemic average of 3.9%. "As inflation slows, mortgage rates decreased this week," said Sam Khater, Freddie Mac's chief economist. "Still, the ongoing shortage of previously owned homes for sale has been a detriment to homebuyers looking to take advantage of declining rates. On the other hand, homebuilders have an edge in today’s market, and incoming data shows that homebuilder sentiment continues to rise." The average rate on a 15-year mortgage, which is more popular among homeowners who choose to refinance, dropped to 6.06%, down from last week's 6.3%. The Federal Reserve's aggressive interest-rate hike campaign sent mortgage rates soaring above 7% last year, quickly cooling the red-hot housing market. But rates have been slow to retreat from the nearly 2-decade high, forcing many would-be buyers out of the market. Even just a minor change in rates can affect how much would-be homebuyers pay each month. A recent study from LendingTree compared the average monthly payments on 30-year fixed-rate mortgages in Apr 2022, when the rate hovered around 3.79%, & 1 year later, when rates jumped to 5.25%. It found that higher rates cost borrowers hundreds more each month & potentially added as much as $75K over the lifetime of the 30-year loan. Despite higher interest rates, home prices have been slow to fall as would-be buyers face a worsening inventory shortage. That is largely because sellers who locked in a low mortgage rate before the pandemic began have been reluctant to sell with rates continuing to hover near a 2-decade-high, leaving few options for buyers.
Mortgage rates post biggest decline since March
Gold futures finished lower to pare an overall gain for the week so far. The $ & Treasury yields strengthened, pressuring prices for the precious metal, after US data showed a drop in weekly US jobless claims to their lowest in 2 months. Gold for Aug settled at $1970 an ounce, down $9 (0.5%). Week to date, prices have edged up by 0.3%.
Gold Futures Pare Week-To-Date Rise
Yesterday's declining stockpile data & weak demand stats didn't help
oil extend its recent rally. Today's US data painted a mixed picture for the economy as the labor
market still looks tight, while other parts of the economy remain weak. US crude futures finished slightly higher at $75.63 a barrel & are
up 0.3% for the week.
Oil Ends Slightly Higher in Muted Session
The auto & home sales are an important part of the US economy. High level of interest rates are hurting sales. Additionally macro economic data keeps coming in mixed. That is not part of a robust economy. The stock rally is very tired & needs a rest. It's also called a pause. Already Dow dropped about 150 in today's PM & NAZ continues to be weak.
Dow Jones Industrials
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