Dow gained 310 after last week's decline. advancers over decliners 2-1 & NAZ was off 23. The MLP index added 1+ to 236 & the REIT index went up 3+ to the 373s. Junk bond funds fluctuated & Treasuries were sold, bringing higher yields (more below). Oil pulled back 1+ to the 81s & gold dropped 8 to 1968.
AMJ (Alerian MLP Index tracking fund)
Treasury yields advanced modestly as investors weighed the state of the economy & awaited key inflation data due later in the week. The yield on the 10-year Treasury was trading less than 1 basis points higher at 4.066%. It had tumbled by 15 basis points on Fri after hitting a high of 4.206%, which was a level last seen in early Nov. The 2-year Treasury yield was also up by nearly 1 basis point at 4.8%. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Treasury yields recovered some of Fri's tumbles as investors digested the latest jobs report & looked ahead to upcoming inflation figures due this week. Today, Federal Reserve Governor Michelle Bowman she expects to need more interest rate increases to adequately tame inflation. “I will be looking for evidence that inflation is on a consistent and meaningful downward path as I consider whether further increases in the federal funds rate will be needed, and how long the federal funds rate will need to remain at a sufficiently restrictive level,” Bowman said. Jul's jobs report, published Fri, showed that nonfarm payrolls increased by 187K during the month, below the 200K forecast. Average hourly earnings climbed 0.4% on a monthly & 4.4% on an annual basis, which was slightly above the previously estimated 0.3% & 4.2%. The data suggested that despite some signs of easing, the labor market continues to be resilient even after a series of interest rate hikes from the Federal Reserve.
Treasury yields rise slightly as investors consider inflation outlook
During the 4-week period ending Jul 30, the monthly mortgage payment for the typical US homebuyer sat at $2605, 19% higher than the same period a year earlier, according to Redfin. It's also down $32 from the all-time high in early Jul. The average rate on the 30-year fixed mortgage rose to 6.9% this week, up from a week ago Meanwhile, home sale prices, even with lackluster demand, are up about 3.2% annually. This is the biggest increase since Nov. Prices are still rising because of the imbalance between supply & demand. The high borrowing rates have pushed a number of sellers out of the market, which is limiting the number of available homes. The average rate on the 30-year fixed mortgage rose to 6.9% this week, up from a week ago when it averaged 6.81%, according to mortgage buyer Freddie Mac. A year ago at this time, the benchmark home loan averaged 4.99% & currently remains almost double what it was 2 years ago.. Meanwhile, home sale prices, even with lackluster demand, are up about 3.2% annually. This is the biggest increase since Nov, according to Redfin. Prices are still rising because of the imbalance between supply & demand. The high borrowing rates have pushed a number of sellers out of the market, which is limiting the number of available homes. New listings dropped 21%. In total, the number of homes on the market plummeted by 19%, the biggest drop since Feb 2022. The high rates are also keeping buyers out of the market, albeit not as much as sellers.
Monthly costs for homebuyers rise nearly 20%
Berkshire’s Class A
(BRK.A) rallied to a record high following a strong quarterly report
that showed a rebound in insurance operations as well as a massive cash
hoard that swelled to nearly $150B. BRK.A
shares climbed 2.7% to hit an all-time high of $547,907, exceeding the previous high from Mar
2022. Operating earnings jumped 6.6% year over year, totaling $10.04B last qtr. Insurance underwriting earnings recorded a 74% increase to $1.25B, benefiting from higher interest rates and& lower catastrophe
losses. The solid performance in insurance helped offset the softness in
railroad due to lower volumes. Meanwhile, its massive
cash pile grew to $147B at the end of Jun, near a record &
much higher than the $130B in Q1. Elevated
interest rates are now enabling BRK.A to earn a hefty return from
its cash. The conglomerate held more than $97B in short term
Treasury bills. Buffett previously revealed that he's been buying $10B worth of 3-month or 6-month T-bills every Mon. “Berkshire
Hathaway’s resilient earnings illustrated the value of its diversified
business mix as it added to its cash hoard,” said Bill Stone, chief
investment officer at Glenview Trust & a BKK.A shareholder. BRK.A
also reported a near $26B unrealized gain from its investments, & much of this gain came from its gigantic stake in Apple (AAPL), a Dow & NAZ stock. The tech giant fueled the market rally in Q2, climbing
nearly 18%. Its investment in AAPL has ballooned to $177B. BRK.A stock rose $16,600 to $549,373.
If you would like to learn more about BRK.A, click on this link:
club.ino.com/trend/analysis/stock/BRK.A_aid=CD3289&a_bid=6aeoso5b6f7
Berkshire shares hit record high as investors cheer strong earnings, Buffett’s near-record cash pile
Dow Jones Industrials
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