Dow was off 2, advancers over decliners about 3-1 & NAZ advanced 125. The MLP index was off 1 to the 247s & the REIT index rebounded 2+ to 341. Junk bond funds were mixed & Treasuries had significant buying, reducing yields. Oil pulled back 1, going under 91, & gold slid 1 to 1877, following recent weakness.
AMJ (Alerian MLP Index tracking fund)
The House of Representatives passed multiple appropriations bills to fund the State Dept, the Dept of Defense & the Dept of Homeland Security than fiscal year 2024 as lawmakers work to avert a gov shutdown. The bill to fund the State Dept & foreign operations passed by a 216-212 vote. Only 2 Reps voted against the measure. Provisions in the annual spending bill to provide $300M to Ukraine as its war against Russia continues faced opposition from some Rep House members. House Speaker Kevin McCarth removed the Ukraine funding from the Defense spending bill to gain more support from the members of his party who take issue with additional funding for the eastern European nation. The Pentagon bill without the aid for Ukraine aid passed the House 218-210, with Rep Reps. Tim Burchett of Tennessee & Ken Buck of Colorado voting against the legislation while Democrat Reps Jared Golden of Maine & Marie Gluesenkamp Perez of Washington joining the rest of the Reps to pass the measure. A separate bill to provide the $300M in aid to Ukraine passed in a 311-117 vote, with more than 100 Reps joining House Dems to advance the legislation. The Homeland Security legislation passed 220-208 & includes more than $2B for the construction of a wall at the Southern Border amid an influx of migrants attempting to enter the US thru Mexico. Golden & Gluesenkamp Perez were again the only Dems joining Reps to pass the bill. The House passing the bills marks the first time since Jul that the House has sent appropriations measures to the Senate, but the passage of the legislation will not prevent the gov shutdown as the deadline to fund the gov is just days away.
House passes bills to fund federal agencies as shutdown looms
The average rate on the benchmark 30-year fixed mortgage surged again this week, hitting the highest level in nearly 23 years. Freddie Mac's latest Primary Mortgage Market Survey shows that the average rate for a 30-year fixed note climbed to 7.31%, up from 7.19% last week & from 6.7% a year ago. The rate on a 15-year mortgage also rose, averaging 6.72% after coming in last week at 6.54%. One year ago, the rate on a 15-year fixed note averaged 5.96%. "The 30-year fixed-rate mortgage has hit the highest level since the year 2000," said Sam Khater, Freddie Mac's chief economist. "However, unlike the turn of the millennium, house prices today are rising alongside mortgage rates, primarily due to low inventory. These headwinds are causing both buyers and sellers to hold out for better circumstances." Indeed, the latest data from the National Association of Realtors found that pending home sales tumbled 7.1% in the US last month, indicating that high housing costs are causing more consumers to balk at making a deal. Would-be buyers are increasingly being priced out of the market or getting sticker shock, with the median monthly mortgage payment recently hitting an all-time high of $2632. Meanwhile, would-be sellers locked in at much lower mortgage rates are staying put, contributing further to the ongoing inventory shortage that has been driving up home prices ever since the pandemic began.
Mortgage rates climb further, near 23-year high
An inflation measure closely watched by the Federal Reserve ticked higher in Aug as steep prices continue to squeeze Ms of US households. The personal consumption expenditures (PCE) index showed that consumer prices rose 0.4% from the previous month, according to the Labor Dept. On an annual basis, prices climbed 3.5% – up from 3.3% recorded the previous month, underscoring the challenge of taming high inflation. The figures were both in line with estimates. In a sign the Fed's fight against inflation is making progress, core prices, which strip out the more volatile measurements of food & energy, climbed 0.1% from the previous month & 3.9% from the previous year. It marked the best reading for core inflation since 2021. While the Fed is targeting the PCE headline figure as it tries to wrestle consumer prices back to 2%, Chair Jerome Powell previously said that core data is actually a better indicator of inflation. Still, both the core & headline numbers point to inflation that continues to run above the Fed's preferred 2% target. Other figures included in the report showed that consumer spending rose just 0.4% in Aug, compared to a 0.9% increase in Jul. Many economists anticipate that spending will slow in the coming months as consumers continue to grapple with expensive goods, high interest rates & the resumption of federal student loan payments.
Key Fed inflation gauge accelerated again in August as high prices persist
The stock market continues to struggle, unable to find enough buyers to end its recent decline. In the near term, Congress needs to pass funding by tomorrow to run the gov. Sen Feinstein just passed away, narrowing the the Dem's majority in the Senate. There continues to be a lot of uncertainty for investors to digest.
Dow Jones Industrials
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