Dow gained 127, advancers over decliners 3-2 & NAZ went up 176. The MLP index was off 2+ to the 337s & the REIT index recovered 4 to the 330. Junk bond funds were mixed & Treasuries saw buying which reduced yields. Oil tumbled 4+ to the 84s & gold fell 7 to 1933 (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)
General Motors (GM) secured a new $6B line of credit as the automaker braces for additional strikes by the United Auto Workers (UAW) union. “The
facility that we announced today is a $6 billion line of credit that I
think is prudent in light of some of the messages that we’ve seen from
some of the UAW leadership that they intend to drag this on for months,”
CFO Paul Jacobson said. The targeted strikes have already cost the automaker $200M during the 3rd qtr, GM said. A GM spokesman said the $200M strike cost is due to lost production on wholesale volume, largely due to the UAW's initial Sep 15 strike at GM's midsize truck & full-size van plant in Wentzville, Missouri. The strike has since expanded to GM's parts & distribution facilities nationwide & a crossover plant in mid-Michigan. As
a result of the strike in Missouri, GM also idled its Fairfax Assembly
Plant in Kansas, where it builds the Cadillac XT4 SUV & the Chevrolet
Malibu sedan, & laid off nearly 2000 workers. GM CEO Mary Barra publicly criticized
UAW Pres Shawn Fain & the union's strike strategy, claiming Fain
is not actually interested in reaching deals for 146K workers with
GM, Ford (STLA) & Chrysler-parent Stellantis (STLA). “It’s clear that there is no real intent to get to an agreement,” Barra said in an emailed Fri. “It is clear Shawn Fain wants to make history for himself, but
it can’t be to the detriment of our represented team members and the
industry.” The stock fell 36¢.
If you would like to learn more about GM, click on this link:
club.ino.com/trend/analysis/stock/GM _aid=CD3289&a_bid=6aeoso5b6f7
GM secures new $6 billion credit line as UAW strike costs reach $200 million
Mortgage rates just continue to climb higher, taking a particularly big leap last week. As a result, total mortgage demand fell 6% compared with the previous week, according to the Mortgage Bankers Association's (MBA) seasonally adjusted index. The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726K or less) increased to 7.53% from 7.41%, with points rising to 0.80 from 0.71 (including the origination fee) for loans with a 20% down payment. That rate was 6.75% the same week one year ago. “Mortgage rates continued to move higher last week as markets digested the recent upswing in Treasury yields,” said Joel Kan, MBA's VP & deputy chief economist. “As a result, mortgage applications ground to a halt, dropping to the lowest level since 1996.” Applications to refinance a home loan dropped 7% for the week & were 11% lower than the same week one year ago. Refinances now make up less than 1/3 of all mortgage applications. Just 2 years ago, when rates were setting multiple record lows, refinance demand made up roughly ¼ of all mortgage applications. Applications for a mortgage to purchase a home fell 6% for the week & were 22% lower than the same week one year ago. “The purchase market slowed to the lowest level of activity since 1995, as the rapid rise in rates pushed an increasing number of potential homebuyers out of the market,” said Kan, who also noted that adjustable-rate mortgage (ARM) applications increased. The ARMs made up 8% of purchase applications, up from 6.7% about a month ago, when interest rates were slightly lower. ARM's offer lower rates but are fixed for a shorter term, usually 5 or 10 years. A separate, daily survey on mortgage rates from Mortgage News Daily showed the average rate on the 30-year fixed rising even higher this week, hitting 7.72%. Investors are responding to better-than-expected economic data, which could push the Federal Reserve to be more aggressive in its higher interest rate policy. Housing prices are growing more unaffordable even with the astronomical rise in mortgage rates, putting ownership out of reach for Ms of Americans. The number of available homes on the market at the end of Jul was down by more than 9% from the same time last year & down a stunning 46% from the typical amount before the COVID-19 pandemic began in early 2020, according to a recent report from Realtor.com. The housing shortage has only served to boost consumer demand, which is keeping prices uncomfortably high. The National Association of Realtors reported that the national median existing-home price was $407K at the end of Aug, up 3.9% from the same time one year ago.
Homes are now unaffordable in 99% of the US for average Americans
Moderna (MRNA) said its combination vaccine
targeting Covid & the flu will move to a final stage trial in adults
ages 50 & above this year after showing positive results in an early
to mid-stage study. The biotech company hopes its shot, mRNA-1083, can win approval from regulators in 2025. Moderna & other vaccine makers believe combination vaccines will simplify what people can do to
protect themselves against respiratory viruses that typically surge
around the same time of the year. “Combination vaccines offer an
important opportunity to improve consumer and provider experience,
increase compliance with public health recommendations, and deliver
value for healthcare systems,” CEO Stéphane Bancel said. “We are excited to move combination respiratory
vaccines into Phase 3 development and look forward to partnering with
public health officials to address the significant seasonal threat posed
to people by these viruses,” he added. The stock rose 1.18.
If you would like to learn more about MRNA, click on this link:
club.ino.com/trend/analysis/stock/MRNA _aid=CD3289&a_bid=6aeoso5b6f7
Moderna combination Covid, flu vaccine enters final trial after positive data
Gold was unable to hold early gains, falling for 8 sessions even as the $ fell off an 11-month high & treasury yields eased. Gold for Dec closed down $6 to $1834 per ounce, The drop comes even as the headwinds that pushed the price of the precious metal to the lowest since Mar eased, with the $ & yields retreating despite a report showing the US private sector added just 89K last month, under expectations for a rise of 150K. Gold continues to slide lower, falling for 8 straight sessions in the most brutal selloff over the past year. The ICE dollar index was last seen down 0.18 points from an 11-month high to 106.82, making gold more affordable for intl buyers. Treasury yields also eased, bullish for gold since it offers no interest. The US 2-year note was last seen paying 5.109%, down 7.5 basis points, while the yield on the 10-year note was down 5.1 basis points to 4.753%.
Gold Closes Lower for an Eighth-Straight Session Even as the Dollar and Yields Retreat
Oil futures fell sharply, with US prices settling at their lowest since the end of Aug. The current state of the oil market is that global economic pain is coming courtesy of surging bond yields. Crude demand destruction will occur this qtr, but this pullback in prices will be limited given the risks of further shocks to supplies & a reacceleration of the US economy. Nov West Texas Intermediate crude lost $5.01 (5.6%) to settle at $84.22 a barrel, the lowest front-month finish since Aug 31
U.S. oil futures mark lowest settlement since the end of August
Today's rally was stimulated by bargain hunting after the selling in recent weeks. All the dark clouds hanging over the stock market are keeping many potential buyers on the sidelines.Dow Jones Industrials
