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Monday, April 18, 2016
Markets crawl higher after Doha oil meeting
Dow rose 38, advancers sllightly ahead of decliners & NAZ gained 4. The MLP index lost 3+ to the 268s & the REIT index was fractionally lower in the 339s. Junk bond funds were mixed & Treasuries traded lower. Oil pulled back to the 39s as the Doha oil meeting was a failure & gold inched higher.
Oil fell after output talks between producers ended without any
agreement on limiting supplies, a diplomatic failure that threatens to
renew the rout in prices. The summit finished with no
final accord. There were significant hurdles to any deal after Saudi
Arabia's Deputy Crown Prince Mohammed bin Salman said the kingdom
wouldn't restrain its production without commitments from other major
producers including Iran, which has ruled out freezing for now. A strike
that reduced Kuwait's output by 60% entered a 2nd day.
Oil
ministers from 16 nations, representing about ½ the world's output,
gathered in a bid to stabilize the global market, the first
significant attempt at coordinating oil output between the OPEC & nations outside the group in 15
years. Discussions stumbled after Saudi Arabia & other Gulf nations
wouldn't agree to any deal unless all OPEC members joined including
Iran, which wasn't present at the meeting, Russian Energy Minister
Alexander Novak said.
Confidence among US homebuilders was little changed in Apr,
indicating the housing market lacked momentum as the spring selling
season got under way. The National Association of Home
Builders/Wells Fargo builder sentiment gauge held at 58,
where its been since Feb. Readings greater than 50 mean more respondents report
good market conditions. Better buyer traffic & growing optimism
about the outlook for the next 6 months made up for a drop in current
sales of single-family homes, underscoring that
demand is lackluster even as hiring strengthens & borrowing costs remain low. Faster growth in wages & a higher supply of homes within
the reach of more Americans would go far in ushering a stronger rebound
in residential real estate. “The
single-family housing sector continues to recover at a slow but
consistent pace,” the NAHB said. “As we enter the spring home
buying season, we should see the market move forward.” The
forecast called for 59. The index reached a 10-year high of 65 in Oct. The group’s
gauge of prospective buyer traffic climbed to 44 from 43 the prior
month, while the index of current sales of single-family home decreased
to 63 from 65. The measure of the 6-month sales outlook improved to 62 from 61. “Builders
remain cautiously optimistic about construction growth in 2016,” the NAHB said. “Solid job creation
and low mortgage interest rates will sustain continued gains in the
single-family housing market in the months ahead.”
China's home-price gains accelerated last month as
economic hubs such as Beijing, Shanghai & Shenzhen continued to lead
the way amid surging liquidity that underpinned demand. New-home
prices excluding gov-subsidized housing climbed in 62 cities,
compared with 47 in Feb, among the 70 cities tracked by the
gov. They dropped
in 8 cities, compared with 15 a month earlier. The gov moved away from a one-size-fits-all property stimulus last month to allow more tailored approaches at the local level, after loosening measures sparked frenzied buying in top hubs. With no more stimulus from the central gov to boost
smaller markets, & local authorities moving in to take the steam out
of overheating markets such as Shanghai & Shenzhen, the recovery’s
sustainability is coming into question. Out of the 62 cities with price
gains last month, 55 had faster increases than in Feb. The average new-home price rose 0.85% in
Mar, up from 0.38% in the previous month.
“Although
the vast majority of cities saw price gains month on month, the
difference in the gains remains relatively large across cities,” the
statistics bureau said. The
fastest price increases were mainly in first- & some 2nd-tier
places, with the less economically significant 3rd-tier ones remaining
“relatively stable.”
As predicted, the big oil meeting in Doha went nowhere fast. This group of countries with different agendas can not agree on anything. Iran is the biggest stumbling block as it ramps up production. Earnings will be the center of attention this week. Dow hangs in there, not too far below the record levels it set last year.
...1.74 
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