Sales of new homes slow in May

WASHINGTON — Sales of new U.S. homes slumped 7.8% in May, as sales plunged in the pricier Northeastern and Western markets.

The Commerce Department said Tuesday that new homes sold at a seasonally adjusted annual rate of 626,000 in May, down from 679,000 in April. During the first five months of the year, purchases of new homes have fallen 3.7% compared with the same period in 2018.

Lower mortgage rates and a healthy job market have yet to unleash more home-buying. Sales of new homes plummeted 35.9% in the West and 17.6% in the Northeast. New-home sales rose 4.9% in the South and 6.3% in the Midwest, which are generally more affordable markets.

The median sales price of a new home fell 2.7% from a year ago to $308,000.

The data add to housing indicators showing a mixed outlook in recent months.

Sales of existing homes — which are the bulk of the market — rebounded in May. They increased 2.5% to a seasonally adjusted annual rate of 5.34 million, evidence that lower mortgage rates might ultimately improve buying.

Sales of existing homes fell last year as mortgage rates climbed to 5%, but sales appear to have leveled off this spring. Borrowing costs have fallen back below 4%, which has enabled more would-be buyers to afford homes. Prices are now increasing more slowly than wages, which also helps affordability.

Still, sales of existing homes remained 1.1% lower than a year earlier.

The number of properties sold for which construction hadn’t yet started eased slightly to 195,000, indicating potential buyers still have ample supply in the pipeline. The number of new homes for sale at the end of the month was little changed at 333,000.

The supply of homes at the current sales rate increased to 6.4 months from 5.9 months

Read More Here...

European Shares Seen Lower As Hopes Fade For Fed Rate Cuts

European stocks look set to open a tad lower on Wednesday as investors cautiously await the upcoming G-20 summit this weekend.

The United States was not willing to come to the meeting with concessions, a senior administration official said on Tuesday. Washington wants Beijing to come back to the table with the promises it withdrew before talks broke down, he said.

No trade deal is expected at the meeting but the two sides may agree not to impose new tariffs as a goodwill gesture to get negotiations going.

Asian stocks slipped and the U.S. dollar pulled back from three-month lows
after Fed officials dampened market expectations of aggressive rate cuts.

Fed Reserve Chairman Jerome Powell pushed back against pressure from President Trump to cut interest rates, saying that monetary policy should not overreact to any individual data point or short-term swing in sentiment.

Separately, well-known Fed dove Bullard said that a 50 bps rate cut in July would be too much.

Trump said on Twitter that the U.S. central bank “raised rates far too fast” and “blew it” given low inflation and slowing global growth.

U.S.-Iran tensions also remain in focus, with Trump threatening to obliterate parts of Iran if it attacked “anything American.”

Oil prices climbed nearly 2 percent in Asian trading amid geopolitical tensions and as industry data showed U.S. crude stockpiles fell more than expected.

On the data front, consumer confidence figures from Germany are due later in the day. The forward-looking consumer confidence index is seen falling slightly to 10.0 in July from 10.1 in June.

France’s statistical office Insee publishes consumer confidence survey data. The index is expected to rise marginally to 100 in June from 99 in May.

U.S. stocks tumbled overnight as simmering trade concerns and disappointing housing and consumer confidence data dented sentiment.

Read More Here...

US Fed ‘grappling’ with need for rate cut, says Fed chief

US Federal Reserve Chairman Jerome Powell speaks during a news conference following the two-day Federal Open Market Committee (FOMC) policy meeting in Washington March 20, 2019. — Reuters pic

WASHINGTON, June 26 — America’s grinding trade wars are darkening the economic horizon and could help justify a decrease in interest rates, Federal Reserve Chairman Jerome Powell said yesterday.

Powell also insisted the central bank was “insulated” from political pressures despite President Donald Trump’s persistent criticism of the Fed chairman.

The speech in New York amplified the Fed’s recent message that policymakers are ready to step in to protect the world’s largest economy, which next week will mark its longest expansion on record but is showing increasing signs of strain.

Markets overwhelmingly expect the Fed to cut rates next month as Trump’s trade battles drag on and the global economy slows — both factors that have begun to dent business confidence and investment in the United States.

But Powell was careful to temper this message, warning that the central bank would not “overreact” to individual data points and short-term swings in sentiment that could quickly evaporate.

“The question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation,” Powell said in prepared remarks.

Wall Street reacted negatively to Powell’s remarks and to others yesterday from James Bullard, president of the Fed’s St Louis regional branch, who told Bloomberg a cut of 50 basis points would be excessive.

Trump has repeatedly — and publicly — demanded looser monetary policy, even though the Fed is meant to be above the political fray.

The Fed last week held steady on interest rates for the fourth time this year. And with US unemployment near historic lows and inflation forecast to rise

Read More Here...

Bursa Malaysia falls in early trade

An investor monitors share market prices in Kuala Lumpur October 11, 2018. — Picture by Ahmad Zamzahuri

KUALA LUMPUR, June 26 — Shares on Bursa Malaysia fell in early trade in line with regional and US stocks performance amid lack of catalysts on the local front.

At 9.10am, the key FTSE Bursa Malaysia KLCI (FBM KLCI) dropped 3.22 points to 1,673.39 from yesterday’s close of 1,676.61.

The index opened 2.38 points lower at 1,674.23. 

Losers beat gainers led losers 121 to 84 with 188 counters unchanged, 1,500 untraded and 23 suspended.

Turnover stood at 99.75 million worth RM46.22 million.

Malacca Securities Sdn Bhd said the FBM KLCI remained toppish.

“We continue to think that a pullback is overdue after the near 100 points gain over the past month.

“We maintain our view that the upsides were already overdone as there is little change to the corporate Malaysia’s fundamentals that also led to the valuation perching at the top end of its historical forward averages,” it said in a note today.

It said investors’ attention also shifted to the upcoming meeting between the US president Donald Trump and his Chinese counterpart Xi Jinping at the Group of 20 summit in Japan, to see if the two leaders could salvage any hope on their deadlocked trade negotiations.

Overall, the broader market is seeing reduced following, amid the lack of positive leads, despite continued institutions support on selected index-linked stocks.

Hence, it sees the FBM KLCI to further consolidate over the near term with immediate support at 1,670 -1,672 levels, while resistances are at 1,682 and 1,689 respectively.

The overnight S&P 500 was down by one per cent to 2,917.38 while Dow Jones dropped 0.7 per cent to 26,548.22 after Federal Reserve Chairman Jerome Hayden Powell warned of the increasing downside risks to the economy.

Among heavyweights, Maybank dropped one sen to RM8.92, Public Bank was eight sen lower at RM22.94, Tenaga went

Read More Here...

Wall Street sinks as hopes fade for rate cuts

Bullard last week said he had dissented at the Fed’s June policy meeting because he felt that weak inflation and uncertainties about the economic outlook supported a rate cut.

“Powell and Bullard both made comments that were indicative that we might not see any rate cut in July,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “After last week’s meeting, hopes for a rate cut took off and that might not be in the picture next month.

“Likewise, last week there was a higher level of hope that something positive will come out of the G20 meeting,” Tuz added. “As the date approaches that optimism is waning a little bit.”

Indeed, US-China trade war anxieties found no relief in a White House official’s remarks that Trump is “comfortable with any outcome” resulting from a planned meeting with Chinese President Xi Jinping at the Group of 20 summit convening in Japan on Friday.

On the economic front, new home sales and consumer confidence numbers both came in well below economist expectations, according to separate reports from the US Commerce Department and the Conference Board.

The Dow Jones Industrial Average fell 179.32 points, or 0.67 per cent, to 26,548.22; the S&P 500 lost 27.97 points, or 0.95 per cent, to 2,917.38; and the Nasdaq Composite dropped 120.98 points, or 1.51 per cent, to 7,884.72.

Loading

Of the 11 major indexes in the S&P 500, ten lost ground, with technology and communications services seeing the biggest percentage drops.

“Weakness in those stocks shows people getting out of the market, out of ETFs,” Tuz said.

Rate-sensitive bank stocks were down 0.6 per cent, as US Treasuries benchmark yields fell below the closely watched 2 per cent level.

AbbVie said it would buy Allergan for about $US63

Read More Here...

Asian markets mixed on lowered expectations for Fed rate cut, U.S.-China trade deal

Asian shares were mostly lower Wednesday as investors awaited developments on the trade friction between the U.S. and China at the Group of 20 meeting of major economies in Japan later in the week.

Japan’s Nikkei NIK, -0.66%   fell 0.6% while Hong Kong’s Hang Seng Index HSI, +0.08%   was about flat. The Shanghai Composite SHCOMP, -0.34%   dipped 0.2%, while the smaller-cap Shenzhen Composite 399106, -0.09%   gave up early gains. South Korea’s Kospi 180721, -0.16%   was flat and Taiwan’s Taiex Y9999, -0.51%    retreated 0.5%. The benchmark indexes in Singapore STI, -0.21%   was down 0.3% and Indonesia JAKIDX, +0.07%   was flat, as was Australia’s S&P/ASX 200 XJO, -0.13%  .

Among individual stocks, SoftBank 9984, -1.51%   fell in Tokyo trading, as did Fast Retailing 9983, -1.23%  and Honda Motor 7267, -0.35%  . In Hong Kong, Sunny Optical 2382, +2.16%   and meat processor WH Group 288, +0.51%   gained while property companies, such as Sun Hung Kai 16, -1.65%  , fell. SK Hynix 000660, +2.55%   surged in South Korea while Taiwan Semiconductor 2330, -1.68%   slipped in Taiwan. Rio Tinto RIO, +0.89%   rose slightly in Australia.

On Wall Street, discouraging economic data and cautionary remarks from the head of the Federal Reserve weighed on the market.

The sell-off marked the third straight loss for the market and the biggest drop this month for the Dow Jones Industrial Average and the S&P 500 index, which hit an all-time high only last week.

In an early afternoon speech, the Fed‘s Powell noted that the economic outlook has become cloudier since early May amid uncertainty over trade and global growth. Earlier Tuesday, reports showed a decline in consumer confidence and more weakness in the housing market.

The S&P 500 index SPX, -0.95%   fell 27.97

Read More Here...

Wall St sinks as hopes fade for rate cuts, trade progress

Wall Street stock indexes fell on Tuesday, led by a sharp sell-off in technology shares, as simmering trade concerns and disappointing economic data sent buyers to the sidelines, while the Federal Reserve chairman pushed back on pressure from US President Donald Trump to cut interest rates.

All three major US stock indexes ended the session in the red after Powell said the Fed was grappling with whether trade uncertainties and other issues warrant rate cuts.

Speaking at the Council on Foreign Relations, Powell also reiterated the Fed’s independence, a day after Trump tweeted the Fed “doesn’t know what it’s doing.”

Earlier, St. Louis Fed President James Bullard in an interview with Bloomberg said he does not think the Fed needs to cut rates by a half-percentage point at its next policy meeting in late July.

Bullard last week said he had dissented at the Fed’s June policy meeting because he felt that weak inflation and uncertainties about the economic outlook supported a rate cut.

“Powell and Bullard both made comments that were indicative that we might not see any rate cut in July,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia. “After last week’s meeting, hopes for a rate cut took off and that might not be in the picture next month.”

“Likewise, last week there was a higher level of hope that something positive will come out of the G20 meeting,” Tuz added. ”As the date approaches that optimism is waning a little bit.”

Indeed, US-China trade war anxieties found no relief in a White House official’s remarks that Trump is “comfortable with any outcome” resulting from a planned meeting with Chinese President Xi Jinping at the Group of 20 summit convening in Japan on Friday.

On the economic front, new home sales and consumer confidence

Read More Here...

Stocks slide after Fed's Powell emphasizes 'wait-and-see' stance on rates | Daily Outlook

(MENAFN – FxPro) – Powell said Fed still in ‘wait-and-see’ mode on potential rate cuts

– Fed’s Bullard not in favor of half point rate cut in July

– Housing data and consumer confidence miss estimates

– U.S., Chinese officials agree to keep talking, report says

Stocks slid lower on Tuesday after Federal Reserve President – Jerome Powell said the central banks was still monitoring the economy for signs of weakness and would seek to avoid a knee-jerk reaction in terms of cutting benchmark interest rates.

The Dow Jones Industrial Average fell 0.6%, or 178 points, to 26,550 in intraday trading, while the S & P 500 index lost 25 points, or 0.8%, to 2,919 and the Nasdaq Composite Index gave up 119 points, or 1.5%, to 7,886.

Stocks already were lower earlier on Tuesday after fresh U.S. housing and consumer confidence data came in weaker-than-expected, which potentially could give the Federal Reserve more ammunition to cut rates in the near future.

They slipped further after St. Louis Fed President James Bullard said he was not in favor of a ‘huge action’ on rates in July.

Powell, who was speaking at the Council on Foreign Relations in New York, took a more measured approach than Bullard, signaling only that an interest-rate cut in July is not a done deal.

Wall Street currently has the odds of a rate cut in July at 100%, according to data from the CME Group.

Stocks slide after Fed’s Powell emphasizes ‘wait-and-see’ stance on rates, MarketWatch, Jun 25

MENAFN2506201901560000ID1098685405

Read More Here...

Stocks slide after Fed's Powell emphasizes 'wait-and-see' stance on rates | Daily Outlook

(MENAFN – FxPro) – Powell said Fed still in ‘wait-and-see’ mode on potential rate cuts

– Fed’s Bullard not in favor of half point rate cut in July

– Housing data and consumer confidence miss estimates

– U.S., Chinese officials agree to keep talking, report says

Stocks slid lower on Tuesday after Federal Reserve President – Jerome Powell said the central banks was still monitoring the economy for signs of weakness and would seek to avoid a knee-jerk reaction in terms of cutting benchmark interest rates.

The Dow Jones Industrial Average fell 0.6%, or 178 points, to 26,550 in intraday trading, while the S & P 500 index lost 25 points, or 0.8%, to 2,919 and the Nasdaq Composite Index gave up 119 points, or 1.5%, to 7,886.

Stocks already were lower earlier on Tuesday after fresh U.S. housing and consumer confidence data came in weaker-than-expected, which potentially could give the Federal Reserve more ammunition to cut rates in the near future.

They slipped further after St. Louis Fed President James Bullard said he was not in favor of a ‘huge action’ on rates in July.

Powell, who was speaking at the Council on Foreign Relations in New York, took a more measured approach than Bullard, signaling only that an interest-rate cut in July is not a done deal.

Wall Street currently has the odds of a rate cut in July at 100%, according to data from the CME Group.

Stocks slide after Fed’s Powell emphasizes ‘wait-and-see’ stance on rates, MarketWatch, Jun 25

MENAFN2506201901560000ID1098685405

Read More Here...