Wed 24 Jan 2018


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In Portfolioticker today

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  • Today at the stock market Opinion
  • The portfolio today Opinion
  • News
  • flag_japan Japan Update
  • flag_china China Update
  • Today at the stock market

    bull/bearThe S&P 500 was little changed on Wednesday while the Nasdaq lagged in choppy trading in the wake of comments by U.S. Commerce Secretary Wilbur Ross which hinted at action against China in a trade war. Ross said at the World Economic Forum in Davos that U.S. trade authorities were investigating whether there is a case for taking action over China’s infringements of intellectual property.

    U.S. President Donald Trump is scheduled to speak in Davos on Thursday.

    Equities were initially lifted by another round of solid earnings and a drop in the USD, which supports large multinational companies, before the trade comments sent the S&P down as much as 0.5%. The Dow and S&P were able to recover from the losses as investors chose to wait for concrete action on trade and stay involved in a market that hasn’t seen a 5% correction in nearly 400 trading days:

    • The S&P 500 index fell 1.6 points, or 0.06%, to 2,837.54
    • The Dow Jones Industrial Average rose 41.31 points, or 0.16%, to 26,252.12 [record high]
    • The Nasdaq Composite index fell 45.23 points, or 0.61%, to 7,415.06.
    • Declining issues outnumbered advancing ones on the NYSE by a 1.21-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favored decliners.
    • The S&P 500 posted 141 new 52-week highs and one new low; the Nasdaq Composite recorded 183 new highs and 12 new lows.
    • Volume on U.S. exchanges was 7.63 billion shares, compared to the 6.53 billion average over the last 20 trading days.

    “The trend is higher and it is so universally, and with such conviction believed that any meaningful pullback is going to be aborted because investors simply don’t want to miss out. So we are not seeing that healthy pullback that most investors would actually welcome,” said Peter Kenny, senior market strategist at Global Markets Advisory Group in New York.

    The Bloomberg Dollar Spot Index (DXY) fell 0.98% against a basket of currencies after U.S. Treasury Secretary Steven Mnuchin welcomed the currency’s weakness. Worries about a protectionist stance have added to the USD’s woes after Trump slapped steep tariffs on imported washing machines and solar panels on Monday.

    Bank stocks were among the gainers, tracking a rise in U.S. Treasury yields as the USD struggled. The S&P financial index rose 0.68% as the best performing of the major sectors.

    Earnings season continues to be strong, with S&P 500 growth expected at 12.4%, according to Thomson Reuters data through Wednesday morning. Of the 88 companies in the index that have posted results, 78.4% have topped expectations versus the 72% beat rate for the past four quarters.

    Among those posting results, General Electric fell 2.66% after the company revealed a regulatory investigation of a multibillion-dollar insurance charge. The company in its earnings report forecast further weakening of its troubled power business and reported a $10 billion loss and a 5% fall in revenue.

    Abbott Laboratories jumped 4.20 % after quarterly profit and 2018 adjusted earnings forecast beat estimates.

    Semiconductor stocks were off 2.31% and pulled the Nasdaq lower as Texas Instruments slumped 8.50% after it posted the slowest revenue growth in four quarters on softer demand for its chips used in communications equipment.” Reuters

    Market indices

    Market indices
    ^ Market indices today (mouseover for 12 month view) Chart: Google Finance

    Index Ticker Today Change 31 Dec 17 YTD
    S&P 500 SPX (INX) 2,837.54 -0.06% 2,673.61 +6.13%
    DJIA INDU 26,252.12 +0.15% 24,719.22 +6.20%
    NASDAQ IXIC 7,415.06 -0.61% 6,903.39 +7.41%

    Portfolio Indices

    USD and AUD denominated indices over the past 52 weeks (Chart: Bunting)
    ^ USD and AUD denominated indices over the past 52 weeks Chart: Bunting

    Index values

    Index Currency Today Change 31 Dec 17 YTD
    USD-denominated Index USD 3.246 -1.22% 3.068 +5.82%
    Valuation Rate USD/AUD 0.81239 +0.93% 0.78528 +3.45%
    AUD-denominated Index AUD 4.000 -2.13% 3.909 +2.33%

    Portfolio stock prices

    :-) Floating above the sea of red, Ebay closed on a record high of $39.82, up 2 cents on its 8 Jan 2018 record of $39.80

    Stock Ticker Today Change 31 Dec 17 YTD
    Alphabet A GOOGL $1,171.29 -0.42% $1,053.00 +11.23%
    Alphabet C GOOG $1,164.24 -0.49% $1,045.65 +11.34%
    Apple AAPL $174.22 -1.60% $169.23 +2.94%
    Amazon AMZN $1,357.51 -0.37% $1,169.54 +16.07%
    Ebay EBAY $39.82 +0.12% $37.76 +5.45%
    Facebook FB $186.55 -1.48% $176.46 +5.71%
    PayPal PYPL $83.71 -0.60% $73.61 +13.72%
    Twitter TWTR $22.37 -1.68% $24.01 -6.84%
    Visa V $124.55 -0.09% $114.02 +9.23%
    VMware VMW $137.07 -0.65% $125.32 +9.37%

    FX: USD/AUD

    USD

    DXY movements
    ^ Bloomberg Dollar Spot Index (DXY) movements today (mouseover for 12 month view) Chart: Bloomberg

    The Bloomberg Dollar Spot Index (DXY) sank 1.0% to the lowest in more than 3 years on the largest decrease since Mar 2017.
    The EUR rose 0.8% to USD 1.2401, the strongest in more than three years.
    Britain’s GBP rose 1.5% to USD 1.4208, the strongest in 19 months.
    Japan’s JPY surged 1.1% to 109.13 per USD, the strongest in more than 19 weeks.
    Bloomberg

    The USD is down to levels not seen since late 2014

    The USD is down to levels not seen since late 2014

    AUD

    AUD movements
    ^ AUD movements against the USD today (mouseover for 12 month view) Chart: xe.com

    Oil and Gas Futures

    Futures prices

    U.S. oil prices rose on Wednesday, boosted by a record 10th straight weekly decline in U.S. crude inventories, though reduced refining activity and rising production signaled U.S. stocks should rise in coming weeks.

    U.S. crude inventories fell by 1.1 million barrels last week, short of expectations, but the 10-week streak of declines represents a record, according to U.S. Energy Information Administration (EIA) data going back to 1982. At 411.6 million barrels, stocks are at their lowest since Feb 2015.

    The steady draw has triggered record buying by speculators, pushing oil benchmarks to three-year highs.

    Also supporting oil prices was a 0.7% drop in the U.S. dollar after Treasury Secretary Steven Mnuchin’s comments that a weaker currency was positive for American trade. A weaker USD makes USD-denominated commodities less expensive for investors using other currencies.

    U.S. West Texas Intermediate (WTI) futures were up 36 cents at $64.83/barrel, after hitting their highest since Dec 2014, as of 12:44 p.m. EST (1744 GMT). Brent futures slipped five cents to $69.92/barrel, after also hitting their highest since Dec 2014.

    “The market has rallied by 50 percent and a lot of investors have been involved for a long time,” said Saxo Bank senior manager Ole Hansen.

    U.S. crude production rose to 9.9 million barrels/day last week, nearing the all-time record of 10.04 million bpd set in 1970, the EIA data showed.

    Speaking at the World Economic Forum in Davos, Switzerland, Khalid al-Falih, Saudi Arabia’s energy minister, said he is not concerned about the threat of U.S. production, citing declining output from Venezuela and Mexico.

    U.S. refining capacity use declined by 2.1 percentage points as maintenance season began, though gasoline and diesel demand still exceeded year-ago levels, the EIA said.

    “It is only a matter of weeks until lower crude oil processing and rising domestic production lead to crude stock builds,” said Carsten Fritsch, oil analyst at Commerzbank AG in Frankfurt, Germany.

    Money managers hold more bullish positions in crude futures and options than at any time on record, encouraged by falling global inventories after production cuts by the Organization of the Petroleum Exporting Countries, Russia and others.

    Some investors now appear to be seeking protection against a possible fall in prices. Trading data shows open interest for Brent put options for selling at $70, $69 and $68 per barrel has climbed since the middle of last week.

    Sukrit Vijayakar of energy consultancy Trifecta said rising sell options are a result of large long positions built in previous months.

    “We still have … nine long barrels for every short barrel, so a reversal should be interesting to watch,” he said.

    However, traders said oil prices were unlikely to fall far because strong global economic growth has boosted oil demand while supply has been restraint by the OPEC-led deal to limit production.Reuters

    Prices are as at 15:47 ET

    • NYMEX West Texas Intermediate (WTI): $66.01/barrel +2.38% Chart
    • ICE (London) Brent North Sea Crude: $70.91/barrel 1.36% Chart
    • NYMEX Natural gas futures: $3.44/MMBTU -0.06% Chart

    flag_europe EU: Government Debt. Q3/2017

    Press Release Extract [eu_govtdebt]

    At the end of the third quarter of 2017, the government debt to GDP ratio in the euro area (EA19) stood at 88.1%, compared with 89.0% at the end of the second quarter of 2017. In the EU28, the ratio also decreased from 83.3% to 82.5%. Compared with the third quarter of 2016, the government debt to GDP ratio fell in both the euro area (from 89.7% to 88.1%) and the EU28 (from 82.9% to 82.5%).

    At the end of the third quarter of 2017, debt securities accounted for 80.3% of euro area and for 81.4% of EU28 general government debt. Loans made up 16.5% and 14.5% respectively and currency and deposits represented 3.1% of euro area and 4.2% of EU28 government debt. Due to the involvement of EU governments in financial assistance to certain Member States, quarterly data on intergovernmental lending (IGL) is also published. The share of IGL in GDP at the end of the third quarter of 2017 amounted to 2.1% in the euro area and to 1.6% in the EU28.

    Government debt at the end of the third quarter 2017 by Member State

    eu_debt2gdp_20180124

    The highest ratios of government debt to GDP at the end of the third quarter of 2017 were recorded in Greece (177.4%), Italy (134.1%) and Portugal (130.8%), and the lowest in Estonia (8.9%), Luxembourg (23.4%) and Bulgaria (25.6%).

    eu_debt2gdp_2_20180124

    Compared with the second quarter of 2017, three Member States registered an increase in their debt to GDP ratio at the end of the third quarter of 2017, twenty three a decrease and the debt-to-GDP ratio for Estonia and Luxembourg remained unchanged. The highest increases in the ratio were recorded in Greece (+1.3 percentage points – pp) and Belgium (+0.9 pp). The largest decreases were recorded in the Czech Republic (-4.3 pp), Cyprus (-2.9 pp), Lithuania (-2.3 pp) and Bulgaria (-2.1 pp).

    eu_debt2gdp_2_20180124

    Compared with the third quarter of 2016, three Member States registered an increase in their debt to GDP ratio at the end of the third quarter of 2017, twenty four a decrease and Latvia remained stable. Increases in the ratio were recorded in Italy (+2.0 pp), Luxembourg (+1.7 pp) and France (+1.0 pp), while the largest decreases were recorded in Cyprus (-7.4 pp), the Netherlands (-4.5 pp), Malta (-4.4 pp) and Germany (-4.1 pp).

    Eurostat, “Quarterly data on government debt. Q3/2017“, 22 Jan 2018 More

    flag_europe EU: Government Deficit. Q3/2017

    Press Release Extract [eu_govtdeficit]

    In the third quarter of 2017, the seasonally adjusted general government deficit to GDP ratio stood at 0.3% in the euro area (EA19), a strong decrease compared with 1.0% in the second quarter of 2017. In the EU28, the deficit to GDP ratio stood at 0.6%, a decrease compared with 1.2% in the previous quarter.

    Government revenue and expenditure for the euro area and EU28

    eu_deficit_20180124

    In the third quarter of 2017, total government revenue in the euro area amounted to 46.2% of GDP, an increase compared with 46.1% in the second quarter of 2017. Total government expenditure in the euro area stood at 46.5% of GDP, a decrease compared to the previous quarter (47.1%).

    In the EU28, total government revenue was 44.8% of GDP in the third quarter of 2017, compared with 44.7% in the second quarter of 2017. Total government expenditure in the EU28 was 45.4% of GDP, a decrease compared to the previous quarter (45.9%).

    Eurostat, “Quarterly data on government deficit. Q3/2017“, 22 Jan 2018 More

    flag_europe EU: Flash Eurozone Composite PMI. Jan 2018

    Press Release Extract [eu_pmi]

    Key findings:

    • Flash Eurozone PMI Composite Output Index at 58.6 (58.1 in December). 139-month high.
    • Flash Eurozone Services PMI Activity Index at 57.6 (56.6 in December). 125-month high.
    • Flash Eurozone Manufacturing PMI Output Index at 61.1 (62.2 in December). 2-month low.
    • Flash Eurozone Manufacturing PMI(3) at 59.6 (60.6 in December). 3-month low

    eu_pmi_composite_20180124

    The eurozone started 2018 with a further acceleration of growth to a near 12-year high, accompanied by the largest payroll gain since 2000 and the highest price pressures for nearly seven years.

    The headline IHS Markit Eurozone PMI rose to 58.6 in January, according to the ‘flash’ estimate (based on approximately 85% of final replies), up from 58.1 December and its highest since June 2006.

    An acceleration of service sector growth to the fastest since August 2007 was partly countered by a slowdown in manufacturing output growth, though the latter remained very buoyant. The latest three months have seen the strongest factory output increase since 2000.

    Activity was buoyed by a further marked and broad- based increase in new business. Although down fractionally on the rise seen in December, January’s inflows of new orders were the second-largest since July 2007, reflecting a further improvement in demand for both goods and services.

    Companies also grew more optimistic about the outlook for the year ahead in January, with business expectations reviving to an eight-month high.

    Capacity and prices

    Amid strong growth of new orders and improved confidence about the outlook, companies expanded their workforce numbers to the greatest extent since September 2000. Factory payroll growth held close to recent record highs while service sector job gains hit the highest since October 2007.

    Despite the increased workforce numbers, capacity continued to show signs of being stretched. Although down to a three-month low, growth of backlogs of work once again ran at one of the highest rates seen over the past decade. Similarly, supplier lead times to factories showed one of the longest lengthenings on record, highlighting the extent to which demand has exceeded supply for many inputs.

    Price pressures meanwhile intensified during January, in part reflecting improved pricing power as demand outpaced supply, as well as rising oil prices. Average input costs and selling prices both showed the biggest monthly increases since April 2011, with rates of inflation accelerating in both manufacturing and services.

    By country growth in Germany came in only slightly weaker than December’s peak, which had been the highest since April 2011, though future optimism ticked higher, and both jobs growth and price pressures hit near seven-year highs. Growth was led by manufacturing, though the expansion of service sector activity accelerated in January.

    In France, the composite PMI ticked higher, albeit down on November’s peak. The latest three months have seen France’s best growth spell since the spring of 2011 and the strongest employment gain since mid-2001, albeit with the pace of job creation cooling slightly in January. Price pressures rose to the highest since 2011.

    Elsewhere, business activity rose at the fastest pace since July 2006, with manufacturing recording the strongest monthly increase in output since April 2000. Service sector growth accelerated but remained below some of the peaks seen last year. Prices charged rose at the steepest rate for nearly a decade.

    Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

    “The eurozone has got off to a flying start in 2018, with business activity expanding at a rate not seen for almost 12 years. The acceleration of growth pushes the survey data into territory consistent with the economy expanding at a super-strong quarterly rate approaching 1%.

    “With employment growing at the fastest pace for 17 years, an improving labour market should feed through to higher consumer spending, which should help further drive the economic upturn as 2018 proceeds, as well as higher wages.

    IHS Markit, “Flash Eurozone Composite PMI. Jan 2018“, 22 Jan 2018 More

    flag_usa US: Gross Domestic Product by State. Q3/2017

    Press Release Extract [us_gdp]

    Real gross domestic product (GDP) increased in every state and the District of Columbia in the third quarter of 2017, according to statistics on the geographic breakout of GDP released today by the U.S. Bureau of Economic Analysis. Real GDP by state growth in the third quarter ranged from 5.7 percent in Delaware to 0.5 percent in South Dakota.

    For the nation, 17 of 21 industry groups increased in the third quarter. Finance and insurance, durable goods manufacturing, and information services were the leading contributors to national economic growth.

    • Finance and insurance increased 14.7 percent nationally and contributed to growth in every state and the District of Columbia. This industry was the leading contributor to growth in seven of the ten fastest growing states, including Delaware—the fastest growing state.
    • Durable goods manufacturing increased 7.5 percent nationally—the sixth consecutive quarter of growth. This industry increased in 49 states and the District of Columbia, and was the leading contributor to growth in Oregon.
    • Information services increased 9.0 percent nationally. This industry contributed to growth in every state and the District of Columbia, and was the leading contributor to growth in Washington.

    Other Highlights

    • Mining increased 9.7 percent nationally—the fourth consecutive quarter of growth. Although this industry wasn’t a leading contributor to growth for the nation, it was t he leading contributor to growth in Texas—the second fastest growing state.
    • Agriculture, forestry, fishing, and hunting declined 2.4 percent nationally—the fourth consecutive quarter of decline. This industry subtracted from growth in every state in the Plains region, most notably in South Dakota and Iowa.

    Bureau of Economic Analysis, “Gross Domestic Product by State. Q3/2017“, 24 Jan 2018 (08:30) More

    flag_usa US: Markit Flash US Composite PMI. Jan 2018

    Press Release Extract [us_pmi]

    Key findings:

    • Flash U.S. Composite Output Index at 53.8 (54.1 in December). 8-month low.
    • Flash U.S. Services Business Activity Index at 53.3 (53.7 in December). 9-month low.
    • Flash U.S. Manufacturing PMI at 55.5 (55.1 in December). 34-month high.
    • Flash U.S. Manufacturing Output Index at 56.2 (55.9 in December). 12-month high.

    us_composite_pmi_20180124

    January data indicated another solid expansion of U.S. private sector business activity, underpinned by the fastest rise in new work for five months. Manufacturing production continued to increase at a much faster pace than service sector activity.

    At 53.8 in January, down from 54.1 in December, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index signalled the least marked rate of business activity expansion since May 2017. Nonetheless, the headline index has now posted above the 50.0 no-change threshold for 23 consecutive months.

    Slower private sector output growth reflected the weakest rise in services activity for nine months. In contrast, manufacturers experienced one of the strongest rates of production growth since the first quarter of 2015, supported by improving domestic sales and sustained inventory building in January.

    The latest survey revealed a robust and accelerated upturn in new order books across the private sector economy. Survey respondents attributed greater sales to improved business and consumer confidence. Manufacturers signalled the second-fastest expansion of incoming new work since March 2015.

    Payroll numbers continued to increase at the start of 2018. The latest upturn marked eight years of sustained job creation across the private sector economy. Input price inflation meanwhile intensified in January, with the latest rise in cost burdens the fastest since September 2017. A number of firms cited higher fuel, energy and oil- related costs during the latest survey period.

    Private sector companies indicated a rebound in business confidence from the 15-month low seen during December. Greater business optimism was mainly linked to rising new order volumes and hopes of a sustained improvement in domestic economic conditions.

    The composite index is based on original survey data from the IHS Markit U.S. Services PMI and the IHS Markit U.S. Manufacturing PMI.

    IHS Markit U.S. Services PMI™

    The seasonally adjusted IHS Markit Flash U.S. Services PMI™ Business Activity Index registered 53.3 in January, down slightly from 53.7 in December, to signal the slowest rise in service sector output since April 2017.

    Despite weaker business activity growth, latest data revealed a robust and accelerated upturn in new work received by service providers. A number of survey respondents commented on signs of improved client demand and greater willingness to spend among consumers.

    January data pointed to a solid increase in staffing numbers across the service economy, which survey respondents linked to long-term expansion plans and improved business confidence. That said, the rate of job creation eased slightly since December and was the least marked for seven months.

    Input cost inflation accelerated to a four-month high during January. Greater operating expenses resulted in another solid rise in average prices charged by service providers.

    Meanwhile, service sector business confidence picked up to its strongest for three months in January. Optimism regarding the year ahead outlook was linked to rising volumes of new work and the improving economic backdrop.

    IHS Markit U.S. Manufacturing PMI™

    Manufacturers reported a strong start to 2018, with production volumes and incoming new work both rising at faster rates than seen at the end of last year. At the same time, export sales expanded to the largest degree since August 2016.

    More favourable demand conditions encouraged another robust rise in employment numbers, although the rate of job creation eased slightly from December’s 39-month peak.

    Adjusted for seasonal influences the headline IHS Markit Flash U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) rose to 55.5 in January, from 55.1 in December. The latest reading pointed to the sharpest improvement in manufacturing business conditions since March 2015.

    Input buying also increased at the fastest pace since early-2015, driven by rising production and efforts to build inventories across the manufacturing sector. The latest increase in stocks of purchases was the strongest since January 2017.

    Reports from survey respondents suggested that adverse weather conditions and stretched operating capacity had led to longer delivery times from suppliers at the start of the year.

    Meanwhile, input cost inflation remained strong across the manufacturing sector, which contributed to the joint-fastest rise in factory gate prices since December 2013.

    Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

    ‘January saw an encouraging start to the year for the US economy. Business activity across the manufacturing and service sectors continued to expand, driving further job gains as companies expanded capacity. Manufacturing is faring especially well, in part thanks to the weaker dollar, providing an important spur to the economy at the start of the year.

    ‘Although the overall pace of economic growth signalled by the surveys waned to an eight-month low, the forward-looking indicators suggest the slowdown will prove transitory. In particular, business optimism about the year ahead improved markedly and inflows of new orders hit a five-month high. Growth should therefore pick up again in coming months.

    ‘Inflationary pressures meanwhile kicked higher, with January seeing the second-largest monthly increase in input costs since 2015. Higher oil prices were widely reported but, more generally, stronger demand is also helping companies push through price hikes.’

    IHS Markit, “Markit Flash US Composite PMI. Jan 2018“, 24 Jan 2018 (09:45) More

    flag_usa US: Existing Home Sales. Dec 2017

    Press Release Extract [us_exres]

    Existing-home sales subsided in most of the country in December, but 2017 as a whole edged up 1.1 percent and ended up being the best year for sales in 11 years, according to the National Association of Realtors®.

    Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, increased 1.1 percent in 2017 to a 5.51 million sales pace and surpassed 2016 (5.45 million) as the highest since 2006 (6.48 million).

    In December, existing-home sales slipped 3.6 percent to a seasonally adjusted annual rate of 5.57 million from a downwardly revised 5.78 million in November. After last month’s decline, sales are still 1.1 percent above a year ago.

    Lawrence Yun, NAR chief economist, says the housing market performed remarkably well for the U.S. economy in 2017, with substantial wealth gains for homeowners and historically low distressed property sales. “Existing sales concluded the year on a softer note, but they were guided higher these last 12 months by a multi-year streak of exceptional job growth, which ignited buyer demand,” said Yun. “At the same time, market conditions were far from perfect. New listings struggled to keep up with what was sold very quickly, and buying became less affordable in a large swath of the country. These two factors ultimately muted what should have been a stronger sales pace.”

    Added Yun, “Closings scaled back in most areas last month for this same reason. Affordability pressures persisted, and the pool of interested buyers at the end of the year significantly outweighed what was available for sale.”

    The median existing-home price for all housing types in December was $246,800, up 5.8 percent from December 2016 ($233,300). December’s price increase marks the 70th straight month of year-over-year gains.

    Total housing inventory at the end of December dropped 11.4 percent to 1.48 million existing homes available for sale, and is now 10.3 percent lower than a year ago (1.65 million) and has fallen year-over-year for 31 consecutive months. Unsold inventory is at a 3.2-month supply at the current sales pace, which is down from 3.6 months a year ago and is the lowest level since NAR began tracking in 1999.

    “The lack of supply over the past year has been eye-opening and is why, even with strong job creation pushing wages higher, home price gains – at 5.8 percent nationally in 2017 – doubled the pace of income growth and were even swifter in several markets,” said Yun.

    First-time buyers were 32 percent of sales in December, which is up from 29 percent in November and unchanged from a year ago. NAR’s 2017 Profile of Home Buyers and Sellers – released in late 2017 – revealed that the annual share of first-time buyers was 34 percent.

    According to Freddie Mac, the average commitment rate (link is external) for a 30-year, conventional, fixed-rate mortgage inched higher for the third straight month to 3.95 percent in December from 3.92 percent in November. The average commitment rate for all of 2017 was 3.99 percent.

    “Rising wages and the expanding economy should lay the foundation for 2018 being the turning point towards an uptick in sales to first-time buyers,” said Yun. “However, if inventory conditions fail to improve, higher mortgage rates and prices will further eat into affordability and prevent many renters from becoming homeowners.”

    Properties typically stayed on the market for 40 days in December, which is unchanged from November and down from a year ago (52 days). Forty-four percent of homes sold in December were on the market for less than a month.

    Realtor.com®’s Market Hotness Index, measuring time-on-the-market data and listings views per property, revealed that the hottest metro areas in December were San Jose-Sunnyvale-Santa Clara, Calif.; San Francisco-Oakland-Hayward, Calif.; Vallejo-Fairfield, Calif.; Colorado Springs, Colo.; and Stockton-Lodi, Calif.

    NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty, says improving the new tax law is a top priority for Realtors® in 2018. “Especially in high-cost, high-taxed markets, there’s still big concern that the overall structure of the final bill diminishes the tax benefits of homeownership in a way that would adversely affect home values and sales over time,” she said. “As the housing market adjusts to the new law, Realtors® will be listening to their clients and communicating to lawmakers ways to ensure owning a home is truly incentivized in the tax code.”

    All-cash sales were 20 percent of transactions in December, which is down from 22 percent in November and 21 percent a year ago. Individual investors, who account for many cash sales, purchased 16 percent of homes in December, up from 14 percent both last month and a year ago. For the year, all-cash sales averaged 21 percent of sales (23 percent in 2016), and investor sales were at 15 percent (14 percent in 2016).

    Distressed sales – foreclosures and short sales – were 5 percent of sales in December, up from 4 percent in November but down from 7 percent a year ago. Four percent of December sales were foreclosures and 1 percent were short sales.

    Single-family and Condo/Co-op Sales

    Single-family home sales declined 2.6 percent to a seasonally adjusted annual rate of 4.96 million in December from 5.09 million in November, but are still 1.0 percent above the 4.91 million pace a year ago. The median existing single-family home price was $248,100 in December, up 5.8 percent from December 2016.

    Existing condominium and co-op sales fell 11.6 percent to a seasonally adjusted annual rate of 610,000 units in December, but are still 1.7 percent above a year ago. The median existing condo price was $236,500 in December, which is 6.4 percent above a year ago.

    Regional Breakdown

    December existing-home sales in the Northeast fell 7.5 percent to an annual rate of 740,000, and are now 2.6 percent below a year ago. The median price in the Northeast was $261,400, which is 3.0 percent above December 2016.

    In the Midwest, existing-home sales dipped 6.3 percent to an annual rate of 1.33 million in December, but are still 1.5 percent above a year ago. The median price in the Midwest was $191,400, up 7.8 percent from a year ago.

    Existing-home sales in the South decreased 1.7 percent to an annual rate of 2.30 million in December, but are still 3.1 percent higher than a year ago. The median price in the South was $221,200, up 5.8 percent from a year ago.

    Existing-home sales in the West declined 1.6 percent to an annual rate of 1.20 million in December, and are now 0.8 percent below a year ago. The median price in the West was $367,400, up 7.3 percent from December 2016.

    The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.

    National Association of Realtors, “Existing-Home Sales Fade in December; 2017 Sales Up 1.1 Percent“, 24 Jan 2018 (10:00) More

    flag_japan Japan update

    Nikkei Flash Japan Manufacturing PMI. Jan 2018

    Press Release Extract [jp_pmi]

    Key points:

    • Flash Japan Manufacturing PMI® rises to 54.4 in January (54.0 in December).
    • Output expands at quickest rate in 47 months.
    • New orders continue to rise sharply. Inflationary pressures intensify.

    jp_pmi_20180124

    Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said:

    “January flash PMI data for the Japanese manufacturing economy signalled further positivity. The sector has observed accelerated rates of improvement in each of the past three months.

    “The strongest reading in the PMI since February 2014 was supported by quickened rates of output and employment growth, in addition to a relatively sharp expansion in new orders.

    “Strikingly, output price inflation accelerated to the fastest rate since October 2008 amid sharper rises to input costs. With a low rate of unemployment and sustained growth in official GDP data, inflationary pressures should continue to mount.”

    IHS Markit, “Nikkei Flash Japan Manufacturing PMI. Jan 2018“, 24 Jan 2018 More

    Trade Statistics (Provisional). Dec 2017

    Press Release Extract [jp_trade]

    jp_trade_20180124

    Ministry of Finance – Customs and Tariff Bureau, “Trade Statistics (Provisional). Dec 2017“, 24 Jan 2018 More

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