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Afternoon Note

Optimism Builds

By Charles Payne, CEO & Principal Analyst
10/20/2017 2:17 PM
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The markets are headed towards new highs at midday on continued hopes that a tax overhaul is closer to become a reality.  Advancers led decliners 1632/1224 on the NYSE and 1766/1021 on the NASDAQ.  Currently, the DOW is on track to close up almost 2% on the week (1.86% now).

On the economic front, existing home sales unexpectedly increased 0.7% in September to a rate of 5.39 million as the impact of Hurricane Harvey and Irma start to subside.  However, this was the second slowest pace in over a year, and 1.5% below the prior year period.  Economist had forecasted sales dropping 1% to 5.30 units.  Supply constraints and higher prices are impacting affordability, especially where it’s most crucial, the first time homebuyers, who represented the lowest share of purchases since September 2015.

Highlights:

The lack of supply continues to fuel the homebuilders and their share prices.  As a matter of fact, the U.S. Home Construction ETF, ITB, is at a 10-year high. 

Oil prices are relatively flat today. The latest release from Baker Hughes shows that U.S. oil rigs fell for the third week in a row down 7 to 736.  WTI is currently trading at $51.22.

Let’s keep our powder dry heading in the weekend.  Have a good one.


 

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