Crude rebounded from overnight lows, $63.60, as headlines regarding the OPEC meeting on June 22 in Vienna mentioned an increase in output of between 300,000 to 600,000 barrels per day. This indication was less than market participants were looking for. West Texas Intermediate (WTI) is currently trading at $65.22, up $0.16 on the day. The energy elf, XLE, has regained a good portion of Friday's loses.
NAHB Housing Market Index
The National Association of Builders (NAHB) housing market index for June was 68 versus expectations of 70, which was also the value in May.
The housing index dipped slightly in June but is still near the 18 year high of 74 made in December. The NAHB blamed lumber prices for the drop in sentiment. Tariffs on lumber from Canada is estimated to have added $9000 to the price of a single-family home since the beginning of 2017. Lumber is currently 17% off its high made in May @ $659 USD/1000 board feet, but still approximately 80% above January 2017 levels. A strong U.S. dollar has helped bring the price of lumber down, although it is still elevated.
Rising mortgage rates, lack of available inventory and rising home prices has made housing less affordable, particularly for first time buyers.
Economic as well as stock related news has been on the light side. Rent-A-Center (RCII) is trading up 22.40% as the company agreed to be acquired/go private for $15 per share in cash by Vintage Capital.
Equities are finding support near previous breakout areas that have turned into support zones. For the Dow, 24,850 is support, which was touched this morning as the Dow traded down to 24,825. Currently, the Dow is trading down 151 (0.60%) points at 24,937. The S&P 500 has been stronger than the Dow on a relative basis and has stayed above its previous breakout area @2,742. The S&P traded as low as 2,757 and is now at 2,769 down 10 points (0.39%). The Russell 2000 continues to power forward, forging a new high earlier in the day, but has since given up the gains and is now unchanged.
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