Markets climbed off the canvas early as value players stepped in.  Metals and mining stocks were one of the first sectors to turn positive.  Bottom fishing in metals were responsible for the gain in the XLE.  Low priced gold, silver and steel stocks such as IAMGold (IAG), +4.88%, Coeur Mining (CDE), +13.3% and AK Steel (AKS) +5.0% are driving the move.  Bottom fishing in semiconductors is also lending some support.  Stocks such as Cirrus Logic (CRUS) +1.5% and Lam Research (LRCX) + 1.9% are strong stocks in the semi sector, although volume is light.  

The National Association of Home Builders released its monthly confidence index.  The index declined four points to 56, the lowest reading since May 2015.  The index was at 74 a year ago, readings above 50 indicate conditions are improving.  Sales expectations over the next six months declined 4 points to 61, and the buyer traffic tracker dropped two points to 43, its lowest since March 2016.  Even though mortgage rates have declined over the past few months, buys are still reluctant to step up as house prices are keeping affordability at the high end of its range.     

Year-to-date, the average median price for an existing single-family home is $259,740, compared to a median price of $248,800 in 2017.  Add in mortgage rates of @ 4.80% compared to approximately 4.20% a year ago and qualifying income rises to $52,416 from $45.936 a year ago.  That’s a 14.11% increase in qualifying income at a time when wages are rising @ 3% per year. 

We like the fact that defensive sectors such as utilities and staples are lagging as investors nibble at risk.