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To: Johnny Canuck who wrote (55274)5/23/2022 7:54:56 PM
From: Johnny Canuck
   of 56054
 
The Tell

When will stocks find a bottom? Treasury rates need a footing first, says this strategistPublished: May 23, 2022 at 6:18 p.m. ET
By
Joy WiltermuthFollow




0

Watch for peak volatility, not necessarily spread blowout levels


Stocks bounced higher to start the week after the S&P 500 briefly traded in bear-market territory Friday. AFP/GETTY IMAGES

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Referenced Symbols

TMUBMUSD10Y
2.847%
SPX
+1.86%
CL00
-0.68%
LQD
-0.36%
HYG
+0.39%


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Length4 minutes

Maybe forget about finding a crystal ball for stocks.

It’s “Finance 101 stuff” that Treasury rates need to stabilize before it’s possible for investors to gauge if U.S. equities have hit bottom, according to Nicholas Colas, co-founder of DataTrek Research.

Since Treasury rates provide the “bedrock of capital asset-pricing models,” without knowing if longer-term rates will settle anywhere from 2% or 5%, investors can’t know the cost of capital “that discounts corporate cash flows to create stock prices,” Colas said in a Monday client note.

Patches of rate stability have been fleeting in recent months as Federal Reserve Chairman Jerome Powell focuses on steering the U.S. economy into a “softish landing,” while fighting high inflation by aggressively raising the central bank’s policy rate and reducing its nearly $9 trillion balance sheet.

In roughly the past month alone, the 10-year rate TMUBMUSD10Y, 2.847% swung to a new one-year high of 3.124% on May 6, only to revert Friday to 2.785%, or its lowest level since April 26, according to Dow Jones Market Data.

This matters because “until investors see greater stability in long-run Treasury prices, it is unlikely they will feel confident that U.S. equity valuations have really troughed,” he said.

Finding a bottomInvestors hit with sharp stock-market losses this year also have been dealt a gut-punch from bonds.

The S&P 500 index SPX, +1.86% traded briefly in bear-market territory on Friday, before rallying. The large-cap benchmark bounced higher again Monday to close 17.2% down from its recent peak, leaving investors to wonder if it’s time to buy the dip.

Rate volatility had been pegged as the main culprit of negative total returns on bonds earlier this year. However, some cracks also appear to be forming recently in parts of corporate credit, particularly as some f ormerly high-flying tech companies juggle layoffs and losses, and big-box retailers see a pullback in consumer spending on what they have in stock.

Read: Junk bonds are showing signs of liquidity strains as the S&P 500 narrowly avoids bear market territory

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A key way bond investors gauge shifting market sentiment is by tracking credit spreads, or the premium that investors earn above a risk-free rate on bonds to help account for default risks.

Colas pegged the recent widening in U.S. investment-grade corporate bond spreads as “nowhere near” the levels seen around the 2011 Greek debt crisis (see chart) or the 2016 growth scare from slowing Chinese economic growth and plunging oil CL00, -0.68% prices.


Corporate bond spreads near Greek crisis levels. ICE DATA INDICES, DATA TREK RESEARCH
“On the plus side, the investment-grade corporate bond market is not yet pricing in a recession or even a growth scare,” Colas said, even if spreads can still widen a lot from here.

The bigger question is, can a blowout in either investment-grade LQD, -0.36% or high-yield HYG, +0.39% corporate bond spreads telegraph when stocks will hit a bottom? Looking back through two decades of selloffs produced mix results, according to a CreditSights report on Monday.

A more accurate signal, however, was found when looking at the rate of change of spreads (see chart), which peaked for both investment-grade (IG) and high-yield (HY) about 42 days on average before the S&P 500 hit bottom in major market selloffs since 1998.


Peak volatility in corporate bonds preceded past stock-market bottoms. CREDITSIGHTS. FACTSET
The hard part is knowing when corporate bond volatility has peaked.

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To: Johnny Canuck who wrote (55275)5/23/2022 8:03:04 PM
From: Johnny Canuck
   of 56054
 
Commodity Update

Natural trying to breakout to a new range. It needs a confirmation day tomorrow. Uptrend
still intact.



Wood bouncing back from the bottom of the trading range it is has kept for the last few months.



Copper has broken the recent short term down trend but is struggling to get back into the trading
range of the last few months. Copper is still on the defensive.



Gold has broken the short term downtrend but is struggling to get any upside momentum.



Silver bouncing from recent low but bouncing just below a key resistance level.


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To: Johnny Canuck who wrote (55276)5/23/2022 8:06:21 PM
From: Johnny Canuck
   of 56054
 
SNAP guidance suggesting the fear of slowing advertising budgets may be affect GOOGL, FB, TWTR and SNAP. This is important as it suggest companies do not expect more traction by advertising more.

>>>>>>>>>>>>>>>>>>>>>

Snap expects to miss revenue target, slow down hiring

Sheila Dang
Mon, May 23, 2022, 3:29 PM

In this article:



SNAP
-3.40%

Watchlist

Watchlist


Pattern
Bullish





By Sheila Dang

(Reuters) - Snap Inc expects to miss its quarterly revenue targets, the company said in a filing on Monday, and will slow hiring for this year, Chief Executive Evan Spiegel told employees.

The parent company of photo messaging app Snapchat said economic conditions have "deteriorated further and faster than anticipated," according to the filing.

Challenges facing the company include rising inflation, supply chain shortages and the impact of the war in Ukraine, Spiegel said in a memo seen by Reuters.

Shares of Snap dropped 28% in after-market trading.

Last month, Snap forecast second-quarter revenue growth of 20% to 25% over the previous year.

The news follows statements by companies including Uber Technologies Inc and Facebook-owner Meta Platforms Inc earlier this month that they would rein in costs and hiring.

In the memo, Spiegel said Snap would evaluate the rest of this year's budget and "leaders have been asked to review spending to find additional cost savings."

Some planned hiring will be pushed into next year, though the company still expects to hire more than 500 people by the end of this year, he said.

(Reporting by Sheila Dang in Dallas; Editing by Richard Chang)

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To: Johnny Canuck who wrote (55277)5/23/2022 8:18:20 PM
From: Johnny Canuck
2 Recommendations   of 56054
 
Seven Farming Investments to Purchase for Income Investors to Reap ReturnsBy: Paul Dykewicz, May 13, 2022



Seven farming investments to purchase for income investors to reap robust returns seem to be strong choices even as Russia’s President Vladimir Putin keeps ordering new attacks against Ukraine and its people who are putting up staunch resistance.

The seven farming investments to purchase feature stocks and broad commodity funds that offer investors multiple catalysts. Key reasons for purchasing agricultural stocks and funds are that grain and oilseed prices are rising.

Global grain and oilseed markets were tight heading into 2022, and the Putin’s war in Ukraine has caused a decreased supply, according to a recent report from BofA Global Research. Since the start of 2022, Chicago Board of Trade (CBOT) wheat prices nearly doubled from $7.80 per bushel to $14.25 before settling back down to $11.67.

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The U.S. Department of Agriculture released its latest World Agriculture Supply and Demand Estimates (WASDE) report on May 12, offering initial projections for the industry marketing year 2022/23. The report trimmed the outlook for global wheat production by 3.6 million metric tons (MMT) MT to 774.8 MMT. Reduced supply is projected from Ukraine, Argentina and Australia, while increases were forecast for Canada, Russia and the United States.

Global consumption is projected at 787.5 MMT, while the U.S farm gate price is forecast to be 65% higher than the same time a year ago, according to U.S. Wheat Associates.

Meanwhile, corn prices have climbed past $8.08 per bushel, an increase of more than 30% so far this year, while soybean prices have rallied more than 30%, reached $17.40 per bushel late last month and traded at $17.23 per bushel on May 13. The three commodities repriced significantly higher, reflecting the likelihood of prolonged disruptions to Ukraine’s agriculture exports and concerns about rising input costs, as well as fertilizer shortages. While prices look high from a historical perspective, tight fundamentals likely will boost spot prices, according to BofA.

Seven Farming Investments to Purchase Amid Fertilizer Shortages

Ukraine grain and oilseed shipments have reportedly fallen more than 80% from approximately 5-6mn mt per month in 2020-21 to roughly 1mn mt per month recently, BofA wrote in a recent research note. These lost exports, if annualized, equate to about 10 days of world food supply, BofA added.

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“Fuel, fertilizer and seed shortages, and Russian military presence could disrupt Ukraine’s spring planting and wheat crop harvest this summer, which could lead to sustained shortfalls,” BofA warned. “Drought in U.S., Canada and China has the potential to further add to the tightness, especially for wheat.”

Buyers have leaned on other places to source grain, but ultimately the world has less food than before the war, BofA cautioned. If supply shortfalls outside Ukraine materialize, more food security measures may be needed, push prices even higher and hit emerging market economies the hardest.

Seven Farming Investments to Purchase Navigate 300% Fertilizer Price Hike

Global fertilizer prices have zoomed at least 300% since 2020 due to soaring energy costs, economic sanctions and hoarding, BofA wrote. The fertilizer price spike added about $1 per bushel and $0.60 per bushel to corn and soybean costs, respectively. Many farmers pay the increase, while others could opt to cut their use of fertilizer and risk reduced yield.

“Estimating the impact of lower fertilizer use on crop yields is a challenge due to limited data and other factors affecting yields, but there is a positive relationship between fertilizer use on agricultural lands and cereal crop yields,” BofA wrote.

Click here for a free two-week trial of Stock Rover.

Seven Farming Investments to Purchase for Income Aided by Economic Sanctions Triggered by Putin

The shelling of hospitals, schools, residential areas, churches, nuclear power plants, oil refineries and a theater used as a shelter became a precursor to brutal rapes, torture and outright executions of Ukrainian civilians that caused many countries to put sanctions on Russia. The sanctions include scaling back or severing ties with Russia as a producer of grain, oil and natural gas.

Russia’s loss directly from Putin’s invasion are leading to potential gains for Western oil companies that are trying to fill the void for European and other customers seeking to wean themselves away from buying Russian commodities that are helping to fund the war against Ukraine. As an old adage goes, there always is a bull market somewhere. One of the newest is in agriculture.

Fertilizer Stocks Are Among Seven Farming Investments to Purchase for Income

Fertilizer manufacturers appear most likely to profit from Russia’s attack against Ukraine, said Bryan Perry, head of the Cash Machine investment newsletter, as well as the Premium Income, Quick Income Trader, Hi-Tech Trader and Breakout Options Alert advisory services. While there may be “demand destruction” in energy markets, there will not be in the global food supply and demand curves, he added.



Paul Dykewicz interviews Bryan Perry, who leads the high-income Cash Machine newsletter.

Wheat, corn and soybean prices jumped upon the full revelation of the Russian attack of Ukraine, Perry continued. One of the biggest winners from pure demand and sanctions will be CF Industries Holdings, Inc. (NYSE: CF), a manufacturer and distributor of agricultural fertilizers that include ammonia. The company, based in the Chicago suburb of Deerfield, Illinois, is facing increased distribution costs, particularly for transportation.

Plus, the cost of producing nitrogen fertilizers is highly dependent on the cost of natural gas, which is the principal raw material and primary fuel source used in ammonia production at the company’s manufacturing facilities. For many producers globally, more than 70% of the total cost to produce ammonia is from the cost of natural gas.

The cost of natural gas varies significantly between geographic locations. For example, European customers may see their burden grow, since natural gas prices there have been surging.



Chart courtesy of www.stockcharts.com

Seven Farming Investments to Purchase for Income Include Nutrien

Nutrien Ltd. (NYSE: NTR), a Canadian fertilizer company based in Saskatoon, Saskatchewan, is the largest producer of potash and the third-largest producer of nitrogen fertilizer in the world. The company’s interim chief executive Ken Seitz said Nutrien will boost potash production if supply problems worsen in Russia and Belarus, the world’s second- and third-largest potash-producing countries after Canada.

The economic sanctions imposed by the United States, the European Union and others against Russia may hurt the country’s exports of natural gas, potash and nitrogen. Belarus, a puppet state of Russia, has joined the invasion of Ukraine and must adjust to economic sanctions that have restricted its potash exports.

The decision by Putin to wage war against Ukraine further has raised concerns about wheat, corn and vegetable oil supply problems in the Black Sea region. The result is sharply rising world prices for these agricultural products.



Chart courtesy of www.stockcharts.com

CVR Partners Joins Seven Farming Investments to Purchase

CVR Partners LP (NYSE: UAN), of Sugar Land, Texas, makes and provides nitrogen fertilizer products as a subsidiary of Coffeyville Resources, a unit of CVR Energy Inc. UAN is another of Perry’s four farming picks. Income investors should appreciate the stock’s 9.2% dividend yield.

The company’s nitrogen fertilizer manufacturing facility includes a 1,300-ton-per-day ammonia unit, a 3,000 ton-per-day urea ammonium nitrate (UAN) unit and a dual-train gasifier complex that can produce 89 million standard cubic feet of hydrogen per day. The UAN solution, produced by combining urea, nitric acid and ammonia, is a liquid fertilizer product with a nitrogen content ranging between 28% and 32%.

UAN can be applied more uniformly than non-liquid forms of fertilizer. The solution also can be mixed with herbicides, pesticides and other nutrients to let farmers cut costs by applying several materials simultaneously rather than making separate applications.



Chart courtesy of www.stockcharts.com

Mosaic Ranks Among Seven Farming Investments to Purchase for Income

The fourth farming investment favored by Perry is Mosaic Company (NYSE: MOS), a Fortune 500 company headquartered in Tampa, Florida, mines phosphate and potash and urea. The largest U.S. producer of potash and phosphate fertilizer, Mosaic operates through segments such as international distribution and Mosaic Fertilizantes.

Russia is a major producer of potash, a key crop nutrient used in farming production. Mosaic reported solid earnings on Feb. 22 that were in line with expectations.

Mosaic’s year-over-year earnings per share (EPS) growth rose about 242%. In addition, pricing pressure in the industry caused by less supply from Russia has lifted the share price of MOS.



Chart courtesy of www.stockcharts.com

Money Manager Picks One of Seven Farming Investments to Purchase for Income

A seasoned investment professional who favors farming machinery company Deere (NYSE: DE) is Michelle Connell, a former portfolio manager and the current president of Dallas-based Portia Capital Management.



Michelle Connell, CEO, Portia Capital Management

The rationale for recommending Deere, Connell said, includes:

-More than half its revenues come from large agriculture.

-If the war in Ukraine continues, U.S. farmers will benefit from higher prices for their crops.

-Higher farm profits mean that that farmers and farming corporations will be more likely to buy large expensive farm equipment.

Deere has fallen back more than 15% from its recent high on April 20, so investors might find its current price to be a good entry point, Connell continued.



Chart courtesy of www.stockcharts.com

KROP Becomes the Final of Seven Farming Investments to Buy

Global X AgTech & Food Innovation ETF (NASDAQ: KROP) looks interesting as a possible buy, Connell continued. KROP is an agricultural technology ETF.

KROP holds companies that focus on ecological ways of feeding the world, Connell commented. The fund has done well this year, but several of its individual holdings have retreated with the market sell-off, she added.

However, KROP might be a less risky way to invest in these innovative companies, Connell mentioned.`

A few key holdings of KROP include:

Nutrien, the world’s largest fertilizer producer; andCorteva, a spin-off from Dupont that focuses on the development of seeds that are more pest and weather-resistant, while using more environmentally friendly crop chemicals.

Chart courtesy of www.stockcharts.com

Pension Head Picks MOO as One of the Seven Farming Investments to Buy

Investors should weight the purchase of the ETF VanEck Agribusiness (MOO), said Bob Carlson, a pension fund chairman who also leads the Retirement Watch investment newsletter. The fund, which I personally have owned for years, seeks to track the MVIS Global Agribusiness Index. The index is composed of companies that generate at least 50% of their revenues from agrichemicals, animal health and fertilizers, seeds and traits, farm/irrigation equipment, farm machinery, aquaculture, fishing, livestock and more.



Bob Carlson, who leads Retirement Watch, meets with Paul Dykewicz.

MOO’s largest holdings recently included Deere & Co. (NYSE: DE), Nutrien (NYSE: NTR), Bayer (OTCMKTS: BAYRY), Zoetis (NYSE: ZTS) and Archer-Daniels Midland (NYSE: ADM). The ETF owns more than 50 stocks and has nearly 60% of its holdings in its 10 largest positions.

Income investors cannot be blamed if they lack excitement about MOO’s almost non-existent dividend. With a dividend per share of just 0.02%, Stock Rover shows the yield as 0.00%.



Chart courtesy of www.stockcharts.com

Supply Chains at Risk as China Tightens COVID Restrictions Further

China risks a “tsunami” of COVID-19 infections and an estimated 1.6 million deaths if its government abandons its 0% policy and allows the highly-infectious omicron variant to spread unrestrained, according to researchers at Shanghai’s Fudan University. Shanghai is tightening its COVID-19 restrictions again after fleetingly easing them, frustrating residents who had hoped more than a month-long lockdown was on the verge of scaling back. However, new cases occurred in the city’s financial center. Also this week, authorities suspended service on the city’s last two subway lines that still had been operating. The shutdown idled the city’s entire subway system.

The lockdowns in China have affected at least 373 million people, including roughly 40% of the country’s gross domestic product (GDP). A key effect is continued disruption of the world’s supply chain for products, such as rice and oil.

Most of Shanghai’s 25 million residents remain in lockdown, with Chinese military and additional health workers assisting in the response. Shanghai, home to the world’s largest port, has been unable to keep up with unloading cargo due to strict regulations that have caused shipping containers to stack up.

Some frustrated Shanghai residents have taken videos that went viral to show residents yelling from high-rise buildings about needing food. But government officials are trying to crack down on the posting of such expressions of discontent.

Also in China, young children with COVID-19 have been separated forcibly from their parents by authorities, who have sparked public discord, as Chinese leaders seek to stop the spread of the latest contagious subvariant of Omicron, BA.2. The variant also is causing new infections in European nations such as Germany, the Netherlands and Switzerland.

U.S. COVID Near 1 Million

As the U.S. COVID-19 deaths topped 1 million this week, a report indicated a rising proportion of COVID-19 deaths are occurring among vaccinated people. U.S. COVID-19 cases, as of May 13, hit 82,401,197, with deaths rising to 999,470. America still has the dubious distinction as the country totaling the most COVID-19 cases and deaths.

COVID-19 deaths worldwide exceeded 6.26 million to total 6,261,872 on May 13, according to Johns Hopkins University. Cases across the globe have jumped to 520,451,021.

As of May 13, 257,738,565 people, or 77.6% of the U.S. population, have obtained at least one dose of a COVID-19 vaccine, the CDC reported. Fully vaccinated people total 220,502,022 or 66.4% of the U.S. population, according to the CDC. America also has topped a key milestone by giving a COVID-19 booster vaccine to 102.1 million people.

The seven farming investments to purchase for income investors to reap returns are fortified by rising food prices. Investors may find price drops in farming stocks and funds lately offer discounts to purchase shares at reduced prices.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, Guru Focus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.

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To: Johnny Canuck who wrote (55278)5/23/2022 8:50:36 PM
From: Johnny Canuck
   of 56054
 
Notes from the STWD earnings call:

"We funded 1.1 billion of these loans as well as 241 million of pre-existing loan commitments with most of our fundings back ended to the last half of the quarter. As we continue to transform our collateral mix, 49% of the quarter's originations were multifamily and 22% were residential, while 83% of the 716 million in loan repayments were hotel and office. Our loan portfolio ended the quarter at a record 14.8 billion, up 33% year over year. Of this amount, 92% represents senior secured first mortgage loans and 98% is floating rate.

Given the steepness of the forward curve, we expect earnings to increase once we move past our above-market LIBOR floors, which have a weighted average of 57 basis points. Companywide, inclusive of floating rate assets and liabilities in all of our businesses, a 200 basis point increase in base rates would increase annual earnings by $34 million or $0.11 per share. The credit performance of our portfolio continues to be strong with a first quarter origination LTV of 57%, a weighted average LTV of our overall portfolio of 61% and a weighted average risk rating of 2.6%. On the CECL front, our general reserve declined by 3 million from last quarter to a balance of 51 million.

In looking at credit performance and the adequacy of our CECL reserve, one of the key indicators of future loss is historical experience. As Jeff will discuss with you, our historical loss experience in 13 years is actually a net DE gain of $78 million. Based on this, our CECL reserve could arguably be zero, if not for the saying that no one can have a zero reserve. In cases where we have to take back an asset, we utilize our decades of experience and Starwood's broader expertise to control our destiny, a strategy which has proven to be very successful for our shareholders."

"And at our fair value marks, our book value today is $21.98 per share. With scheduled rent increases contractually based on median income and CPI levels at our 15,000-unit Florida multifamily portfolio, all else equal, we expect our book value to rise significantly over the coming years as we mark this portfolio to market quarterly. Our stock trades today at 1.1 times our Q1 fair market book value of $21.98, which despite our significant outperformance and liquidity since COVID began, is at the low end of our historical range. With these expected book value gains, our stock sits today at a lower multiple to book than at any point in our history other than 2020 and well below the multiples of our closest peers."

"OK. So the special dividend related -- as it relates to the Orlando gain, which was really the outsized performance for the quarter, we look to a full year because the dividend is based on full year taxable income and we look to pay that out over four quarters. And so we wouldn't be making a determination today as to a special dividend related to that gain. We will see how the year plays out and ultimately make that determination as we approach the end of the year to see whether or not we've covered.
So it's not a decision that we would make today."

"We told you back in the middle of the pandemic that we were comfortable paying our dividend. It was never in jeopardy and is solid as a rock going forward, given the amount of unrealized gains in our book and our ability to execute sales at individual assets or larger investments going forward. One of the assets which our approach to buying equity into the trust was assets that you'd want to give to your kids' trust funds. And that's the portfolio of multifamily.

We bought Northern Florida. We call it Woodstar. Affordable housing, just to remind you, rents can't go down. They can only go up, and rents are obviously rising across the United States in a fashion that we've never seen before, powered by inflation, but also this lack of units that is tremendous dearth of homes that is creating this rapidly rising housing complex.

And we ask ourselves, is this going to continue like this? Or what's the outcome for housing prices given -- is it a bubble? While prices in some cities have run pretty far, this is not a supply issue. This is not like overbuilding that we saw in '07, '08. And it's not powered by people borrowing 100% of loans of the home price with NINJA loans. This is really demand in wealth and people working from home and trying to improve their homes.

And we expect, of course, it will slow down. It should be -- or continue to be a source of stability for the U.S. economy because it really isn't overbuilt. Most builders -- one of the reasons we built almost 15 million fewer units from 2010 to 2020 than we did in every decade prior going back to the 40s with builders stop doing spec homes and couldn't get blinds to improve land easily from anyone, and so it's just disciplined in the housing market and the result is what you see today.

And it's bled over into the multifamily markets, which continue to be to enjoy double-digit increases in rents. We're the nation's largest owner of apartments. We have 115,000 apartments, including the units that are owned by Starwood Property Trust. And what that means actually going forward -- affordable housing rents are set by -- not by inflation, but by the income growth of the SMSA, in which they operate."

"Yes. I'm expecting a recession, but that goes to the LTV of the book at 61%. I think we've got more than adequate cushion. It would have to be a complete wholesale destruction of the economy to really dramatically injure us with demand destruction.

That would empty office buildings or cause unemployment to skyrocket and wage growth to cease and reverse. It's not -- and obviously, the energy book and the energy complex is absurdly healthy. And even on -- we have a small oil and gas business at the parent level, and investments we wrote off are now gushing cash flow. So it will just change the opportunity set for us.

Probably there will be better investments to be made frankly. People do have loan maturities, and that was the year we were created. We were created to provide liquidity and capital when banks warrant lending, and we thought there were terrific risk return opportunities for us, risk reward opportunities for us, solving people's capital stack problems. So in a way, those are our best days, our competition."

"Right now, there's a lot of assets on the market. So there are a lot of people selling assets, particularly multifamily, of course, people trying to lock in today's cap rates, which again, are in the threes -- low threes, like three, three and a quarter and, in some cases, breaking three. So I think there's been a surge of assets for sale. You haven't seen a ton of other asset classes trade dramatically.

People have tested the waters on hotels. The asks are super high. The bids are not at the ask. You haven't seen a ton of trades.

We are quite active on the equity side. There is -- there are -- we are -- as are some of our peers. And there's a lot of people holding on to property because of the rent growth and lack of alternatives. But I would probably agree that volumes will go down.

We don't need transactions. We just need refinancing opportunities. So I have no idea what the cadence of maturities look like of the U.S. commercial mortgage market"

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To: Johnny Canuck who wrote (55255)5/24/2022 1:29:20 PM
From: Johnny Canuck
   of 56054
 
Sales of newly built homes tumbled over 16% in April while prices soared
PUBLISHED TUE, MAY 24 202210:39 AM EDTUPDATED 2 HOURS AGO


Diana Olick @IN/DIANAOLICK @DIANAOLICKCNBC @DIANAOLICK

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KEY POINTS

Sales of newly built homes sank to the slowest rate since the start of the Covid pandemic.The median price of a new home sold in April was $450,600, an increase of nearly 20% from the year before.Slower sales caused the inventory of newly built homes to jump sharply as well to a nine-month supply. A six-month supply is generally considered balanced between buyer and seller.

WATCH NOW

VIDEO02:44
Sales of new homes fall 16.6% in April, well below expectations

Sales of newly built homes dropped 16.6% in April from March, far more than expected, and were down 26.9% from April 2021, according to the U.S. Census.

The annualized rate came in at 591,000 units, seasonally adjusted. Analysts had been expecting 750,000. March’s read was also revised lower.

That is the slowest sales pace since April 2020, when everything shut down at the start of the Covid pandemic. Sales surged quickly after that, as Americans sought bigger homes with outdoor spaces for quarantining.

These numbers are based on signed contracts during the month, not closings, so it is perhaps the most up-to-date indicator in the housing market. Mortgage rates, which have been rising since January, really shot up in April. The average rate on the 30-year fixed loan began the month at 4.88% and ended it at 5.41%, according to Mortgage News Daily.

Consumers are being hit by rising interest rates and four-decade-high inflation. That is making it even harder for them to afford today’s higher home prices. The median price of a new home sold in April was $450,600, an increase of nearly 20% from the year before.

“While new construction gained favor with many would-be buyers over the past two years due to the extreme shortage of existing homes for sale, the rising cost of a new home is now pricing many people out of the market,” said George Ratiu, senior economist at Realtor.com. “The market for new homes is mirroring broader real estate trends, as rising inflation is taking a bigger chunk out of Americans’ paychecks and surging borrowing costs are compressing homebuyers’ budgets.”

A stark pullback in demand, and not overconstruction, is hitting the market. Housing starts have actually been falling over the past few months. Slower sales caused the inventory of newly built homes to jump sharply to a nine-month supply. A six-month supply is generally considered balanced between buyer and seller.

Builders are also starting to see an uptick in cancellation rates. While those have not shown up in earnings releases yet, analysts who follow the builders are beginning to report it.

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To: Johnny Canuck who wrote (55280)5/24/2022 1:30:39 PM
From: Johnny Canuck
   of 56054
 
FOMC minutes out Wednesday.

Federal Reserve Board - Calendar

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To: Johnny Canuck who wrote (55281)5/24/2022 4:21:27 PM
From: Johnny Canuck
   of 56054
 
Meta, Alphabet, Apple — Tech stocks fell Tuesday following a warning from Snapchat that it’s likely to miss its own earnings and revenue targets for the current quarter. Shares of Apple, Alphabet, Twitter, Meta Platforms, Roku and Pinterest fell 1.9%, 5%, 5.6%, 7.6%. 13.7% and 23.6%, respectively.

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To: Johnny Canuck who wrote (55282)5/25/2022 2:31:37 AM
From: Johnny Canuck
1 Recommendation   of 56054
 
Index Update

Today is hard to read as the Fed minutes come out tomorrow. So trader may be profit taking in advance of the uncertainty of that even. Essentially traders will be looking for clues as the mindset of the Fed in regards to the trajectory of rate increases. It is given going there will at least be 3 to 5 rate increases depending on the inflation reading.

Beside this even today would have been considered a failed follow through of the rally on Monday.

SP500 close above the recent new low but below the high of yesterday. Usually a neutral reading as there was not follow though of Monday's rally.



DOW more positive as it barely close above the close of Monday. Technically building on the Monday rally
but just barely. No use reading too much into it.



DOW transports not as supportive as it close below the close of Monday. So far neutral but it can turn
negative fast if it close below the recent low.



DOW utilities breaking out of consolidation range to the upside. If it can build on this it means some traders then interests will be moving down 9 months out. To soon to call a trend.



COMPQ is in trouble. New closing low. If it confirms tomorrow expect accelerated selling in the sector.
A lot riding on Fed minutes and NVDA earning after the close tomorrow.



Russell 200 still showing stronger relative strength but just barely. The lack of ability to build on a rally in concerning. Fed minute is clouding the read for now.



Financial broke the upper downtrend line on Monday but the failure to follow through today leave the index vulnerabl to more downside. Neutral short term for now.



Energy uptrend still intact. Knocking previous high from last week. Expect more of a run
as driving season start this weekend in the USA.



Gold starting new run as the downtrend is broken and the short term rally is building on itself.



Silver following gold trend but struggling to get above previous support level. Still on the defensive for now.



Still expecting a statistically bounce this week but it might be very low and of a short duration, just enough to break the 7 weak down in a row trend and then a continuation of the downtrend. There is a lot riding on the Fed minutes tomorrow.

Running tight stop loss and SMH scalp. Might be stopped out tomorrow if poor guidance from Fed minutes or poor report from NVDA.

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To: Johnny Canuck who wrote (55283)5/25/2022 3:43:13 PM
From: Johnny Canuck
   of 56054
 
The Fed
Most Fed officials lean to 1/2-point interest rate hikes at ‘next couple of meetings’
Last Updated: May 25, 2022 at 3:21 p.m. ET
First Published: May 25, 2022 at 2:24 p.m. ET
By Jeffry BartashFollow
2
Some Fed officials says inflation may have peaked

Federal Reserve Chairman Jerome Powell and Vice Chairwoman Lael Brainard are intent on raising U.S. interest rates rapidly to squelch the highest U.S. inflation in 40 years. OLIVIER DOULIERY/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Referenced Symbols
SPX
1.03%
DJIA
0.70%
COMP
1.59%

Most senior officials at the Federal Reserve said 1/2-point increases in a key U.S. interest rate would “likely be appropriate at the next couple of meetings” as part of a two-pronged attack on high inflation.

After an expected series of rate hikes, minutes of the bank’s last strategy session in early May showed, Fed officials would reassess the economy to determine how much further they would go.

The main U.S. stock gauges SPX, 1.03% DJIA, 0.70% COMP, 1.59% were recently trading mostly higher after the release of the Fed minutes.

To combat high inflation, the bank raised the short-term fed funds rate by 50 basis points after its May 3-4 meeting. It was the second rate hike this year. The Fed also unveiled plans to sell off its massive long-term bond holdings in another move to push interest rates higher

Higher rates tend to slow the economy and inflation.

Wall Street expects the Fed to raise its benchmark rate that it kept near zero during the pandemic to above 3% by year end, but the minutes offered little insight on where the bank would end up.

“Participants agreed that the [federal Open Market] Committee should expeditiously move the stance of monetary policy toward a neutral posturing, the minutes said.

Previously the Fed viewed a benchmark rate of around 2.5% as neutral, but some members have recently suggested it might be higher.

The Fed minutes did raise the possibility of even higher rates. “A restrictive stance of policy may well become appropriate depending on the evolving economic outlook and the risks to the outlook.”

In Fed lingo, restrictive means interest rates are above what the central bank considers neutral.

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