Dow edged up 82, advancers over decliners 3-2 & NAZ fell 17.  The MLP index was even at 240 & the REIT index added 2 to the 386s.  Junk bond funds were steady & Treasuries saw buying which lowered yields.  Oil slid back to the 78s & gold went up 10 to 1974 (more on both below). 

AMJ (Alerian MLP Index tracking fund)

Fed approves hike that takes interest rates to highest level in more than 22 years

Sales of new US homes fell in Jun for the first time in 4 months, suggesting that high mortgage rates & limited supply are continuing to sideline would-be buyers.  New single-family home purchases tumbled 2.5% to a seasonally adjusted annual rate of 697K units, the Commerce Dept reported.  The forecast expected new home sales, which account for a small percentage of total sales, to come in at a rate of 725K units.  Despite the decline, sales remain up about 23.8% from a year ago.  "With inventory of existing homes dwindling, many home shoppers are turning up empty-handed," said Nicole Bachaud, Zillow senior economist.  "Those buyers who turn to the new construction market are seeing more available options to snatch up, leading to strong new home sales compared to a year ago."  At the current pace of sales, it would take roughly 7.4 months to exhaust the inventory of existing homes.  Experts view a pace of 6-7 months as a healthy level.  Still, the pullback in sales indicates that steep borrowicastng costs & elevated prices are weighing on the housing market by boxing out potential buyers.  The median price for a new home fell to $415K from the previous year, but that is far higher than the typical pre-pandemic level.  The Federal Reserve's aggressive interest-rate hike campaign sent mortgage rates soaring above 7% last year for the first time in nearly 2 decades, cooling the red-hot housing market.  Rates on the popular 30-year fixed mortgage are currently hovering around 6.78%, according to Freddie Mac, well above the 5.54% rate recorded one year ago & the pre-pandemic average of 3.9%.  On an annual basis, existing home sales are down 18.9% when compared with Jun 2022.  "There are simply not enough homes for sale," said Lawrence Yun, chief economist at NAR.  "The market can easily absorb a doubling of inventory."

New home sales drop as affordability issues plague would-be buyers

High interest rates aren't souring Americans' moods.  A key measurement of consumer confidence just shot up to a level not seen since Jul 2021.  The Conference Board's monthly Consumer Confidence Index hit 117 in Jul, rising from 110.1 the month before.  The index increased for the 3rd consecutive month, bounding even higher after a sharp swing upward in Jun.  The forecast expected the index to climb to 111.8.  A strong labor market & cooling inflation are helping to keep Americans upbeat about both the current & near-term prospects of the economy, according to the report.  “Headline confidence appears to have broken out of the sideways trend that prevailed for much of the last year,” said Dana Peterson, chief economist at the Conference Board.  “Greater confidence was evident across all age groups, and among consumers earning incomes less than $50,000 and those making more than $100,000,” she added.  While recession fears are still in the back of consumers' minds, the proportion of consumers who think a downturn is “somewhat” or “very likely” ticked up to 70.6% from 69.9 up from 69.9%, a closely watched indicator is no longer flashing warning signs.  Both components of the headline gauge not only recorded gains for Jul, but marked some milestones.  The present situation index reached a level of 160, the highest since Mar 2020 & the expectations index bumped up for a 2nd consecutive month, landing at 88.3, which is well above the 80 level that historically signals an impending recession.

US consumer confidence jumps to highest level since July 2021

Gold prices settle higher, extend gains after Fed decision to raise rates

US oil prices settled with a loss for the first time in 5 trading sessions.  Prices held onto their losses after the Federal Reserve raised its benchmark interest rate, as expected.  Traders also weighed data from the Energy Information Administration showing smaller-than-expected weekly declines for US crude, gasoline & distillate supplies.  West Texas Intermediate crude for Sep declined by 85¢ (1.1%) to settle at $78.78 a barrel.

U.S. oil futures mark first loss in 5 sessions

Dow jumped 150 after the interest rate hike was announced & then gave back much of that in the last hour of trading.  The Fed will continue to monitor economic data.  Gross Domestic Product, 2nd Quarter 2023 (Advance Estimate) will be released tomorrow & that should generate some excitement in the stock market.  As stated above, it is expected to show modest growth.

Dow Jones Industrials