Yesterday Congress did indeed find a way to pass a bill that extends government funding from today’s December 22 deadline until January 19. Congress achieved this goal by punting on just about everything.
Can Congress pass a bill, any bill, to keep the government funded past December 22? Maybe. If members of the House and Senate are so exhausted by the endless wrangling over Obamacare and tax cuts that they’ll pass just about anything to get out of town without shutting down the government.
Prices on U.S. Treasuries fell and yields rose for a fifth straight day. The yield on the 10-year U.S. Treasury rose 3 basis points to 2.50%. In the last month the yield on the 10-year Treasury has climbed 13 basis points. The yield on the two-year Treasury is up 11 basis points in the same period.
Neither an interest rate increase from the Federal Reserve nor new limits on the deductibility of mortgage interest deterred home builders in November. Residential construction starts rose 3.3% to a 1.3 million annualized rate, above the 1.26 million (revised downward) rate in October.
Reports on home sales this week will get more attention than usual given the cuts to the mortgage deduction in the tax bill that moved out of the Senate/House conference committee last week. Worries about the pace of home sales manage to combine uncertainty about the effects of the Republican tax plan and the impact of higher interest rates from the Federal Reserve. Investors are watching the housing numbers as an early indicator of any weakness in the general economy.
In my daily trawling through the market I come upon lots of tidbits of knowledge that I think are important to investors but that don’t justify a full post. I’ve decided to start compiling these notes here each day in a kind of running mini blog that I’m calling Notes You Need. A typical item would resemble this from today: “10:40 a.m.: Costco (COST) is up almost 5% this morning after releasing earnings for the fiscal first quarter after the close yesterday and showed the company is doing just fine in the face of competition from Amazon (AMZN) Sales climbed 13.3% in the first quarter with a 43% increase in e-commerce sales.”Â
Just about everything is up today on news that Senator Marco Rubio has changed a possible “No” from Thursday into a “Yes” vote today. The tax cut bill now looks extremely likely to move out of conference committee and to pass the Senate–the major obstacle–and wind up on President Trump desk for his signature before Christmas..
No one should be surprised that U.S. oil shale producers are increasing production in reaction to higher oil prices after OPEC’s production cuts. The speed and the dimension of the increase, however, is more than previously hoped.
