03.02.2024 Another Winning Week For Stock Market

Shadow War With Iran Risks Turning Into a Direct Conflict:

President Biden has approved plans for multiday strikes in Iraq and Syria against multiple targets, including Iranian personnel and facilities, according to U.S. officials. But the response, expected to begin as soon as this weekend, will be “tiered,” mixing military actions with other steps that can be adjusted to signal that Washington doesn’t seek further escalation. The goal, U.S. officials say, is to get Iran and its proxies to dial back their attacks across the region as the White House and its allies pursue talks on a cease-fire between Hamas and Israel that they hope will de-escalate tensions. The strikes are in response to a drone strike by Iranian-backed militias that killed three American soldiers last weekend. Iran has sent its own signals, insisting it didn’t order the attack and warning that U.S. reprisals against Iranian territory or personnel deployed around the region would prompt it to strike back. By signaling its intention well in advance of any strikes, the White House may give Iran time to reposition personnel and equipment, limiting the effectiveness of the U.S. attacks, analysts said. But it could also ease pressure on Tehran to respond. Source WSJ

Cheap Canadian Oil Might Find New Home, Could Cause Jump in US Gas Prices:

Drivers in the Midwest may soon have to pay a bit more for gas at the pump. The reason? Cheap Canadian oil will soon have a new set of buyers. Canadian oil companies will soon have the option to ship crude through a long-delayed, 715-mile pipeline expansion to the Pacific Ocean. That will allow traders to sell more oil to the U.S. West Coast and to fast-growing Asian economies. The Trans Mountain expansion, which will nearly triples the capacity of an existing pipeline to 890,000 barrels a day, promises to give Canadian companies more pricing power and boost the country’s position as a global energy powerhouse. This is a big deal that’s been 10 years in coming, said Kevin Birn, an analyst with S&P Global Commodity Insights. It does allow Canada, for the first time in its history, as the fourth-largest oil producer in the world, direct access to international markets. But this could come at the expense of Canada’s largest trading partner, the US. Keep in mind, that Americans have continued to guzzle Canadian oil even as US crude output has ballooned in recent years. Oil imports from Canada into the US surpassed +4 million barrels a day during some months last year. Interestingly, Benchmark Canadian crude cost about $18 a barrel less than its US counterpart. Back in 2018 it was running more than -$40 less than US crude.  Source WSJ

U.S. Job Cuts More

Than Double in January: Job cut announcements in January increased to its highest level in 10 months as employers in the financial and technology sectors launched restructuring efforts. Announced layoffs reached 82,307 in January, a +136% surge from December’s 34,817, according to recent data. It was the highest monthly total since March 2023. Employers in the financial industry announced 23,238 job cuts, more than double the number from a year earlier.  Source Yahoofinance

Cash Bids Help Drive Luxury Home Prices to All-Time Highs:

Prices of luxury homes rose at twice the pace of non-luxury homes at the end of 2023, partly because elevated mortgage rates are irrelevant to many affluent buyers. Low inventory is another factor driving prices up: Even though luxury new listings rose, overall supply is still below pre-pandemic norms. The typical U.S. luxury home sold for a record $1.17 million in the fourth quarter, up +8.8% from a year earlier. Prices of non luxury homes increased at half the pace, rising +4.6% year over year to a record $340,000. A record-high share of all-cash luxury home purchases drove the relative strength of the high-end housing market: Nearly half (46.5%) of the fourth quarter’s luxury purchases were made in cash, up from 40% a year earlier. Low inventory is another factor pushing luxury prices up. Even though the supply of luxury homes surged from a year earlier, it’s still well below pre-pandemic levels, leading to competition from well-heeled buyers over a limited number of homes. New listings of luxury homes jumped 19.7% year over year in the fourth quarter, the biggest increase in over two years. The increase brings the number of U.S. new luxury listings to just under 53,000, comparable to fourth-quarter levels in 2018 and 2019, just before the pandemic started.  Source Redfin

One of America’s Hottest Commodities Is Probably in Your Trash:

Paper mills at home and abroad are gobbling up America’s recycled cardboard, driving up prices for old pizza boxes and other corrugated containers that they pulp and make into new packaging. The price of old corrugated containers, or OCC, surged during the pandemic e-commerce boom and then came crashing down in 2022 when rising interest rates prompted businesses to slow ordering and reduce inventories. Over the past year, though, OCC prices have rebounded, more than tripling in some parts of the country. The latest rise is being driven by the opening of several new mills that need used cardboard to make fresh containerboard for corrugated shipping boxes and paperboard, which is folded into cereal boxes and coffee cups. Mills are vying for recycled boxes at a time when there are fewer available because of lower cardboard production while businesses were destocking. Meanwhile, recent research suggests that Americans aren’t recycling nearly as many of their old boxes as they could, particularly at home. Source WSJ