The Dow traded off 196 on lighter trading volume to close the day at 24,461. The key here was the lower trading volume which shows the big boys were not rushing to the exits. Markets today fell on trade war issues. It appears China has been trying to export steel through the back door of Canada and Europe into the US, but the global steel tariffs are preventing that and forcing Japan, Canada and Europe to address the longstanding problem of China’s steel production overcapacity and its creative ways of selling it globally. Banks were higher as stress test results are soon to be released with an expected flood of dividends to follow.
While the month of May saw strong new US home sales it also saw weak existing home sales. The NAR or National Association of Realtors said that existing home sales fell 0.4% in May and have now declined for the third consecutive month. The main culprits include a lack of inventory, higher interest rates and an apparent shift in taste toward newer more modern designs. Inventories were down 6.1% over the past year and are now at the lowest point since records began being kept in 1999. The median sales price is up 4.9% from a year ago and indications are that people are trading up or shifting to expensive modern homes across all markets.
Shares of grocery store chain Kroger, which owns QFC, Ralphs and Fred Meyer, gained 9% after reporting better than expected earnings. The company attributed the outperformance to a 66% increase in online sales and delivery services which, CEO Rodney “bag boy” McMullen said are imperative if they expect to survive and thrive in the new world created by Amazon. For the quarter Kroger posted a 3% revenue gain and a 23% increase in bottom line profits.