The markets are headed towards new highs at midday on continued hopes that a tax overhaul is closer to become a reality.  Advancers led decliners 1632/1224 on the NYSE and 1766/1021 on the NASDAQ.  Currently, the DOW is on track to close up almost 2% on the week (1.86% now).

On the economic front, existing home sales unexpectedly increased 0.7% in September to a rate of 5.39 million as the impact of Hurricane Harvey and Irma start to subside.  However, this was the second slowest pace in over a year, and 1.5% below the prior year period.  Economist had forecasted sales dropping 1% to 5.30 units.  Supply constraints and higher prices are impacting affordability, especially where it’s most crucial, the first time homebuyers, who represented the lowest share of purchases since September 2015.

Highlights:

• Median existing single-family home price up 4.2% year over year to $246,800
• Inventory of 1.90 million homes for sale at the end of September +6.4%
• Supply of 4.2-month supply compared to 4.5 months a year
• First-time buyers were 29% of sales in September compared to 31% in August
• All-cash sales were unchanged at 20% of transactions in September

The lack of supply continues to fuel the homebuilders and their share prices.  As a matter of fact, the U.S. Home Construction ETF, ITB, is at a 10-year high. 

Oil prices are relatively flat today. The latest release from Baker Hughes shows that U.S. oil rigs fell for the third week in a row down 7 to 736.  WTI is currently trading at $51.22.

Let’s keep our powder dry heading in the weekend.  Have a good one.