August housing starts rose 2.3% to a 750,000 annual rate from a revised (lower) 733,000 rate in July. That was less than the 770,000 level expected. Permits dipped to an 803,000 annual rate from 811,000 in July, but those levels still imply further gains in starts in the months ahead. Starts are up from about a 575,000 rate in early 2009 but have a long way to go to get back to the 2 million plus rate of 2003 through 2007. Housing remains one of the strongest sectors of the US economy and this slightly disappointing data does not change the outlook. S&P futures did not react to this news.
Japan announced a dose of their own quantitative easing which boosted the Japanese stock exchange 1.2%. Other Asian exchanges were up slightly.
European stock exchanges are also up marginally. There is some talk about the Spanish 10-year yield again, as it backed up near 6% amid talk that Spain will have trouble actually getting a bailout, but at 5.81% today it is not a major concern
Microsoft (MSF) raised its dividend 15% and the stock now yields 2.95%.
For the second day in a row, there was significant call buying in Iamgold Corporation (IAG). Yesterday, there was an opening buyer of IAG Jan 30 calls 41,000 times. The stock is trading at about $15.80 currently.
Harmony Gold Mining Company (HMY) also saw 2.3x normal volume with the trading spread across several expirations all in the 10 strike calls. The options market is indicating investors should be long gold during a time of QE infinity.
5,248 Louisiana Pacific (LPX) Feb 15 calls traded with stock at $13.48 for $1.05, 5.6 times normal.