The US markets closed higher on Monday, with the Dow industrials posting a 12th straight record close as investors await a speech Tuesday night by President Donald Trump, in which he is expected to touch on plans for overhauling the tax code and health-care system. The Atlanta Federal Reserve’s GDP Now forecast model showed that the US economy is on track to grow at a 2.5 percent annualized pace in the first quarter following the latest data on home sales released last week. The latest first-quarter gross domestic product estimate was higher than the 2.4 percent growth rate calculated on February 16. The regional central bank said its forecast for first-quarter real residential investment growth rose to 10.8 percent from an earlier estimate of 7.8 percent based on January’s figures on new and existing home sales. Dallas Fed President Robert Kaplan said that the US Federal Reserve might need to raise interest rates in the near future to avoid falling behind the curve on inflation. Kaplan, who is a voting member on the central bank’s rate-setting committee this year, clarified a point he has made several times in recent weeks that a rate increase should come sooner than later. Kaplan did not specify at which policy meeting he thought the Fed should raise rates. Kaplan added that US consumers were positioned to push the economy to grow more than 2 percent this year.
On the economy front, business investment got off to a poor start in 2017 aside from the aerospace industry, perhaps a sign business are awaiting new policies by the Trump administration before acting. Orders for durable goods climbed 1.8% in January, but the gain was due entirely to a spike in contracts for commercial jets and military planes. The increase in January was fueled by a 70% jump in orders for passenger planes and a 60% advance in bookings for fighter jets and related military goods. Orders for new cars and trucks also edged up by 0.2%. Meanwhile, shipments of core capital goods, a category used to help determine gross domestic product, fell a somewhat steeper 0.6% in January. All numbers are seasonally adjusted.
Meanwhile, a gauge of pending home sales slumped in January as the market succumbed to inventory that’s too low to satisfy demand. The National Association of Realtors’ index fell 2.8% to 106.4, the lowest since last January. It’s 0.4% above the 106.0 it reached then. The index forecasts future sales by tracking real estate transactions in which a contract has been signed, but the deal has not yet closed. Contract activity was mixed in January. The index covering the Northeast rose 2.3% to 98.7, while activity in the South rose 0.4% to 122.5. In the Midwest, the index declined 5.0% to 99.5, and in the West, the index tumbled 9.8% to 94.6. Prices rose 7.1% compared to a year ago for sales that closed in January.
The Dow Jones Industrial Average added 15.68 points or 0.08 percent to 20,837.44, Nasdaq was up 16.59 points or 0.28 percent to 5,861.90, while S&P 500 gained 2.41 points or 0.10 percent to 2,369.75.
The Indian ADRs closed mostly in red; Tata Motors was down 0.32%, ICICI Bank was down 0.16% and HDFC Bank was down 0.03%. On the other hand, Wipro was up 0.04% and Dr. Reddy’s Lab was up 0.03%.