Daily Market Color July 19, 2016Strong Housing Data and Mixed Stock Market Action Overnight, most European and Asian stock markets fell about ½%, with the exception of the Nikkei which was up a little more than 1%. In the US, the Dow Jones is unchanged with quarterly earnings exceeding expectations reported by Johnson & Johnson and sales increasing for IBM Corp, offset by Netflix stock dropping 13% after a disappointing growth in subscriptions – which is currently pulling the NASDAQ into negative territory. Goldman Sachs Group Inc. posted a 74% profit increase as fixed income trading revenue exceeded analysts’ expectations for the quarter. Meanwhile investment in U.S Treasurys is up on the day. Increased demand for US bonds has pushed yields down across the board, as the closely watched 10Y US Treasury yield has dropped back to 1.55%. The Republican National Convention, which thankfully has been peaceful so far, is taking up a lot of the news reporting this week, but its impact on the financial markets appear to be negligible. The new US housing data released this morning saw an increase in both housing starts and housing permits. A 4.8% increase in housing starts, significantly exceeding the survey estimate of 0.2%, indicates residential real estate has some momentum moving into the end of the peak home buying season. Limited land supply and tight credit standards will somewhat dampen US job gains and recent wage growth keeping real estate demand afloat. Treasury and swap yields are 1-3 basis points lower across the curve. Most commodity prices are lower on the day, with WTI and Brent down 1% and 0.5% respectively, and corn and wheat prices down 4% and 3% respectively.