| This week major stock market indexes jumped, and bond yields settled as investors have become less uncertain about the economy. Following the April 2nd announcement of tariffs on about 90 countries which panicked investors and markets worldwide, there have been a lot of developments which have calmed the markets. On April 9th, following the initial sell off, President Trump announced a 90-day pause on almost all countries except China. An all-out Trade war followed with China raising their tariffs and Trump raising tariffs to 145% on all goods coming from China. Over the last two weeks, both sides have toned down the rhetoric as economic forecasts for both countries were not positive. On April 12th President Trump exempted smartphones, computer monitors, chips, and various electronics from the 145% tariffs on Chinese goods. Administration officials have spoken about progress in trade negotiations. This has calmed investors from their initial panic. Last week President Trump spoke about firing Fed Chairman Powell, who he referred to as a loser. Investors again became less optimistic, stock markets dropped, and bond yields and interest rates jumped, but on Tuesday President Trump said that “he has no intentions of firing Powell.” On Wednesday Treasury Secretary Scott Bessent said, “There was an opportunity for a big deal” on trade between the U.S. and China in his address to the Institute of International Finance. On Friday, President Trump said that he has negotiated 200 trade deals that would be completed within three to four weeks. Investors, world leaders, economists, and consumers are feeling better about the ramifications of the tariffs than they were when the initial announcement was made on April 2nd.
Stocks Markets – The Dow Jones Industrial Average closed the week at 40,113.50, up 2.5% from 39,142.23 last week. It is down 10% from 44,544.66 on December 31, 2024. The S&P 500 closed the week at 5,525.21, up 4.6% from 5,282.70 last week. The S&P is down 8.7% from 6,040.53 on December 31, 2024. The Nasdaq closed the week at 17,382.94, up 6.7% from 16,286.45 last week. It is down 11.4% from 19,627.44 on December 31, 2024. U.S. Treasury bond yields jump – The 10-year treasury bond closed the week yielding 4.29%, down from 4.34% last week. The 30-year treasury bond yield ended the week at 4.74%, down from 4.80% last week. We watch bond yields because mortgage rates follow bond yields. Mortgage rates – Every Thursday Freddie Mac publishes interest rates based on a survey of mortgage lenders throughout the week. The Freddie Mac Primary Mortgage Survey reported that mortgage rates for the most popular loan products as of April 24, 2025, were as follows: The 30-year fixed mortgage rate was 6.81%, nearly unchanged from 6.83% last week. The 15-year fixed rate was 5.94%, downfrom 6.03% last week. The graph below shows the trajectory of mortgage rates over the past year.
U.S. existing-home sales March 2025 – The National Association of Realtorsreported that existing-home sales totaled 4.04-million units on a seasonal annualized rate in March, down 5.9% month-over-month from an annualized rate of 4.26-million units in February. Year-over-year sales slipped 2.4% from an annualized rate of 4.12 million units. The median price for a home sold in the U.S. in March was $403,700, up 2.7% from $392,900 one year ago. There was a 4-month supply of homes for sale in February, up from a 3.2-month supply one year ago. First-time buyers accounted for 32% of all sales. Investors and second-home purchases accounted for 15% of all sales. All cash purchases accounted for 26% of all sales. Foreclosures and short sales accounted for 2% of all sales. Have a Great Weekend! |
Economic Update | Week Ending April 26, 2025
