Stock markets dropped slightly this week – Following three straight weeks of gains, stocks retreated at the end of the week. The drop for the week was not significant, but stocks were up all week before retreating more sharply on Thursday and Friday. Key developments that caused investors to pull back were: U.S. China tensions are increasing over the accusations of China’s start, disclosure and response of the coronavirus. Chinese hacking and theft of intellectual property, including technology, business data, and coronavirus vaccine research. This led to an arrest of two Chinese Hackers and the U.S. ordering the Houston Chinese Consulate to shut down, which was followed by China closing a U.S. consulate in Chendgu. Jobless claims rose reversing eight weeks of steady employment gains gains. The senate failed to get a stimulus package passed. It is feared that a package may not pass before many provisions, including pandemic unemployment benefits expire next week. The Dow Jones Industrial Average closed the week at 26,469.89, down 0.8% from 26,671.95 last week. It’s down 7.3% year to date. The S&P 500 closed the week at 3,215.63 0.3% from 3,224.73 last week. It’s down 0.5% year to date. The NASDAQ closed the week at 10,363.18, down 1.3% from 10,503.19 last week. It’s up 15.5% year to date.
U.S. Treasury bond yields – The 10-year treasury bond closed the week yielding 0.59%, down from 0.64% last week. The 30-year treasury bond yield ended the week at 1.23%, down from 1.33% last week.
Mortgage rates – The July 23, 2020 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.01%, almost unchanged from 2.98% last week. The 15-year fixed was 2.54%, up from 2.48% last week. The 5-year ARM was 3.09%, up from 3.06% last week.
U.S. existing home sales rebounded at a record pace in June – The National Association of Realtors announced that total existing home sales, which include single family, condominium, townhomes, and co-ops, increased 20.7% in June from the number of sales in May. This reversed three months of sales declines caused by the pandemic. Real estate sales in all regions of the country reported record month over month increases in sales. The number of sales were still down 11.4% from the number of sales last June, but pending sales have increased and the N.A.R. and associations around the country expect sales to be back up to last years levels in the next two months. The median price paid for a home was up 3.5% from the price paid last June. Inventory levels dropped to a 4 month supply, down from 4.3 months one year ago.