Category: Economic Update

August new jobs disappoint – The Labor Department reported that The U.S. Economy added 157,000 non-farm jobs in August. Economists had expected a gain of 180,000 new jobs. The unemployment rate grew to 4.4% from 4.3% in July. Wage growth also stalled growing just .1% over July and up just 2.5% from last August. 

Stocks drop this week – Stock markets dropped this week following a disappointing August 2017 jobs report, and concerns about the cost of Hurricane Harvey and Hurricane Irma frightened investors. Investors were calmed by a deal to extend the debt ceiling and avoid a government shutdown for three months. The Dow Jones Industrial Average ended the week at 21,797.79, down from 21,978.56 last week. The S&P 500 closed the week at 2,461.43, down from its close last week of 2,476.55. The NASDAQ closed the week at 6,360.19, down from last week’s close of 6,435.33.   

Bond yields lower this week – Bond yields hit the lowest levels in over a year – The 10-year Treasury bond closed the week at 2.06%, down from 2.16% last week. The 30-year treasury yield ended the week at 2.67%, down from 2.76% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates near 18 month low – The September 7, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.78%, down from 3.82% last week. The 15-year fixed was 3.08%, down from 3.12% last week. The 5-year ARM was 3.15%, almost unchanged from 3.14% last week. Rates at the end of the week were slightly lower. 

Have a great weekend!
Syd

Stocks up again this week – Stock markets finish higher in August – Stocks finished higher for the second straight week. A revised second quarter GDP report revealed that growth reached 3% for the first time since 2015. Renewed reports of tax reform and better manufacturing data moved markets up this week – The Dow Jones Industrial Average ended the week at 21,978.56, up from 21,814.67 last week. The S&P 500 closed the week at 2,476.55, up from its close last week of 2,443.05. The NASDAQ closed the week at 6,435.33, up from last week’s close of 6,265.64.

Bond yields unchanged this week – Remaining near the lowest levels of the year – The 10-year Treasury bond closed the week at 2.16%, almost unchanged from 2.17% last week. The 30-year treasury yield ended the week at 2.76%, slightly up from 2.75% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates lower this week – The August 31, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.82%, down slightly from 3.86% last week. The 15-year fixed was 3.12%, down slightly from 3.16% last week. The 5-year ARM was 3.14%, down from 3.17% last week.

Economic update for the month ending August 31, 2017

The Dow Jones Industrial Average ended the month at 21,948.10, up from its July 31, 2017 close of 21,891.12.  The Dow is up over 11.3% year to date. The S&P 500 closed the month at 2,471.65, unchanged from its July close of 2,470.31. The S&P is up  10.5% year to date. The NASDAQ closed the month at 6,428.66, up from last month’s close of 6,348.12. It’s up 19.5% year to date. 

Treasury Bond yields drop in August – The 10-year Treasury bond closed on August 31, 2017 at 2.17%, down from 2.30% at the end of July.  The 30-year treasury yield ended the month at 2.73%, down from 2.89% last month.

Mortgage Rates remain near historic lows – The 30-year fixed mortgage rate remained under 4% in August. The August 31, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.82%, down from 3.93% on August 3, 2017. The 15-year fixed was 3.12%, down from last month’s close of 3.18%. The 5-year ARM was 3.14%, down slightly from 3.18% on August 3, 2017.

Existing home sales and prices higher in July than last July –Sales of existing homes in California totaled a seasonally annualized rate of 421,460 units in July, according to the California Association of Realtors. The number of sales of existing homes was down 4.9% from June’s sales pace. July’s sales pace was still 0.9% higher than last July. The statewide median price was $549,460, up 7.4% from July 2016.  There was a 3.2 month supply of homes for sale, up from 2.7 months in June, but down from 3.6 months in July 2016.

Fewer homes sold nationwide in July than June, yet still more than one year ago – The National Association of Realtors reported that total home sales slipped 1.3% in July from June’s sales pace level. Year-over-year the pace of home sales were still 2.1% higher than last July. Prices have continued to rise. The median price was 6.2% higher this July than July 2016. That marked the 65th straight month of year-over-year price increases. Inventory levels continued to shrink. The number of homes for sale nationwide was down 9% from one year ago. The unsold inventory nationwide represents a 4.2 month supply. That is down from a 4.8 month supply last July. Tight supply is causing prices to rise. Total existing home sales include all re-sale single family one to four unit homes, condominiums, co-ops, and town homes.

Home affordability slips in California as prices rise – The California Association of Realtors reported that  29% of California households could afford to buy a $559,260 median-priced home in the second quarter. That is down from 32% in the first quarter of 2017 and 31% one year ago in Q2 2016. The annual income required to purchase the median-priced home was $110,780. They found that 38% of California households were able to purchase a median-priced condominium or town-house, which was $443,400. The annual income required was $88,870.

We are waiting for job gain numbers which will be out next Friday. That’s a good indicator of where the economy is heading.

Have a great holiday weekend!

Syd

Stocks higher this week – Stocks rose this week after two previous weeks of declines. Stocks have performed strongly in the first two thirds of the year. Stock market indexes, while off the record highs hit just a few weeks ago, have logged double digit gains for the first time since 2013. The Dow Jones Industrial Average ended the week at 21,814.67, up from 21,674.51 last week. The S&P 500 closed the week at 2,443.05, up from its close last week of 2,426.55. The NASDAQ closed the week at 6,265.64, up from last week’s close of 6,216.53. 

Bond yields almost unchanged this week – Remaining near the lowest levels of the year – The 10-year Treasury bond closed the week at 2.17%, almost unchanged from 2.19% last week. The 30-year treasury yield ended the week at 2.75%, slightly down from 2.78% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates remain under 4% – The 30-year fixed rates are about the lowest they have been in almost a year. Short term rates have risen. The August 24, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.86%, down slightly from 3.89% last week. The 15-year fixed was 3.16%, down slightly from 3.17% last week. The 5-year ARM was 3.17%, up slightly from 3.16% last week. 

Fewer homes sold nationwide in July than June, yet still more than one year ago – The National Association of Realtors reported that total home sales slipped 1.3% in July from June’s sales pace level. Year-over-year the pace of home sales were still 2.1% higher than last July. Prices have continued to rise. The median price was 6.2% higher this July than July 2016. That marked the 65th straight month of year-over-year price increases. Inventory levels continued to shrink. The number of homes for sale nationwide was down 9% from one year ago. The unsold inventory nationwide represents a 4.2 month supply. That is down from a 4.8 month supply last July. Tight supply is causing prices to rise. Total existing home sales include all re-sale single family one-to-four unit homes, condominiums, co-ops, and town homes. 

Have a great weekend!
Syd

Stocks drop this week – This week the latest companies to report second quarter corporate earnings had disappointing results. Snap Inc., the owner of Snapchat saw a loss of nearly 20% after its quarter loss grew. That affected many stocks in the tech sector. JC Penny also had a disappointing quarter. It’s stock dropped to an all time low. This put pressure on retail stocks. Some analysts attributed the drop on geopolitical conditions due to rhetoric with North Korea. Year-to-date the Dow is up 10.6%, the S&P is up 9% and the NASDAQ is up 16.3%, so some profit taking is expected. The Dow Jones Industrial Average ended the week at 21,858.33, down from 22,092.82 last week. The S&P 500 closed the week at 2,441.33, down from its close last week of 2,476.83. The NASDAQ closed the week at 6,256.56, down from last week’s close of 6,351.56.

Bond yields drop this week – The 10-year Treasury bond closed the week at 2.19%, down from 2.27% last week. The 30-year treasury yield ended the week at 2.79%, down from 2.84% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates down slightly this week – The August 10, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.90%, down slightly from 3.93% last week. The 15-year fixed was 3.18%, down from 3.18% last week. The 5-year ARM was 3.14%, almost unchanged from 3.15% last week. Rates dropped late in the week. Next week’s survey rates should be even lower. 

Home affordability slips in California as prices rise – The California Association of Realtors reported that 29% of California households could afford to buy a $559,260 median-priced home in the second quarter. That is down from 32% in the first quarter of 2017 and 31% one year ago in Q2 2016. The annual income required to purchase the median-priced home was $110,780. They found that 38% of California households were able to purchase a median-priced condominium or town-house, which was $443,400. The annual income required was $88,870. 

Have a great weekend!
Syd

209,000 new jobs added in July – Figures released from The Department of Labor reported that U.S. employers added 209,000 new jobs in July. This beat analysts expectations of 183,000 jobs. Job growth, which slowed earlier in the year, rebounded in June and July with the economy adding about 440,000 new jobs in 60 days and about 1.1 million new jobs for the first 7 months of 2017. The unemployment rate dropped to 4.3%, its lowest level since March 2001, from 4.4% in June. Average hourly wages grew 2.5% from last July. 

GDP up in second quarter. The gross domestic product, which is the broadest measure of the economy, was up 2.6% in the second quarter of 2017. That was in line with expectations, but represented a rebound from just a 1.4% increase in the first quarter where it looked like the economy was slowing. While still below the growth of 3% the government is shooting for it was a positive sign for investors. 

Dow ends week at record high – Solid earnings has propelled stocks bringing all indexes at or near record highs. With about 75% of companies reporting, earnings are up 10.1% year over year, beating estimates of a 6.4% increase. Other news had a rebound in the GDP in the second quarter, higher consumer confidence, and positive news from Europe and Asia whose economies have strengthened. The Dow Jones Industrial Average ended the week at 22,092.82, up from 21,830.21 last week. The S&P 500 closed the week at 2,476.83, up from its close last week of 2,472.10. The NASDAQ closed the week at 6,351.56, down from last week’s close of 6,374.78. 

Bond yields drop slightly this week- The 10-year Treasury bond closed the week at 2.27%, down from 2.30% last week. The 30-year treasury yield ended the week at 2.84%, down from 2.89% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates remain low – The August 3, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.93%, unchanged from 3.92% last week. The 15-year fixed was 3.18%, down from 3.20% last week. The 5-year ARM was 3.15% down from 3.18% last week. 

Have a great weekend!
Syd

Stock markets mixed this week – The Dow was up as corporate earnings of DOW companies are beating expectations. The Nasdaq and S&P were unchanged. The Dow Jones Industrial Average ended the week at 21,830.21, up from 21,580.07 last week. The S&P 500 closed the week at 2,472.10, unchanged from its close last week of 2,472.55. The NASDAQ closed the week at 6,374.78, almost unchanged from last week’s close of 6,387.75.  

Bond yields rise this week– The 10-year Treasury bond closed the week at 2.30%, up from 2.24% last week. The 30-year treasury yield ended the week at 2.89%, up from 2.81% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates lower this week– The July 27, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.92%, down from 3.96% last week. The 15-year fixed was 3.20%, down from 3.23% last week. The 5-year ARM was 3.18%, down from 3.21% last week. 

U.S. existing home sales drop in June, but still higher than 2016 levels – Prices continue to rise – The National Association of Realtors reported that existing home sales, which are completed transactions that include single-family homes, town-homes, condominiums, and co-ops, decreased 1.8 percent to a seasonally adjusted annual rate of 5.52 million in June from 5.62 million in May. Despite last month’s decline, June’s sales pace is 0.7% above a year ago, but is the second lowest of 2017 (February, 5.47 million). We are still on pace for either the most sales ever in the U.S. The median price for an existing-home in June was up 6.5% from June 2016. June marked the 64th straight month of year-over-year price gains. Total housing inventory at the end of June declined 7.1% from last June’s level. The number of homes for sale has fallen year-over-year for 25 consecutive months. Unsold inventory is at a 4.3-month supply at the current sales pace, which is down from 4.6 months a year ago. 

New home sales rise in June – The Commerce Department reported that sales of new homes rose 0.8% in June from May’s sales levels. Year over year new home sales are a staggering 9.1% higher than the number of new home sales last June. New home sales in the west increased 12.5% to the highest number of new home sales since July 2007. 

Have a great weekend!
Syd

Stocks almost unchanged this week – In a calm week, the S&P and Nasdaq remained at record highs while the Dow was slightly lower than the record highs of last week. The Dow Jones Industrial Average ended the week at 21,580.07, down from 21,637.74 last week. The S&P 500 closed the week at 2,472.55, up from its close last week of 2,459.27. The NASDAQ closed the week at 6,387.75, up from last week’s close of 6,312.47. 

Bond yields drop this week – The 10-year Treasury bond closed the week at 2.24%, down from 2.33% last week. The 30-year treasury yield ended the week at 2.81%, down from 2.91% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage rates lower this week week – The July 20, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.96%, down from 4.03% last week. The 15-year fixed was 3.23%, down from 3.29% last week. The 5-year ARM was 3.21%, down from 3.27% last week. 

L.A. County unemployment rate unchanged in June – The unemployment rate remained at a record low of 4.4% in June. A year ago, the unemployment rate stood at 5.2%. 

California existing home sales and prices up in June – The California Association of Realtors announced that sales of existing, single-family detached homes totaled a seasonally adjusted annualized rate of 443,150 units in June. The statewide sales figure represents what would be the total number of homes sold during 2017 if sales maintained the June pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales. The June figure was up 3.3% from the revised 428,890 level in May and up 2.4% compared with home sales in June 2016 of a revised 432,880. Year-to-date sales are running 3.2% ahead of last year’s pace.  

The statewide median price was up 0.9% from a revised $550,080 in May to reach $555,150 in June, and was 7.0% higher than the revised $518,830 recorded in June 2016. The median sales price is the point at which half of homes sold for more and half sold for less. 

Foreign home buyers set U.S. record – The National Association of Realtors announced that foreigners purchased 284,455 residential properties in the 12 months ending March 31, 2017. That’s an increase of about 34% from the same period one year ago. The dollar volume surged nearly 50% to $153 billion. That was a new record. Chinese nationals purchased $31.7 billion worth of residential properties, up from $27.3 billion one year earlier. The group with the largest increase was Canadians, who purchased $19 billion worth of residential properties, up from $8.9 billion in the 12 months ending March 31, 2016. It was a dramatic jump considering that the strong U.S. dollar makes properties more expensive. Foreign buyers spent $35 billion on California residential properties. That was up from $27 billion one year earlier. Asian buyers represented 71% of foreign buyers in California, up from 51% a year earlier. 

Stock markets end week at record highs – The S&P and the Dow set records this week as stocks climbed Wednesday, Thursday and Friday. The start of second quarter earnings season began Friday. Earnings of companies in The S&P were up 15.3%. The rise was across the board fueled by several sectors. Energy stocks climbed as crude oil prices rose. Technology and healthcare companies saw modest gains. Retail rebounded after analysts upgraded the sector following encouraging news from Target and others. This calmed investors who brushed off a report that showed retail was weaker in June. Financials were also up as several big banks reported second quarter earnings that beat expectations. The Dow Jones Industrial Average ended the week at 21,637.74, up from 21,414.34 last week. The S&P 500 closed the week at 2,459.27 unchanged from its close last week of 2,425.18. The NASDAQ closed the week at 6,312.47 up from last week’s close of 6,153.08.

Bond yields drop this week- Federal Reserve chairwoman Janet Yellen spoke earlier in the week. In her comments it appeared that the Fed plans to slow down the pace of interest rate increases. The Fed has raised its benchmark rates three times since December. She also stated that the economy was healthy, but reiterated that inflation was well below the Fed’s target level. The 10-year Treasury bond closed the week at 2.33%, down from 2.39% last week. The 30-year treasury yield ended the week at 2.91%, down from 2.93% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates higher this week – The July 13, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.03%, up from 3.96% last week. The 15-year fixed was 3.29%, up from 3.22% last week. The 5-year ARM was 3.27%, up from 3.31% last week. Unfortunately, rates rose late in the week so next weeks rates will be higher. 

Consumer prices flat in June – U.S. Consumer prices slowed to a 1.6% growth rate for the 12 months ending June 30. This was down from an already stubborn inflation rate of 1.9% in May. The core inflation rate, which excludes food and energy was unchanged at 1.7%. Analysts expect that this low inflation rate will prompt the Fed to hold off on any interest rate hikes, at least for now. 

Have a great weekend! 
Syd

Employers add 222,000 jobs in June – Hiring rebounded in June, according to The Bureau of Labor Statistics, as employers added 222,000 new jobs. Although the unemployment rate ticked up to 4.4% in June from 4.3% in May, a 16-year low, this was a solid report which beat expectations after a disappointing three months of job growth. The labor-force participation rate grew from 67.7% in May to 67.8% in June as more people entered the work force. Wages grew 0.2% in June from May and are up just 2.5% over the last 12 months. That’s well below average wage growth and still stumping experts. It’s highly unusual to have low unemployment without healthy wage growth. 

Stocks higher this week – Stocks rallied after Friday’s jobs report. After a lackluster week in which disappointing auto sales, weakness in “brick and mortar” retail, and pressure on tech firms, stocks rebounded as more workers than expected were hired in June. The Dow Jones Industrial Average ended the week at 21,414.34, up from 21,349.63 last week. The S&P 500 closed the week at 2,425.18, unchanged from its close last week of 2,423.41. The NASDAQ closed the week at 6,153.08, up from last week’s close of 6,140.42. 

Bond yields higher again this week– The 10-year Treasury bond closed the week at 2.39%, up from 2.31% last week. The 30-year treasury yield ended the week at 2.93%, up from 2.84% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates higher this week– The July 6, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.96%, up from 3.88% last week. The 15-year fixed was 3.22%, up from 3.18% last week. The 5–year ARM was 3.21%, up from 3.18% last week. Unfortunately, rates rose late in the week so next weeks rates will be higher. 

Have a great weekend! 
Syd

For the week ending June 31, 2017 – The Dow Jones Industrial Average ended the week at 21,349.63, down slightly from 21,394.76 last week. The S&P 500 closed the week at 2,423.41, down from its close last week of 2,438.30. The NASDAQ closed the week at 6,140.42, down from last week’s close of 6,265.25.

Bond yields up in last week of month – The 10-year Treasury bond closed the week at 2.31%, up from 2.15% last week. The 30-year treasury yield ended the week at 2.84%, up from 2.71% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.

Mortgage Rates almost unchanged this week – The June 29, 2017, Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.88%, almost unchanged from 3.90% last week. The 15-year fixed was 3.18%, almost unchanged from 3.17% last week. The 5-year ARM was 3.18%, also unchanged from 3.14% last week. Unfortunately, rates rose late in the week so next week’s rates will be higher.

Have a great holiday weekend!

Syd