August 30, 2017
The second read on second quarter 2017 Gross Domestic Product (GDP) rose to 3% from the initial read of 2.6%. The boost was fueled by a pop in consumer spending to 3.3% from 2.8% and an increase in business spending. Consumer spending makes up two-thirds of the U.S. economy. The 3% boost in GDP was the best reading since the 3.2% registered in the first quarter of 2015. GDP is the monetary value of all the finished goods and services produced within a country’s borders in a specific time period. It is considered the broadest measure of economic activity.
Job growth in the U.S. continued to be a bright spot in the U.S. economy in August due in part to solid gains in manufacturing and construction jobs. The ADP Private Payrolls Report for August showed that employers added 237,000 new positions versus the 180,000 expected. In addition, July was revised higher to 201,000 from 178,000. The 237,000 was the fastest pace since March. The ADP Report comes ahead of the government’s Jobs Report which will be released Friday morning.
Due to the devastation in the Houston, Texas area, gas prices have pushed higher in recent days. There are many refineries in the area that have been shut down by the storm. The national average price for a regular gallon of gasoline has risen to $2.40 from $2.37 yesterday and up from $2.30 a month ago. “No doubt, Harvey has impacted operations and access to refineries in the Gulf Coast. However a clear understanding of overall damage at the refineries is unknown,” said Jeanette Casselano, AAA spokesperson. “Despite the country’s overall oil and gasoline inventories being at or above five-year highs, until there is clear picture of damage and an idea when refineries can return to full operational status, gas prices will continue to increase.”
Jobs On Monitors Shows Working Opportunities And Careers
August 29, 2017
Home price gains continued to be strong in June due to the ongoing theme: a tight housing market fueled by low inventories. The S&P CoreLogic Case-Shiller 20-city Index rose 5.7% from June 2016, while month-over-month saw a 0.7% increase from May to June. “Both the number of homes for sale and the number of days a house is on the market have declined for four to five years,” spokesperson David Blitzer said. “Currently the months-supply of existing homes for sale is low, at 4.2 months.” A healthy inventory level is six months.
Renewed tensions in North Korea have sent Mortgage Bond prices to fresh 2017 highs and to the low yields last seen near Election Day 2016. Late yesterday, North Korea launched a missile over Japan, violating Japanese air space and raising uncertainty in the region once again. In response, President Trump says “all options on the table” for North Korea. The headlines are weighing on the U.S. Stock markets, though the Dow Jones Industrial Average, S&P 500 and the NASDAQ are off their worst levels.
The Conference Board reported on Tuesday that its Consumer Confidence Index rose to the highest levels in August to levels not seen in 16 years. The Consumer Confidence Index rose to 122.9, the highest since the 151.3 registered back in July 2001. Americans who view current conditions that as “good” increased, while those who believe current conditions are “bad” declined. Americans stating jobs are “plentiful” rose from 33.2% to 35.4%, while those claiming jobs are “hard to get” decreased from 18.7% to 17.3%.
August 28, 2017
There are no economic reports due for release today as trading gets underway for the last week of August. The rest of the week features data on consumer attitudes, inflation, economic growth, housing, personal spending, manufacturing and the labor market numbers that culminates with Friday’s Jobs Report for August. Summer unofficially comes to and on Labor Day, as kids head back to school and vacations ending this week ahead of the long holiday weekend.
The August Jobs Report will be the big news this week where it is expected that U.S. employers added 183,000 new workers during the month. The Jobs report is closely watched by market participants around the globe to gauge the health of the U.S. labor markets. So far this year, job gains have averaged a solid 184,000 new positions each month, weekly initial jobless claims hover near 40-year lows.
U.S. Stocks are near unchanged to begin the week, as investors assessed the impact of Tropical Storm Harvey. Stocks of refiners, pipeline operators, insurers and home improvement retailers will be in focus this week. The storm will drive more that 30,000 people into shelters as the rain continues this week. Early damages are expected to be seen at a staggering $30 billion, placing the dollar value loss among the top eight hurricanes to hit the U.S.
August 25, 2017
Mortgage rates hit year-to-date lows this week and have declined four straight weeks in a row due in part to continued low inflation levels. Freddie Mac reported that the 30-year fixed mortgage rate fell to 3.86% from 3.89% with 0.5 in points and fees. Last year this time the rate was 3.43%. With mortgage rates holding steady, refinancing activity should remain high, particularly for cash out refinancings.
Energy shares will be in focus today as the sector braces for Hurricane Harvey, which could become the biggest storm to hit the U.S. mainland in more than a decade. It is expected to hit the Texas coastline and could bring “life-threatening” amounts of rain up to 35 inches. West Texas Intermediate oil is up modestly to $47.55 per barrel. The national average price for a regular gallon of gasoline is at $2.34, up from $2.28 a month ago.
Solar Panel And Energy Word Showing Alternative Energies
August 24, 2017
They may not move mountains, but markets are a possibility in Jackson Hole. The 2017 Economic Symposium, “Fostering a Dynamic Global Economy,” kicks off today and will take place Aug. 24-26. Each year since 1978, the Federal Reserve Bank of Kansas City has sponsored the symposium on an important economic issue facing world economies. Participants include prominent central bankers, finance ministers, academics, and financial market participants from around the world. Fed Chair Janet Yellen and European Central Bank President Mario Draghi are schedule to speak tomorrow.
The number of Americans filing for unemployment benefits rose less than expected last week. Initial claims increased 2,000 to a seasonally adjusted 234,000 for the week ended Aug. 19, the Labor Department reported. Claims have now been below 300,000, a sign of a robust labor market, for 129 consecutive weeks. That is the longest stretch since 1970. The August Jobs Report will be released Friday, September 1 with more labor market data on job growth, unemployment, average workweek and hourly earnings. Job growth has been averaging 184,000 new jobs per month in 2017, which is on par with 2016.
Existing Home Sales in July slipped again as large declines in the Northeast and Midwest outweighed sales increases in the South and West, according to the National Association of Realtors® (NAR). Total Existing Home Sales slipped 1.3 percent to a seasonally adjusted annual rate of 5.44 million from a downwardly revised 5.51 million in June. Although July’s sales pace is 2.1 percent above a year ago, it is the lowest of 2017. The median existing home price for all housing types was up 6.2 percent from July 2016, marking the 65th straight month of year-over-year gains. Total housing inventory at the end of July declined 1.0 percent to a 4.2-month supply and is now 9.0 percent lower than a year ago.
August 23, 2017
The Commerce Department reported on Wednesday that New Home Sales in July fell by 9.4% to an annualized rate of 571,000 units, a seven month low, and below the 615,000 expected. However, June was revised higher to 630,000 from 610,000. Sales dropped in the Northeast, South and West but rose in the Midwest. Inventories for new homes for sale rose to 5.8 months in July from 5.2 in June, near the healthy rate of six months. From July 2016 to July 2017, sales were down nearly 9%.
Mortgage rates remained near the 2017 lows as reported by the Mortgage Bankers Association (MBA). The MBA reports that the 30-year fixed conforming mortgage rate was steady at 4.12%. In addition, the 30-year jumbo mortgage rate fell to a new low for 2017 of 3.99%, while the FHA fixed mortgage rate was 4.02%. Those rates do carry at least 0.30 in points added on top of the rate. The MBA’s Market Composite Index, a measure of total mortgage loan application volume, saw a 0.5% increase in the latest week. The MBA’s refinance index rose marginally by 0.3%, while the purchase index declined 1.5%.
On Wednesday night, President Trump said that he will shut down the U.S. government if necessary to build a wall along the border of Mexico, which has put a dent into Stock prices today. President Trump also said he might scrap the North American Free Trade Agreement (NAFTA) to legislate his pro-growth agenda. The president’s words are pushing Stock prices lower today, after yesterday’s big rally.
August 22, 2017
U.S. house prices rose 1.6% in the second quarter of 2017 according to the Federal Housing Finance Agency (FHFA) House Price Index (HPI). House prices were up 6.6% from the second quarter of 2016 to the second quarter of 2017. FHFA’s monthly index for June was up 0.1% from May. “U.S. house prices rose in nearly every state during the second quarter,” said FHFA Senior Economist William Doerner. “New home sales are climbing but, relative to the overall population, they still remain low from a historical perspective. The tight inventory is a major explanation for why house prices have been increasing every quarter over the last six years.”
There are no major economic reports due for release today and it is quiet on the geopolitical front. Expect a quiet summer trading session today with many traders and investors away on vacation. The Jackson Hole Fed-sponsored Symposium kicks off on Thursday and the markets will await speeches from European Central Bank Chief Draghi and Fed Chair Yellen on Friday. New Home Sales will be released on Wednesday and Existing Home Sales on Thursday.
The National Retail Federation (NRF) recently released its expectations for back-to-school spending. The NRF reports that spending for both school and college is projected to hit $83.6 billion, up from last year’s $75.8 billion. Families with children in elementary through high school plan to spend an average of $687.72 each, for a total of $29.5 billion. College students and their families are expected to spend an average of $969.88, for a total of $54.1 billion.
Desk with school supplies. Studio shot on wooden background.
August 21, 2017
Traders and investors are looking ahead to this week’s big event in the Kansas City Fed-sponsored Jackson Hole, Wyoming Symposium beginning on Thursday and ending Saturday. The Symposium takes on important economic issues facing the U.S. and world economies. Symposium participants include prominent central bankers, finance ministers, academics, and financial market participants from around the world. The participants convene to discuss the economic issues, implications and policy options pertaining to the symposium topic. This year’s topic: Fostering a Dynamic Global Economy.
U.S. Stock markets are lower to begin the week and the closely watched S&P 500 Index closed lower on Friday for the second straight week of declines. Stocks have been moving lower due in part to ongoing headlines out of Washington D.C. and the tensions between North Korea and the U.S. The S&P 500 is down a little over 2% since its all-time closing record high on August 8 of 2,474.92. In addition, with the S&P, Dow and NASDAQ near record highs, investors are taking the opportunity to secure some profits.
And this from NASA on today’s “Total Solar Eclipse”: Today, August 21, 2017, all of North America will be treated to an eclipse of the sun. Anyone within the path of totality can see one of nature’s most awe-inspiring sights – a total solar eclipse. This path, where the moon will completely cover the sun and the sun’s tenuous atmosphere, the corona, can be seen, will stretch from Salem, Oregon to Charleston, South Carolina. Observers outside this path will still see a partial solar eclipse where the moon covers part of the sun’s disk.
Partial Sun eclipse. Man covering a strong sunlight by dark plate and shows sun eclipse. man hand silhouette on blue sky.
August 17, 2017
The minutes from the July Federal Open Market Committee meeting were released yesterday revealing a bit of dissension amongst the Fed members, while most are concerned about persistently low inflation levels. In addition, Fed members are not in alignment on when to hike rates, when to trim their $4.5 trillion balance sheet and the effects of low inflation.
The Fed’s favorite inflation gauge, the Core PCE, fell to 1.5% annually in the July reading, below the 2% target range. Some members said inflation is likely to remain low and beneath the target range for longer than expected. Fed officials do remain in favor of making some sort of an announcement at the September meeting regarding when the balance sheet will begin to wind down. The Fed’s balance sheet is made up of treasury and Mortgage backed securities.
Mortgage rates continued to edge lower this week due in part to low levels of inflation. Freddie Mac reported that the 30-year fixed mortgage rate fell to 3.89% from 3.90% with 0.4 in points and fees. Last year this time the rate was 3.43%. With mortgage rates holding steady, refinancing activity should remain high, particularly for cash out refinancings.
digital visualization of dollar inflation
August 16, 2017
July Housing Starts fell 4.8% from June to an annual rate of 1.155 million units, below the 1.217 million expected. Homebuilders cite a lack of skilled labor and lots to build on and higher costs for materials for the decline in new home building. Year-over-year starts were down 5.6%.
Building Permits, a sign of future construction, fell 4.1% from June to an annual rate of 1.223 million annualized units, just below the 1.247 million expected. Within the report it showed that single-family starts, which make up the biggest share of the housing market, fell 0.5%, while multi-family dwellings (five or more units) plunged 17.1% from June to July.
Mortgage rates hit their lowest levels in 2017 as reported by the Mortgage Bankers Association (MBA). The MBA reports that the 30-year fixed conforming mortgage rate fell 2bp to a new year-to-date low of 4.12%. In addition, the 30-year jumbo mortgage rate fell 3bp to a year-to-date low of 4.04%, while the FHA fixed mortgage rate slipped 1bp to 4.01%, just above its year-to-date low of 4%. Those rates do carry at least 0.30 in points added on top of the rate. The MBA’s Market Composite Index, a measure of total mortgage loan application volume, saw a slight 0.1% increase in the latest week. The MBA’s refinance index rose 1.6% and the purchase index declined 1.5%.
Framed building or residential home with basic electrical wiring and hvac complete.