June 25, 2013
Economic data was plentiful today – first up was a reading on the rise in home prices across the nation. The Case-Shiller 20-City Home Price Index saw its largest monthly gain on record rising by 2.5% from March to April. Since April of 2012, prices rose by 12.1%, the fastest annual pace since 2006. San Francisco had the highest year-over-year gain of nearly 24%, New York was the lowest at 3.2%. The data is from April and it remains to be seen if price appreciation can continue as home loan rates have risen to the mid-4s.
The good news for housing continued tis morning as the Commerce Department reported that New Home Sales rose by 2.1% in May from April to 476,000 units, the highest level since July of 2008. The 476,000 was above the expectaion of 460,000. Since last year this time, sales are up nearly 29%. The recovery is largely due to low home loan rates, which have increased in the past month.
The Conference Board reported this morning that its Consumer Condindence Index rose in June to 81.4, up from 74.3 in May. The Conference Board said that the index has risen for the third consecutive month and is at its highest level since January of 2008. Consumer Confidence measures how optimistic or pessimistic consumers are with respect to the economy in the near future.
June 24, 2013
Stocks and Bonds are both moving lower to start the last week of the month and as the 2nd quarter ends this Friday. The hint that the U.S. Federal Reserve will begin to start easing back on its current stimulus program, dubbed QE III, has investors in both asset classes selling securities at a fast clip. The yield on the 10-Year T Note has risen to 2.63% from the 1.63% recorded on May 1, while in that same time, the closely watched S&P 500 Index went from 1,687 to the current level of 1,568.
Over in the housing markets, Lender Processing Services reports that home prices rose 1.5% from April to May and are up 8.1% since last year this time, the mortgage analytics firm said. The average price is up to $217,000, up 4.5% from the beginning of 2013, but below the $265,000 recorded in June of 2006. The report went on to say that every one of the 20 largest U.S. States saw rising home from March to April.
This week the economic calendar really heats up with readings on housing, inflation, GDP, consumer confidence and sentiment. In addition, the Treasury will sell a total of $99B in 2, 5 and 7-Year Treasury Notes this week beginning on Tuesday. Earnings season is set to kick off in a few weeks as investors will be able to gauge the financial health of U.S. companies
June 20, 2013
The Federal Reserve released its monetary policy statement yesterday with little change to the previous statement, but the fireworks began at Fed Chairman Bernanke’s press conference following the release. Mr. Bernanke said that if the Fed’s economic forecasts play out, the Fed would begin to taper its purchases of Bonds each month by the end of this year. The Fed has been purchasing $85 billion in Treasury and Mortgage Backed Securities per month in an effort to spur on growth in the economy, keep interest rates low and to promote job growth.
Over in the housing markets, Existing Home Sales surged by 5.18 million units annualized in May, well above the 5 million expected and was the highest rate since November of 2009. Within the report it showed that the median existing-home price was $208,000 in May, up 15.4% from May of 2012. Existing Home sales have increased 13% from May of 2012. The inventory of Existing Homes is at a 5.1 month supply.
Manufacturing activity in the Philadelphia area picked up in June to its highest level since April 2011 rising by 12.5, well above the -0.2 expected and considerably higher than the -5.2 registered in May. Numbers above zero signals that more companies are expanding than contracting business. Within the report it showed that the employment component rose modestly.
June 19, 2013
There are no economic reports due for release today, but the big event will be the Federal Reserve’s monetary policy statement that is set to be delivered at 2:00pm ET today. There will be no change interest rates as the benchmark Fed Funds Rate will remain at 0.25%. The markets will be looking for any hints on the current Bond purchase program that has been enacted by the Federal Reserve in an effort to keep interest rates low, spur on the economy and to promote job growth.
Over in the mortgage banking sector, the Mortgage Bankers Association reported today that its Market Composite Index, a measure of loan application volume, fell 3.3% in the latest week as home loan rates inched higher. Both the refinance and the purchase index fell by 3%. The ultra low home loan rates that were seen in the past year are now at their highest levels since the fall of 2011.
Gas prices at the pump across the nation averaged $3.60 in the latest survey falling by 2 cents in the past week as some refining issues in the Great Lakes regions have been cleared up. Analysts do see prices falling in the coming weeks led steady oil prices and a decline demand by consumers.
June 18, 2013
Prices at the consumer level rose by 0.1% in May led by a rise in housing costs, electricity and natural gas. Within the Consumer Price Index (CPI) report it showed that food prices declined by 0.1%. On a year-over-year basis, CPI rose by 1.4%, the second lowest level this year aside from the 1.1% gain year-over-year in April. When stripping out volatile food and energy, the Core CPI rose by 0.2%, just above the 0.1% expected and rose 1.7% year-over-year, matching the year low in April.
The Federal Reserve members kick off their scheduled 2-day FOMC meeting this morning on Capitol Hill where the they gather to discuss monetary policy and the U.S. economy. There is zero chance of a hike in the Fed Funds Rate, which is currently at 0.25%. The talk will most likely surround the onging Quantitative Easing III program, which is geared towards promoting job growth and stimulating the economy by lowering interest rates by way of purchasing massive amounts of Bonds each month…$85 billion to be precise.
The housing markets received some mixed news today. The Commerce Department reported that Housing Starts rose by 7% from April to May to 914,000 units on an annualized basis, but below the 950,000 that was expected. In addition, there was a 28.6% increase from May 2012 to May 2013. Building Permits, a sign of future construction, fell by 3% last month from April to 974,000 and below the 983,000 that was projected.
And the good news kept on coming for housing as Standard & Poor’s (S&P) reported that home prices will continue to rise, but it may not be the double digit gains that the market has seen. S&P does see housing starts rising by 28% in 2013 and 29% in 2014.
June 17, 2013
The Stock markets begin the week sharply higher ahead of this week’s big event, the 2-day Federal Open Market Committee meeting. The meeting will begin on Tuesday morning and will end with a monetary policy statement being delivered at 2:00pm ET on Wednesday. The meeting will be followed by a press conference by Fed Chairman Ben Bernanke at 2:30pm ET and he may calm the fears of tapering the current Bond purchase program.
In economic news, the New York State Empire Manufacturing Index unexpectedly jumpd by 7.84 point in May from the -1.4 reading registered in April. However, most of the components within the survey fell – new orders, shipments and the employment number. The optimism index for a six month outlook, also fell, suggesting that future conditions are weakening further.
The National Association of Home Builders (NAHB) reported today that it’s Housing Market Index rose to 52 in June from 44 in May and above the 45 that was expected. It was the largest one month gain since August and September of 2002 and the best reading since April of 2006. The NAHB said that home builders “are experiencing some relief in the headwinds that are holding back a more robust recovery.” The NAHB went on to say that with the low inventory of existing homes, potential buyers are seeking out new homes.
June 13, 2013
Americans filing for first time unemployment benefits fell in the latest week as the lob markets continues to improve. The Labor Department reported this morning that Weekly Initial Jobless Claims fell by 12K in the latest week to 334K, below the 345K expected and the lowest level since early May. The 4-week moving average, which smoothes out any seasonal abnormalities, fell 7,250 to 345,250.
Consumers opened their wallets in May as Retail Sales rose at the fastest pace, 0.6% versus the 0.3% expected, in three months led by demand for autos, which usually make up about one-fifth of sales each month. Sales fell in electronics, clothes, appliances, home furnishings and bars and restaurants.
Over in housing news, RealtyTrac reported today that foreclosures rose by 2% in May from April, but the good news is that foreclosures have fallen 28% from May of 2012. Foreclosure starts also rose in May by 4%, but are down 33% from a year ago.
June 11, 2013
Standard & Poor’s announced yesterday morning that it has raised the credit ooutlook for the U.S. to stable from negative based on its view of the strengths of the U.S. economy and monetary system, as well as the U.S. dollar’s status as the world’s key reserve currency. S&P went on to say that stronger than expected private sector contributions to economic growth, combined with the payback of bailout funds from Fannie Mae and Freddie Mac, which reflects a continued housing market, have led the Congressional Budget Office to revise down its estimates for future government deficits.
Fannie Mae reports that Americans across the nation are more optimistic when it comes to buying or selling a home in its monthly National Housing Survey. Fannie said that the those who responded that now is a good time to sell a home reached a record high of 40% in May, up from 30% in April and 16% in May of 2012. In addition, those who were surveyed who say it is a good time to buy a home increased by 5% to a survey high of 78%. The survey also revealed the percentage of people who expect their personal financial situation to get better over the next 12 months held steady at 41%.
The summer season is just underway and as vacationers head to the beaches or parks to soak up some sun, people are being advised that the sunscreen you apply to avoid from burning may have already expired. Some of the bottles have expiration dates and some don’t – the date of expiration is optional for the manufacturer. The industry says that sunscreens can last for three years, but critics say that if an expiration date is not on the product, it can become confusing. A noted dermatologist said that if he doesn’t see an expiration date on the bottle, he wouldn’t buy it.
June 07, 2013
The highly anticipated jobs report was released showing that employers added 175,000 new jobs in May, above the 159,000 expected signaling that the labor markets are improving, but not at a pace where the Federal Reserve will pull back on its current stimulus program. The Unemployment Rate rose to 7.6% from 7.5% and it was reported that 420,000 people entered the work force. The Bureau of Labor Statistics said that employment rose in professional and business services, food services and drinking places and retail trade.
The Great Recession took a toll on the pockets of Americans across the nation as the middle class saw their personal wealth fall by almost 50% to nearly a 40-year low. In the recent data, households have gained back 62% of what disappeared according to the figures compiled through the first quarter of this year.
Freddie Mac reported yesterday that homeowners who refinanced their mortgages in the first quarter of 2013 will save nearly $7 billion in interest payments in the next 12 months. The categories are broken down as 28% shortened their loan terms, 68% of borrowers kept the same term as the loan that they paid off, 3% chose to lengthen their term loan while more than 95% of refinancing borrowers chose a fixed-rate loan.