 Stock markets dropped for fourth straight week on trade war fears - Stocks dropped sharply this week as increased trade tensions with China led to a fourth straight week of losses. To make investors more depressed President Trump announced that he would take emergency powers and place a 5% tariff on all goods from Mexico beginning June 10, which will increase over time to 25% unless Mexico does something to stem illegal immigration. That announcement which caused another steep decline on Friday. All in all the DOW and S&P 500 declined 7%, and the NASDAQ declined 8% in May, its worst May since 2010. The Dow Jones Industrial Average closed the week at 24,815.04 down 3.0% from 25,585.69 last week, and down 7% from 26,554.39 on April 30. It’s up 6.4% year to date. The S&P 500 closed the week at 2,752.06, down 2.6% from 2,826.06 last week, and down 7% from 2,943.03 on April 30. It is up 9.8% year to date. The NASDAQ closed the week at 7,453.15, down 2.4% from 7,637.01 last week, and down 8% from 8,161.85 on April 30. The NASDAQ is up 12.3% year to date.
Treasury Bond Yields at lowest levels in 21 months - Trade and tariff fears caused investors to sell off stocks and move to the safety of low yielding treasury bonds, which has driven yields down to 18 month lows. The 10-year treasury bond closed the week yielding 2.14%, down from 2.32% last week. The 30-year treasury bond yield ended the week at 2.58% down from 2.75% last week. We watch treasury bond yields because mortgage rates follow bond yield yields. Mortgage rates dropped to 18 month lows this week - The May 30, 2019 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.99%, down from 4.06% last week. The 15-year fixed was 3.46%, down from 3.51% last week. The 5-year ARM was 3.60%, down from 3.66% last week. Rates were even lower on Friday. Expect next weeks survey rates to be close to 3.80% on a 30 year fixed! U.S. pending home sales fall slightly for the 16th straight month in April - Although really just a slight drop, the number of pending existing homes sold have declined on a year over year basis for 16 straight months, according to data released Thursday by The National Association of Realtors. They reported that pending existing home sales in April dropped 1.5% month over month from March, and dropped 2% year over year from last April. Existing home sales are calculated by the number of existing homes that went under contract and were reported to MLS and Realtor Associations throughout the country. Existing sales include re-sale single family homes, town-homes, condominiums, and co-ops. Following the announcement NAR Chief Economist stated that “it’s inevitable that sales turn higher in a few months.” He cited increased demand, a strong economy, and far lower interest rates than we have seen over the last 16 months to support his optimistic view. Author, Syd Leibovitch
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 Economic update for the week ending May 25, 2019
Reports of a breakdown in trade talks with China caused stocks to drop again this week. Stock markets reached all time highs just three weeks ago, as investors felt a trade deal with China was close. Unfortunately, stocks have dropped sharply over the last three weeks as it appears that the proposed deal has fallen through. The U.S. and China have increased tariffs in recent weeks, and ratcheted up threats of future increases. Investors fear that these increased tariffs will slow economic growth. The Dow Jones Industrial Average closed the week at 25,585.69, down 0.7% from 25,764.00 last week. It’s up 9.7% year to date. The S&P 500 closed the week at 2,826.06, down 1.2% from 2,859.93 last week. It is up 12.7% year to date. The NASDAQ closed the week at7,637.01, down 2.3%, from 7,816.28 last week. The NASDAQ is up 15.1% year to date. 10 and 30 year Treasury Bond Yields at lowest levels since 2017 - The 10-year treasury bond closed the week yielding 2.32%, down from 2.39% last week. The 30-year treasury bond yield ended the week at 2.75%, down from 2.82% last week. We watch treasury bond yields because mortgage rates follow bond yield yields. Mortgage rates almost unchanged this week - The May 23, 2019 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.06%, down slightly from 4.07% last week. The 15-year fixed was 3.51%, down slightly from 3.54% last week. The 5-year ARM was 3.68%, slightly higher from 3.66% last week. U.S. home prices increase for the 86th consecutive month in April - The National Association of Realtors reported that the median price paid for an existing single family home increased 3.6% in April from April 2018. That marked the 86th consecutive month of year over year increases in the median price. The number of sales dropped 4.4% in April from the number of sales last April. Inventory levels increased 1.7% from one year ago. The unsold inventory index increased to a 4.2 month supply of housing for sale, from a 4 month supply one year ago. Author, Syd Leibovitch  Economic update for the week ending May 18, 2019
The Dow Jones Industrial Average closed the week at 25,764.00, down 0.7% from 25,942.37 last week. It’s up 10.4% year to date. The S&P 500 closed the week at 2,859.53, down 0.8% from 2,881.40 last week. It is up 14.1% year to date. The NASDAQ closed the week at 7,816.28, down 1.3%, from 7,916.94 last week. The NASDAQ is up 17.8% year to date. Treasury Bond Yields continue to drop - The 10-year treasury bond closed the week yielding 2.39%, down from 2.47% last week. The 30-year treasury bond yield ended the week at 2.82%, down from 2.89% last week. We watch treasury bond yields because mortgage rates follow bond yield yields. Mortgage rates almost unchanged this week - The May 16, 2019 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.07%, down slightly from 4.10% last week. The 15-year fixed was 3.54%, down slightly from 3.57% last week. The 5-year ARM was 3.66%, slightly higher from 3.63% last week. Lower rates and moderating prices made California homes more affordable in Q1 2019 - The California Association of Realtors reported that the percentage of home buyers who could afford to purchase a median priced home in California rose to 32% in the first quarter of 2019. It is up from 28% in the fourth quarter of 2018, and up from 31% for the first quarter of 2018. The minimum annual income of $114,860 was needed to purchase a $545,820 statewide median-prices existing single family home.Condos and townhomes were more affordable. 41% or California households could afford a median priced Condominium or townhome. That was up from 37% in the last quarter of 2018. California home prices soar in April - prices hit new statewide median price record - The California Association of Realtors reported that the median price paid for a resale home in April was $602,920, up 6.5%, month over month, from $565,880 in March. Year over year the median price was up 3.8% from $584,460 last April. Prices dropped in the last six months in 2018, but have soared in April to exceed the peak levels set last June. The number of existing home sales in California totaled 396,769on a seasonally adjusted annualized basis, down 4.8% from the number of homes sold last April. The unsold inventory index showed a 3.4 month supply of homes for sale, up from a 3.2 month supply one year ago. On a regional basis the median price paid for a home in Los Angeles County rose 3%, Orange County rose 0.9%, and Ventura County dropped 2.3% from April 2018. Author, Syd Leibovitch  Economic update for the week ending May 11, 2019
Stocks retreated this week among trade tensions - After several months of optimism that a trade deal with China was imminent, talks broke down this week causing stocks to lose ground and mortgage rates to fall. The Dow Jones Industrial Average closed the week at 25,942.37, down 2.1% from 26,504.95 last week. It’s up 11.2% year to date. The S&P 500 closed the week at 2,881.40, down 2.2% from 2,945.64 last week. It is up 14.9% year to date. The NASDAQ closed the week at 7,916.94, down 3%, from 8,164.00 last week. The NASDAQ is up 19.3% year to date. Treasury Bond Yields lower this week - The 10-year treasury bond closed the week yielding 2.47%, down from 2.54% last week. The 30-year treasury bond yield ended the week at 2.89% down from 2.93% last week. We watch treasury bond yields because mortgage rates follow bond yield yields. Mortgage rates dropped this week - The May 9, 2019 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.10%, down from 4.14% last week. The 15-year fixed was 3.57%, down slightly from 3.60% last week. The 5-year ARM was 3.63%, down from 3.68% last week. Author, Syd Leibovitch  Economic update for the week ending May 4, 2019
U.S. Employers add 263,000 new jobs in April - Unemployment rate at lowest level since 1969 - The Labor Department reported that 263,000 new jobs were added in April. That crushed experts expectations of 190,000 new jobs. The unemployment rate dropped from 3.8% in March to 3.6% in April, the lowest unemployment rate since 1969. Average hourly wages were up a healthy 3.2% from 12 months ago. Stocks almost unchanged this week - The NASDAQ and S&P 500 both set all time highs this week. The Federal Reserve left interest rates unchanged at their FOMC Meeting on Thursday citing that inflation is under control even though growth is strong. Lower rates have been a key development in the upswing in the stock markets. The Dow Jones Industrial Average closed the week at 26,504.95, down 0.1% from 26,543.33 last week. It’s up 13.6% year to date. The S&P 500 closed the week at 2,945.64, up 0.2% from 2,948.88 last week. It is up 17.5% year to date. The NASDAQ closed the week at 8,164.00, up 0.2% from 8,146.40 last week. The NASDAQ is up 23.0% year to date. Treasury Bond Yields stable this week - The 10-year treasury bond closed the week yielding 2.54% unchanged from 2.51% last week. The 30-year treasury bond yield ended the week at 2.93%, unchanged from 2.92% last week. We watch treasury bond yields because mortgage rates follow bond yield yields. Mortgage rates lower this week - The May 2, 2019 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 4.14%, down from 4.20% last week. The 15-year fixed was 3.60%, down slightly from 3.64% last week. The 5-year ARM was 3.68%, down from 3.77% last week. Author, Syd Leibovitch |
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