Stocks finished the week sharply higher after four straight weeks of loses - Stocks markets climbed this week as both the US and China seemed to be backing down on further trade tariffs which have escalated into a trade war. Investors hope that both sides will back down and claim victory ending tensions which have harmed the economies in both countries. The Commerce Department announced this week that consumer spending was up 4.7% in the second quarter, its largest gain in four years. Consumer spending accounts for two thirds of the US economy, so this report helps to ease investors’ recession fears. The Dow Jones Industrial Average closed the week at 26,403.28, up 3% from 25,628.90 last week. It’s up 13.2% year to date. The S&P 500 closed the week at 2,926.46, up  2.8% from 2,847.11 last week. It is up 16.7%  year to date. The NASDAQ closed the week at 7,962.88, up 2.7% from 7,751.27 last week. The NASDAQ is up 20% year to date. 

10-year treasury bond yield dropped below 2% this week - The 10-year treasury bond closed the week yielding 1.50% down slightly from 1.52%  last week. The 30-year treasury bond yield ended the week at 1.96%, down from 2.02%  last week. We watch treasury bond yields because mortgage rates often follow bond yields. 


Mortgage rates near record lows - The August 29, 2019 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.58%, almost unchanged from 3.55%  last week. The 15-year fixed was 3.06% almost unchanged from 3.03% last week. The 5-year ARM was 3.31% unchanged from 3.32%  last week. 


Author, 

​Syd Leibovitch

​Stocks lower for the fourth straight week - Stock markets were on track to finish higher this week, ending a three week slide until China initiated a new round of retaliatory tariffs and President Trump announced that he would do the same on Friday.  Following the back and forth, stocks sustained heavy loses and ended the week down sharply.  The Dow Jones Industrial Average closed the week at 25,628.90, down 1.0% from 25,886.01 last week. It’s up 9.9% year to date. The S&P 500 closed the week at 2,847.11, down 1.4% from 2,888.68 last week. It is up 13.6% year to date. The NASDAQ closed the week at 7,751.27, down 1.8% from 7,895.99 last week. The NASDAQ is up 16.8% year to date. 
 
Treasury Bond Yields at lowest level in 3 years - Bond yields dropped sharply on recession fears - The 10-year treasury bond closed the week yielding 1.52%, down slightly from 1.55% last week. The 30-year treasury bond yield ended the week at 2.02%, unchanged from 2.01% last week. We watch treasury bond yields because mortgage rates often follow bond yields. 
Mortgage rates near record lows - The August 22, 2019 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.55%, downfrom 3.60% last week. The 15-year fixed was 3.03%, down slightly from 3.07% last week. The 5-year ARM was 3.32%, almost unchanged from 3.36% last week. 
 
July 2019 nationwide home sales report - Lower rates lead to more home sales and higher prices nationwide - The National Association of Realtors announced that the number of total existing home sales jumped 2.5% in July from the number of homes sold in June.  Year over year the number of sales were up 0.6% from last July. Total existing home sales include re-sale single-family, condominiums, town-homes, and co-ops. The median price increased 4.3% from July 2018. That marked the 89-straight month on year over year increases in the median price. Inventory levels were slightly below one year ago. There was a 4.2 month supply of homes for sale in July, down from a 4.3 month supply last July. 
 
Author,
 
Syd Leibovitch

Stocks drop for the third straight week -Stocks declined as recession fears increased after several economic indicators point to a global slowdown. President Trump announced that tariffs scheduled to begin in September would be pushed back to at least the middle of December, which helped the markets in an otherwise turbulent week.  The Dow Jones Industrial Average closed the week at 25,886.01, down 1.5% from 26,287.44 last week. It’s up 11% year to date. The S&P 500 closed the week at 2,888.68, down 1.0% from 2,918.655 last week. It is up 15.2% year to date. The NASDAQ closed the week at 7,895.99, down 0.8% from 7,959.14 last week. The NASDAQ is up 19% year to date. 


Treasury Bond Yields at lowest level in 3 years - Bond yields dropped sharply on recession fears - The 10-year treasury bond closed the week yielding 1.55%, down from 1.74% last week. The 30-year treasury bond yield ended the week at 2.01%, down from 2.26% last week. We watch treasury bond yields because mortgage rates often follow bond yields. 


Mortgage rates near record lows this week - The August 15, 2019 Freddie Mac Primary Mortgage Survey reported mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.60, unchanged from 3.60% last week. The 15-year fixed was 3.07%, almost unchanged from 3.05% last week. The 5-year ARM was 3.35%, unchanged from 3.36% last week. Rates dropped at the end of the week. The 30-year fixed was well under 3.5%! Next week’s survey rates should be lower.


July California existing home sales report – July marked the first month in one year where the number of sales increased year over year for the same month the previous year - The California Association of Realtors reported that existing single-family homes sales totaled 411,630 in July on a seasonally adjusted annualized rate.  That represented a jump of 5.6% from Juneand a year over year increase of 1.1% from last July. The number of homes sold from January to July are down 4.9% compared to the first 7 months of 2018, but it was encouraging to have a month with more sales than the same month last year. The statewide median price was $607,990, up 2.8% from July 2018. Theunsold inventory index stood at a 3.2-month supply of homes for sale, down from a 3.3 month supply last July. Year over year results on a regional basis in July were as follows: In Los Angeles Countythe median price was $611,250, up 2.3%, and the number of sales increased 4.7%.  In Orange County the median price was $839,450, up 1.3%, and the number of sales increased 6.7%. In Ventura Countythe median price was $685,000, up 3.4%, and the number of sales increased 2.1%. 
 
Author,
 
Syd Leibovitch

Trade war worries dragged down stocks this week - Stocks fell modestly while bond yields dropped to a three year low as global markets reacted to an unexpected drop in China’s currency. As the trade war escalated, China retaliated by allowing its currency to drop to the lowest level in a decade. Cheaper currency makes Chinese goods less expensive for consumers in other countries, which basically offsets tariffs. Conversely, a weaker yen makes American and other imports more expensive to Chinese consumers. The Dow Jones Industrial Average closed the week at 26,287.44, down 0.7% from  26,485.01 last week. It’s up 12.7% year to date. The S&P 500 closed the week at 2,918.65, down 0.5% from 2,932.05 last week. It is up 17% year to date. The NASDAQ closed the week at 7,959.14, down 0.9% from 8,004.07 last week. The NASDAQ is up 20.0% year to date. 

Treasury Bond Yields at lowest level in 3 years  - Bond yields dropped sharply this week. The 10-year treasury bond closed the week yielding 1.74%, down from 1.86% last week. The 30-year treasury bond yield ended the week at 2.26%, down from 2.39% last week. We watch treasury bond yields because mortgage rates often follow bond yields. 
 

Mortgage rates near record lows this week - The August 8, 2019 Freddie Mac Primary Mortgage Survey showed mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.60%, down from 3.75% last week. The 15-year fixed was 3.05%,  down  from 3.20%  last week. The 5-year ARM was 3.36%, down from 3.46% last week. 


Home affordability drops in second quarter, but affordability is still higher than one year ago - The California Association of Realtors reported that 30% of California households could afford to purchase a $608,660 median-priced home in the second quarter of 2019. That was down from 32% in the first quarter, as the median price rose over 7% from the first to second quarter, but homes are more affordable than one year ago when only 26% of households could afford the median priced home in Q2 2018. The income needed to purchase a median priced home was $122,960. 45% of households could afford to purchase a median priced condominium or townhouse which required an annual income of $95,960. 


Author, 

Syd Leibovitch

U.S. economy adds 164,000 new jobs in July - The Bureau of Labor Statistics reported that 164,000 new jobs were created in July.  The unemployment rate held steady at 3.7%, which was just above a 50-year low set earlier in the year. Average hourly wages were up 3.2% from one year ago. 
 
Fed Cuts interest rates for the first time since 2008 – Federal Reserve Chairman Jerome Powell announced that the fed had dropped its target rate by .25% to 2% on July 31. That rate cut, the first cut in over a decade signaled a change in policy by the Fed. Chairman Powell stated, “the U.S. economy was favorable, and this action is designed to support that outlook. The cut is intended to ensure against downside risks from weak global growth and trade tensions.” After the cut was announced stocks dropped, and bond and mortgage interest rates dropped.
 
 
Stocks markets drop sharply following Fed rate cut – Stock markets recorded their worst week of the year following a rate cut by the Fed that many felt would be welcome news for investors. Unfortunately, the rate cut made investors worry that the economy was not in as good of shape as everyone thinks, and possibly the Fed knows something we don’t. Corporate earnings have also been mixed, as second quarter earnings are being released. Lastly, President Trump announced more sanctions on China and Russia this week which further scared investors. It’s important to note that this was just one of the few down weeks of the year. Stocks are just below record levels, and stock markets have risen year to date at record pace.  The Dow Jones Industrial Average closed the week at 26,485.01, down 2.6% from 27,192.45 last week. It’s up 13.5% year to date. The S&P 500 closed the week at 2,932.05, down 3.1% from 3,025.86 last week. It is up 17% year to date. The NASDAQ closed the week at 8,004.07, down 3.9% from 8,330.21 last week. The NASDAQ is up 20.6% year to date. 


Treasury Bond Yields   - Bond yields dropped sharply this week. The 10-year treasury bond closed the week yielding 1.86%, down sharply from 2.08% last week. The 30-year treasury bond yield ended the week at 2.39%, down from 2.59% last week. We watch treasury bond yields because mortgage rates often follow bond yields. 
 
Mortgage rates lower this week - The August 1, 2019 Freddie Mac Primary Mortgage Survey showed mortgage rates for the most popular loan products as follows: The 30-year fixed mortgage rate average was 3.75%, unchanged from 3.75% last week. The 15-year fixed was 3.20%, up slightly from 3.18% last week. The 5-year ARM was 3.46%, almost unchanged from 3.47% last week. Rates dropped after the Fed rate cut. Next week’s rates will be lower.
 
Author, 
Syd Leibovitch