Stock markets hit record highs this week – Stocks rose this week on rising oil prices, better results from retailers, and an upgraded revision in the first quarter GDP. Oil prices which dropped in 2015 and 2016 put pressure on energy stocks in the last couple years. This year they were rising before falling in April. That drop caused OPEC to cut oil production which lifted oil prices. This week OPEC announced that the production drop will last until March 2018 which lifted oil further and caused energy stocks to rise. Several retailers reported first quarter profits that beat estimates this week. Among those were Costco, Best Buy and Tiffany’s. Target and Home Depot also raised outlooks. Earlier in the month Macey’s, JC Penny and others reported disappointing profits which made experts think consumers were slowing down on spending. These new results calmed investors who were worried about retailers. The first quarter GDP was also revised upward from 0.7% to 1.2%. It was a strong week all around. The Dow Jones Industrial Average ended the week at 21,080.28, up from 20,804.84 last week. The S&P 500 closed the week at 2,414.82, upfrom its close last week of 2,381.73. The NASDAQ closed the week at 6,210.19, up from last week’s close of 6,083.79.
Treasury Bond yields stable this week – The 10-year Treasury bond closed the week at 2.25%, up slightly from 2.23% last week. The 30-year treasury yield ended the week at 2.92% also up slightly from 2.90% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.
Mortgage Rates down this week – The May 25, 2017 Freddie Mac Primary Mortgage Survey reported that the 30 year fixed mortgage rate average was 3.95%, down from 4.02% last week. The 15 year fixed was 3.19%, down from last week’s 3.27%. The 5-year ARM was 3.07%, down from 3.13% last week.
U.S. Existing homes sales pace declines in April – The National Association of Realtors reported that the number of homes sold in April declined 2.3% from March’s sales pace. Sales nationwide were still 1.6% above the number if sales last April. Simply put the number of new listings are not keeping up with the pace of sales. Low inventory also causes prices to rise. The median price of a home rose 6% nationally from last April. April marked the 62nd straight month of year over year price gains.
California pending home sales fewer in April – The California Association of Realtors reported that an extremely low supply of homes for sale has caused the number of new contracts signed on existing homes in California to fall for the fourth straight month. The number of new contracts signed decreased 7.4% from the number of pending sales last April. Southern California fared much better that the state as a whole. Southern California pending sales were down 2.8% from last April. Los Angeles pending sales were down 4.7%from April 2016.