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Market Update February 29th

Market Update February 29th
February 29, 2016 devsite

The best news of the week is that if you have any investments in the stock market, you have likely seen a significant recovery of the money you have lost in the last couple of months.

  • For the last two weeks the stock market has been moving higher and most of the losses from earlier in the month have been recovered.
  • Panic over the glut of oil has seemed to subside for the time being and oil prices have stabilized.

Home prices continued to rise with December showing an increase of 0.8 percent according to the Case-Shiller’s 20-city index.

  • This extends the strong monthly gains that have been happening since last year.
  • The only slight concern is that the year-on-year rate increase has slowed and is currently at 5.7 percent versus the previous report of 6.0 percent.

In another strong housing report for the week, existing home sales rose 0.4 percent for January.

  • December also had a strong increase and the momentum has kept going and is showing no signs of slowing.
  • Even stronger data in the report is that from the same time last year sales growth in this sector of the market is up 11.0 percent.
  • In an indication of housing strength, the single family sector of the market rose 1.0 percent.

When it comes to selling prices, the story is slightly different.

  • It appears that some discounting may be taking place in that the median home price fell 4.2 percent to $213,800.
  • Home prices continue to be higher than the same time last year by 8.2 percent.
  • Supply of homes available for sale, which has been very close to historic lows and holding back sales, seems to be rising.
  • Supply, which had been sitting at 3.4 months, rose up to 4.0 months.
  • This is still below the January numbers of 4.5 months however the market is moving in the right direction.

Reinforcing strong home price growth is the report from the Federal Housing Finance Agency.

  • The FHFA reported that home-price appreciation increased 0.4 percent.
  • Although this number is at the low end of the range predicted by analysts, it continues to show solid gains.
  • Home prices remain 5.7 percent higher than the same time last year.

The only housing report to show weakness for this week was the report on new home sales.

  • In an unexpected downturn, new home sales declined 9.2 percent in January to a lower-than-expected annualized rate of 494,000.
  • The housing report is still respectable given that December’s numbers were not revised and that report showed a solid gain of 544,000.

The major potential market moving reports are:

  • Monday February 29th – Pending Home Sales
  • Tuesday March 1st – ISM Manufacturing Index & Construction Spending
  • Wednesday March 2nd – MBA Applications
  • Thursday March 3rd – First Time Jobless Claims
  • Friday March 4th – National Employment Situation