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Market Update June 27th

Market Update June 27th
June 24, 2016 devsite

Some thoughts to ponder…

  • We must not allow the clock and the calendar to blind us to the fact that each moment of life is a miracle and mystery
  • After a bad harvest, sow again
  • We have to learn to be our own best friend, because we fall too easily into the trap of being our worst enemy

 

And now onto the market update…

Through Thursday, the stock market seemed to have been enjoying a great rally.

  • With fears of the U.K. leaving the European Union easing, markets around the world stabilized and have even been rallying.
  • However, as of Friday morning, everything changed. Current indications are that the experts were wrong and that the U.K. is going to leave the European Union.
  • Most of the votes are in and they are pointing towards a “yes” vote for Brexit to happen.

As of early Friday morning, stock markets around the world are tanking.

  • Money is flying out of stocks and into bonds.
  • T he Yield on the 10-year bond is down to 1.46% as of early morning trading.
  • The U.S. stock market futures are down over 600 points prior to the opening of the Friday trading day.
  • Bottom line…buckle up and stay tuned as the markets are in for a crazy ride while investors and governments around the world sort through the what the impact of the vote to exit will ultimately be.

The housing market continues to show strength, although the numbers are not earth shattering.

  • Existing home sales rose 1.8 percent in May, which is the strongest pace of growth since February 2007.
  • The increase is only modest from prior months but it continues to point to an improving housing market.
  • Compared to the same time last year existing homes sales are up by a narrow 4.5 percent.

Home prices are up, but only modestly at 4.7 percent for the year.

  • Lack of inventory continues to be the culprit for slow growth in the housing sector. Supply of homes is very low at only 4.7 months.

The South is up 6.5 percent from the same time last year at a rate of 2.280 million.

  • The Northeast, which is the smallest region, is up 11.6 percent for a 770,000 annualized rate.
  • T he West, usually a strong region appears to be lagging behind the country being down 1.7 percent from a year ago.

New homes sales data is always volatile due to the small sampling used to acquire report data.

  • Despite the volatility, it appears that new home sales are continuing to trend higher.
  • Although new home sales fell a larger than expected 6.0 percent in May, the number is misleading.
  • The annualized sales rate of 551,000. is the second best of the housing recovery cycle.

The Federal Housing Finance Agency’s report on home prices was weaker than anticipated, but still shows home price appreciation.

  • Prices according to the FHFA increase a much smaller than expected 0.2 percent for the month of April.
  • Prices compared to the same time last year are up by 5.9 percent.

This week’s potential market moving reports are:

  • Monday June 27th – International Trade in Goods
  • Tuesday June 28th – GDP & Case-Shiller Home Price Index
  • Wednesday June 29th – MBA Mortgage Applications and Pending Home Sales
  • Thursday June 30th – First Time Jobless Claims and New Home Sales
  • Friday July 1st – ISM Manufacturing Index & Construction Spending