Thoughts to Ponder and The Market Update February 6

 

Thoughts to Ponder . . .

• I’ve always wanted to turn around in an executive chair and say “I’ve been expecting you.”
• It doesn’t make a difference what temperature a room is, it’s always room temperature.
• Always be positive. *Trips down the stairs* Whew, I got down those stairs fast.
• How is it that we put man on the moon before we figured out it would be a good idea to put wheels on luggage?
• Does anyone else have plastic bags full of plastic bags or is it just me?

 

And Now on to The Market Update . . .

Despite the makings for a very volatile week in the stock market, the indices remained in a relatively narrow range of trading.

• Between all of the economic reports released this week, and the constant release of Executive Orders from President Trump (I am still getting used to writing “Trump” instead of “Obama”) investors continue to be taking a wait and see attitude on everything.

 

Finally, after being strong but stagnant in growth, pending home sales might finally be rising.

• For the month of December, the index rose a strong 1.6 percent.
• This was above Econoday’s highest estimate for an increase.
• This rise points to strong sales numbers for January and February.
• Pending sales were strongest in the West with a 5.0 percent increase.
• The Midwest trailed with an increase of 3.4 percent.

 

Case-Shiller’s home price index, which had shown little movement in recent months, jumped in November by 0.9 percent.

• This was the strongest gain since dating back to March 2015.
• Home prices continue to remain higher from the same time last year.
• Currently the spread is 5.3 percent.

 

The East appeared to lead the country in price appreciation for the most recent monthly report.

• New York, which has been flat, jumped a surprising 1.2 percent in November.
• Despite the increase, New York continues to be the weakest of the 20 cities in the index for overall year on year growth.
• Boston also enjoyed nice upward movement with price appreciation of 1.2 and 1.0 percent for the last two monthly reports.
• Prices are also 5.5 percent higher than the same time last year.
• Not surprising, the West, especially the Pacific Northwest, continues to be the leader in overall yearly price appreciation.
• Seattle is up 10.4 percent from the same time last year and Portland Oregon is higher by 10.1 percent.

 

To no surprise, the Fed did not increase rates at their FOMC meeting this week.

• The Fed kept monetary policy the same, however there seems to be slightly different language in their summary that upgrades the likelihood of inflation later this year.
• The Fed confirmed that they do have plans for rate hikes later this year, however exactly when they will occur has not been determined.
• Economic data will drive the Fed’s decision as to when and how much to raise rates.

 

The housing market continues to hum along with stable demand.

• Inventory remains low in many parts of the country.
• The Mortgage Bankers Association of American reported that purchase applications for the week of January 27^th fell a seasonally adjusted 6.0 percent.
• Refinances dropped 1.0 percent.
• However, unadjusted, the purchase index jumped 12 percent from the previous week, which is higher than the same time last year by 2 percentage points.
• (Seasonal adjustment is a statistical method for removing the seasonal component of a time series that exhibits a seasonal pattern)

 

Finally, U.S. employers added 22,700 jobs in January.

• This is the highest growth in employment in four months.
• Friday’s report was far above all analysts’ estimates which topped out at 175,000.

 

This week’s many potential market moving reports are:

• Tuesday February 7^th – JOLTS Report
• Wednesday February 8^th – MBA Applications
• Thursday February 9^th – First Time Jobless Claims
• Friday February 10^th – Consumer Sentiment