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Happy Thanksgiving and The Market Update

Happy Thanksgiving and The Market Update
November 28, 2016 abryant

thanksgiving

 

Thoughts to Ponder . . .

  • Some days I wish I had the wisdom of a 90 year old, the body of a 20 year old, and the energy of a 3 year old.
  • Bought a talking parrot today and taught him to say “Help, I’ve been turned into a parrot.”
  • How do I like my eggs? In a cake.

 

And Now on to The Market Update . . .

The stock market is continuing its rise to new record highs.

  • For the first time ever, the DOW rose above the 19,000 mark.
  • Although the initial craziness related to the Trump presidential victory has subsided, confidence continues to remain high that the economy is likely to grow significantly with his economic initiatives.
  • The market continues to improve, however in a more controlled manner.

 

The latest surveys show that virtually 100% of investors and analysts believe that the Fed will raise interest rates at their December meeting.

  • The market is already factoring in this increase, which is why we have seen the 10 Year Bond yields steadily rising.
  • Since the election, the yield on the 10YR Treasury has risen approximately 50 basis points.
  • Although mortgage rates are not directly tied to the movement of this index, it is an indicator on the direction of mortgage rates, which are now about ½% higher since Donald Trump won the election.

 

It appears that with the recent rise in mortgage rates, many homebuyers who have been sitting on the fence have now jumped into the water.

  • After last week’s decline of purchase loan volume of 6.0 percent, the purchase index soared 19.0 percent for last week.
  • The media has been reporting that the increase in mortgage rates is reducing homeownership affordability.
  • Since the chances are that rates are going to continue to rise, it seems that many purchasers are acting now to avoid being priced out of the market.
  • Refinance activity continues to decline, as this type of financing is far more sensitive to any movement in mortgage rates.

 

Existing home sales in October jumped 2.0 percent to an annualized rate of 5.6 million.

  • This is the highest pace for sales since February 2007.
  • September’s numbers were also revised slightly higher to a rate of 5.490 million.
  • Sales compared to the same time last year are up by 5.9 percent.

 

The best part of the housing report is that the greatest strength was in single-family home sales, which increased by 2.3 percent.

  • The median price of homes is also up by 6.0 percent from a year ago at $232,200.
  • Home supply continues to remain a challenge as available properties for sale declined 0.5 percent leaving supply at 4.3 months.

 

Home prices according to the Federal Housing Finance Agency increased 0.6 percent for the month of September.

  • The rate of increase slowed slightly from the prior month however overall prices are up p6.1 percent from the same time last year.

 

This week’s potential market moving reports are:

  • Monday November 28th – Dallas Fed Manufacturing Survey
  • Tuesday November 29th – GDP and Case-Shiller Home Price Index
  • Wednesday November 30th – MBA Applications, ADP Report, and Pending Home Sales
  • Thursday December 1st – ISM Manufacturing Report, Consumer Confidence, and Jobless Claims
  • Friday December 2nd – National Employment Situation

 

Joke of the Day!

A lady was picking through the frozen turkeys at the grocery store, but couldn’t find one big enough for her family. She asked the stock boy, “Do these turkeys get any bigger?”

The stock boy answered, “No ma’am, they’re dead.”