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Market Update For The Week Of June 25 2018 Vol 16 Issue 26
| Erika Slayton |
1202 E. Sonterra Blvd., Suite 503
San Antonio, TX 78258 Office: 210-907-7610
For the week of June 25, 2018 — Vol. 16, Issue 26
>> Market Update
QUOTATION OF THE WEEK..."When my mother had to get dinner for 8, she'd just make enough for 16 and only serve half." --Gracie Allen, American comedian
INFO THAT HITS US WHERE WE LIVE... Home builder activity took off in May: Housing Starts spiked 5.0%, to a 1.350 million unit annual rate, the highest in more than a decade. Building Permits dipped, but are 8.0% ahead of a year ago.
Builders are finishing units at the fastest pace since the recession, freeing them to start new construction. Rising lumber costs lowered the National Association of Home Builders sentiment index, but it's still a very high 68.
Existing Home Sales slipped 0.4% in May, to 5.43 million units annually. But First American's model estimates the potential for existing home sales is currently at a seasonally adjusted 6.11 million annual rate.
BUSINESS TIP OF THE WEEK... If you want to grow your business faster, make following up leads your top priority. And when leads are referrals, be sure to thank the sources and keep them abreast of where things stand.
>> Review of Last Week
TENSE OVER TRADE... Trade tensions kept buyers on the sidelines, so the three major stock indexes went south for the week. The concern is that a possible trade war could spike inflation and slow global economic growth.
But the first $50 billion in tariffs on Chinese imports have yet to go into effect, the additional $200 billion announced will go through a review process too, and analysts doubt the U.S. will enact all proposed tariffs.
Plus, economic fundamentals are strong. Low unemployment and high consumer confidence push household spending, which is more than two-thirds of our economy, while tax cuts, government spending and business investment provide support against trade challenges.
The week ended with the Dow down 2.0%, to 24581; the S&P 500 down 0.9%, to 2755; and the Nasdaq down 0.7%, to 7693.
It was a quiet week in bonds, Treasuries modestly lower, other bonds modestly up. The 30YR FNMA 4.0% bond ended UP .09, to $101.73. The national average 30-year fixed mortgage rate fell in Freddie Mac's latest Primary Mortgage Market Survey, dropping now three of the last four weeks. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.
DID YOU KNOW?... Realtor.com's chief economist reports, "in spite of ongoing record-low inventories in the housing market, we know that 557,000 new listings hit the market in May, the highest number since summer 2015."
>> This Week's Forecast
NEW AND PENDING HOME SALES GROW, ALONG WITH EVERYTHING ELSE... May New Home Sales should be up, like the Pending Home Sales index of contracts signed on existing homes. Other key parts of the economy predicted to rise include Q1 GDP, May Personal Spending and June Chicago PMI,measuring Midwest factory activity. Core PCE Prices are also forecast up, but gains in Personal Incomeshould cover that.
>> The Week's Economic Indicator Calendar
Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of Jun 25 - Jun 29
|10:00 ||New Home Sales||May ||666K||662K||Moderate |
|Consumer Confidence||Jun ||127.1||128.0||Moderate |
|08:30 ||Durable Goods Orders||May ||-1.0%%||-1.7%||Moderate |
|W ||08:30 ||Durable Goods Orders - ex transportation||May ||0,4%||0.9%||Moderate ||10:00 ||Pending Home Sales||May ||0.8%||-1.3%||Moderate ||10:30||Crude Inventories||06/23||NA||-5.9M||Moderate |
|08:30 ||Initial Unemployment Claims ||06/23 ||220K||218K||Moderate |
|Continuing Unemployment Claims ||06/16 ||NA||1.723M||Moderate |
|Th ||GDP - 3rd Estimate||Q1 ||2.2%||2.2%||HIGH |
|08:30 ||Personal Income||May ||0.4%||0.3%||Moderate |
|Personal Spending||May ||0.4%||0.6%||HIGH ||Core PCE Prices||May ||0.2%||0.2%||HIGH ||09:45||Chicago PMI||Jun||61.0||62.7||HIGH ||U. of Michigan Consumer Sentiment - Final||Jun||99.0||99.3||Moderate |
>> Federal Reserve Watch
Forecasting Federal Reserve policy changes in coming months... The Fed Funds futures market sees no rate hike in August, then one in September but none in November. Note: In the lower chart, a 0% probability of change is a 100% certainty the rate will stay the same.
Current Fed Funds Rate: 1.75%-2.00%
|After FOMC meeting on:||Consensus|
|Aug 1 ||1.75%-2.00% |
|Sep 26 ||2.00%-2.25% |
Probability of change from current policy:
|After FOMC meeting on:||Consensus|
|Aug 1 ||0%|
|Sep 26 ||71%|
|Nov 8 ||32%|
With my expertise in realty for both buying or selling a home in San Antonio, and surrounding areas. You have found the right resource for your real estate needs. Whether you are looking for a new hom....