Monday, 13 August 2012 12:08
QUOTE OF THE WEEK... "Actions are the seed of fate. Deeds grow into destiny." --Harry S. Truman, 33rd President of the United States
INFO THAT HITS US WHERE WE LIVE... Some of the actions we're seeing in the housing market should lead us to a better destiny. The National Association of Realtors (NAR) reported median sale prices for single-family homes posted year-over-year gains in Q2 in 110 of 147 markets. This is up from 74 markets showing annual price appreciation in Q1. The national median sale price of existing single-family homes in Q2 was up 7.3% over a year ago, the biggest annual increase in six years!
Total existing home sales in Q2 came in at a seasonally adjusted annual rate of 4.54 million. Many indicators point to a bottom forming -- new home inventories are at historic lows, home builder sentiment has turned around and home prices have gone up, seasonally adjusted, 4 months in a row. But some economists still aren't convinced we have momentum, the #1 driver of home prices. That's because the #2 driver, the unemployment rate, is still up at 8.3%. BUSINESS TIP OF THE WEEK... Always share the credit. When you do, co-workers and clients feel a sense of ownership in the idea or effort and a closer relationship with you.
CREEPING BULL MARKET... It certainly wasn't a raging bull market -- creeping is a more apt description of last week's bullish move -- yet stocks scored their fifth straight weekly gain. All three market indexes ended above psychologically important levels -- the Dow above 13,000, the S&P 500 north of 1400 and the Nasdaq over 3,000! The equity market is seen as a leading indicator for the economy, so it's good to see both currently going in the proper direction, albeit at a very slow and painful pace. Europe stayed quiet, but China disappointed with industrial output growth at a three-year low.
Over here, we had our now familiar you-win-some, you-lose-some economic readings. Initial Weekly Jobless Claims were down to 361,000, but Continuing Claims rose to 3.33 million. The June Trade Deficit came in lower than expected at $42.9 billion, but May was revised upward to $48.0 billion. Preliminary Q2 Nonfarm Productivity was at a 1.6% annual rate, not exactly booming, up only 1.1% over last year. Manufacturing Productivity was up at just a 0.2% annual rate, way lower than Q1. Oh, and the Federal Deficit? $69.6 billion for July!
For the week, the Dow ended UP 0.9%, to 13208; the S&P 500 was UP 1.1%, to 1406; and the Nasdaq was UP 1.8%, to 3021.
Treasuries, and bond prices in general, were under pressure last week, as the European debt melodrama delivered no big news, so investors headed back to riskier stocks. The FNMA 3.5% bond we watch didn't do too badly, ending the week down just .14, at $105.12. National average mortgage rates were up slightly again, but still well below rates of a year ago.
DID YOU KNOW?... First-time home buyers, who have historically accounted for 40% of home purchases, bought 34% of all homes in Q2, up from 33% in Q1.
RETAIL SALES, INFLATION, MANUFACTURING, HOME BUILDING... This week features a little bit of everything economic including the monthly look at homebuilding. Thursday's July Housing Starts and Building Permits should continue their upward slog. Retail Sales are expected back in growth territory for July, showing the consumer is still in the game.
Inflation, forecast at 0.2% for both wholesale (PPI) and consumer (CPI) prices, is a little hot but still within Fed guidelines. There are a slew of manufacturing reads -- for August, the NY Empire Index is forecast down and the Philadelphia Fed Index looks to be negative, but overall Industrial Production for July is expected to show modest growth.
We have closed 3 times in the past 2 years with Russell and Amy and every time we have been completely satisfied! We have recommended you to several friends and neighbors.
Gary Z., ...