Market Update for the Week of May 29, 2018

Market Update for the Week of May 29, 2018

Info That Hits Us Where We Live

The week’s housing reports began with New Home Sales, down 1.5% in April. But they’re still 11.6% ahead of a year ago, and inventory, around 300,000, is at a nine-year high.

In contrast, low inventory was blamed for April’s 2.5% slide in Existing Home Sales. But this is just a tick below a 5.5 million annual rate, and demand is strong: 57% of sold homes were on the market less than 30 days.

Tight supply in many markets keeps prices rising, so house flipping is gaining. CoreLogic reports flips hit 6.2% of sales in Q1, the highest read in five years. 

Business Tip of the Week

No one can be all things to all people. In almost every industry, the successful people are the ones who find a niche and become experts in it.

Review of Last Week

KEEPING THEIR COOL… There were enough geopolitical gyrations to send stocks in both directions, but investors kept their cool and edged the three major market indexes up for the week. Uncertainties over Chinese trade and a North Korean summit were joined by shaky politics in Italy and Spain. 

A highlight of the week was the release of FOMC Minutes from the Fed’s last meeting, which indicated members may go easy with rate hikes, happy to let inflation briefly drift above the 2% target before applying the brakes.

Very decent economic data included Durable Goods Orders up in April (excluding the volatile transportation sector), initial and continuing jobless claims historically low and U. of Michigan Consumer Sentiment historically high.

The week ended with the Dow UP 0.2%, to 24753; the S&P UP 0.3%, to 2721; and the Nasdaq UP 1.1%, to 7434.

Geopolitical uncertainties sent investors to the safety of bonds, pushing prices up. The 30YR FNMA 4.0% bond ended UP .64, to $101.91. Even so, the national average 30-year fixed mortgage rate grew to 2011 levels in Freddie Mac’s latest Primary Mortgage Market Survey. Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

Did You Know?

Capital Economics reports that mortgage purchase applications approached a nine-year high in April, even as mortgage rates rose.

This Week’s Forecast

PENDING HOME SALES, GDP, MANUFACTURING AND JOBS UP, INFLATION MILD They’re forecasting Pending Home Sales up in April, while the Q1 GDP – 2nd Estimate should show decent growth. Factory activity is also predicted to be growing, by the Chicago PMI and ISM Index. The May jobs report is expected to show good Nonfarm Payrolls and Hourly Earnings numbers, nice for the housing market, while low Core PCE Prices should keep the Fed in check.

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 May 28 – Jun 1

DateTime (ET)ReleaseForConsensusPriorImpact
Tu
May 29
10:00Consumer ConfidenceMay127.5128.7Moderate
W
May 30
08:30GDP – 2nd EstimateQ12.3%2.3%HIGH
W
May 30
14:00Fed’s Beige BookAprNANAModerate
Th
May 31
08:30Initial Unemployment Claims05/26227K234KModerate
Th
May 31
08:30Continuing Unemployment Claims05/19NA1.741MModerate
Th
May 31
08:30Personal IncomeApr0.3%0.3%Moderate
Th
May 31
08:30Personal SpendingApr0.3%0.4%HIGH
Th
May 31
08:30Core PCE PricesApr0.1%0.2%HIGH
Th
May 31
09:45Chicago PMIMay57.957.6HIGH
Th
May 31
10:00Pending Home SalesApr0.7%0.4%Moderate
Th
May 31
11:00Crude Inventories5/26NA+5.8MModerate
F
Jun 1
08:30Average WorkweekMay34.534.5HIGH
F
Jun 1
08:30Hourly EarningsMay0.3%0.1%HIGH
F
Jun 1
08:30Nonfarm PayrollsMay190K164KHIGH
F
Jun 1
08:30Unemployment RateMay3.9%3.9%HIGH
F
Jun 1
10:00ISM IndexMay58.057.3HIGH

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months… The Fed Fund futures market is still confident we’ll get a 0.25% hike in June. That rate should remain through the summer, but there’s a good possibility of another small gain in the fall. Note: In the lower chart, an 89% probability of change is only an 11% probability the rate will stay the same.

Current Fed Funds Rate: 1.50%-1.75%

After FOMC meeting on:Consensus
Jun 131.75%-2.00%
Aug   11.75%-2.00%
Sep 262.00%-2.25%

 

Probability of change from current policy:

After FOMC meeting on:Consensus
Jun 13         89%
Aug   1         13%
Sep 26         59%

Statistics source: www.markettrends.com

Material in this article from: Inside Lending Market Snapshot

This is an advertisement for Jim Passi. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in this message is the property of Citywide Home Loans and cannot be reproduced for any use without prior written consent. This message is intended for business professionals only and is not intended for distribution to consumers or other third parties. The material does not represent the opinion of Citywide Home Loans. Citywide CO NMLS #67180. Regulated by the Division of Real Estate.

The Jim Passi Team at Citywide Home Loans proudly serves Illinois, Wisconsin, Michigan, Indiana, Georgia and Flordia. If you are looking to buy a home or refinance, we have you covered. Apply Now to get started.
Please follow and like us:
error