New Home Sales take an 8% breather last month after building up steam through most of the year. The biggest piece of economic data this week is the job market, with new Unemployment Filings falling to an eight-year-low of 284,000. The BLS Jobs Report will be out next Friday.
In the absence of any economic reports out today, the news hovers over political unrest and violence in the areas of Russia, Ukraine, and Israel. Without waxing too philosophical or political or insensitive for that matter, it is interesting to observe that this sort of activity used to plummet the equities market as traders would transfer huge amounts of cash from stocks into the safety of bonds to avoid market uncertainties. As is, both markets are flat on the day and haven’t seen much action on the day. Apathy? Maturity? Calloused tolerance? Whatever it is, it’s unnerving to me as a human being aside from my push for lower interest rates in the future.
Inflation numbers for last month are in at an increase of 0.3%, and a year-over-year level of 2.1%–matching exactly the prior month and in line with expectations. Energy and transportation costs continue to rise 0.2% faster than the other measured sectors. The consequential costs associated with driving all over the valley to show homes hasn’t deterred home sales however; Existing Home Sales are up 2.6% in June alone to 5.04M units moved.
It’s nice to be back at my desk after spending last week in the memorable-but-dusty middle of nowhere. And honestly I can’t wait to get up to the mosquito-infested Uintas next week.
Hearing a client’s gasp this morning who hasn’t applied for a mortgage in awhile reminded me of how incredible these interest rates really are, so I thought I’d share with you this graph depicting the history of 30 year fixed rate loans for the last 40 years. Stocks are retreating after a few days of record-high closes, sending cash back into Bonds and stabilizing interest rates.
Goldman Sachs suggested this morning that interest rates will start rising in the 3rd quarter of 2015, six months sooner than their chief Divination Instructor last foretold. This is a result of the better Jobs picture revealed last week by the Ministry of Magic (AKA: the Bureau of Labor Statistics).
And Black Knight Financial Services (their real name) reported that foreclosure starts rose by 9.5% from April to May, but are down 26.11% from a year ago.
The Bureau of Labor reported today that the Unemployment Rate in the U.S. dropped to 6.1%, the lowest since September 2008 and below the 6.3% reading expected. Helping curtail the unemployment rate was the creation of 288,000 new jobs last month. Even more amazing than the massive increase in job growth is the fact that ADP (who is known for crying wolf with their balderdash predictions) actually got it right yesterday.
Whatever you choose to do this weekend to celebrate this great country we live in and the freedoms we enjoy, I wish you safe and enjoyable time surrounded by those you love and several high-calorie indulgence sessions.
Ahead of the official Jobs Report out tomorrow (one day early because Friday is the 4th), ADP shows that there were 281,000 new jobs created last month. This is well ahead of the 179,000 from last month, the 200,000 anticipated from ADP, and the 210,000 expected from the “actual” BLS report we’ll see in the morning. Stocks and Bonds have been whipsawing, but look to both be closing relatively unchanged since the opening bell.
A surge in manufacturing on the United Kingdom and China helped the DOW and S&P to both close at record-highs today. The move comes at the expense of bond sales, which drops prices and in turn threatens to pushes interest rates upward.
Anticipating that every red-blooded American will be firing up the grill this upcoming weekend, prices of beef, pork, and cheese are all up over 13%, though ketchup is down 12%. No reports on the price of catsup.